FINANCE
The POS business in Nigeria - How Profitable is it?
Written By: Yekin, Staff Writer,
The Point of Sale system is one of the most common payment methods used by businesses around the world. It allows customers to pay for goods and services through their smartphones, tablets or other devices that can connect to the internet.
The POS system simplifies the payment process for both customers and retailers. In addition to this, it helps them manage their inventory more effectively, reducing costs and improving customer service.
How Profitable is POS business in Nigeria?
In Nigeria, the POS industry is quite profitable. This is largely due to rural populations' and isolated settlements' lack of access to banks. You can earn as much as 5,000-11,000 Naira per day if you have a decent location and have earned confidence with the community.
POS business in Nigeria is a very profitable business to be in. It is a fast-growing sector and has attracted a lot of interest from people who want to start their own business.
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POS business in Nigeria is a great investment opportunity, particularly for those who are just starting out and looking to start a small business.
The reason why it's such a good idea is because POS systems have been around for quite some time now, and they have proven to be extremely useful for businesses that want to make sure they're getting paid on time and accurately. This means that if you choose to do this type of business, you won't have any trouble finding clients or customers.
POS business in Nigeria has become a great investment opportunity, particularly for those who are just starting out and looking to start a small business.
The reason why it's such a good idea is because POS systems have been around for quite some time now, and they have proven to be extremely useful for businesses that want to make sure they're getting paid on time and accurately. This means that if you choose to do this type of business, you won't have any trouble finding clients or customers.
The POS business makes it mark into the Nigeria business after the Central Bank of Nigeria (CBN) implemented the agent banking system in 2013, the POS business began to develop in Nigeria in 2013.
This created a new channel for financial services to reach bank consumers in underbanked and unbanked societies. This means that POS enterprises enable financial institutions to reach out to hitherto underserved segments of the population.
However, agent banking services solve more than just one issue. Despite global efforts to move toward a cashless economy, Nigeria and other poor countries remain mostly cash-based.
Long lines and inconsistent network services at Automated Teller Machines (ATMs) drive many customers to look for other alternatives to receive money or conduct transactions. Aside from that, it allows customers to withdraw money quickly when the nearest ATM is a long distance away.
In other words, POS companies make it simple for customers to receive the cash they require in exchange for a fee.
Many people are skeptical about how profitable such a firm may be. However, this firm has a vast and diverse clientele, which includes everybody who has a bank account and wants to conduct any transactions. It is, without a doubt, a lucrative industry.
POS agents are not direct employees of banks and thus have authority over their companies, despite the fact that they are a retail channel offered by banks.
In other to appropriately address this issue of skepticism and vividly point out how profitable pos business, below is a catalogue of profits that are benefited by POS owners in Nigeria.
Catalogue of Profits
Low initial investment:
Unlike most other enterprises, the POS industry does not require a huge initial investment. To get started, you'll need a minimum balance of N50,000. The fact that you don't need a nice shop to host the business lowers the startup costs even more. In Nigeria, many of these companies are as simple as a table and chair set up in a prominent area or a wooden shack.
Number of customers is limitless:
Because the target market is a huge segment of the Nigerian population, profiting from this business is extremely simple. The POS agent can make an unlimited number of transactions each day and profit handsomely.
Low operational costs:
It has low operating costs compared to other businesses like restaurants or retail stores so it will save up some money for other projects. The startup cost will only take up less than half of your capital which means that the rest can be used for other purposes like paying off debt or investing in other businesses like real estate investment schemes (REIS).
Opportunity for growth:
The POS business can grow as you expand your customer base and increase the number of products you offer.
High profit margins:
The high profit margins make this a lucrative opportunity for those who are looking for an easy way to make money.
It allows merchants to accept credit card payments without having to pay any extra fees or charges from banks or credit companies like Visa/MasterCard etcetera which makes them very attractive especially since most Nigerians don't have bank accounts; so instead of using debit cards (which are very expensive), many people prefer using cash which makes it difficult for businesses
Services that can be carried out in POS
- withdrawal of fund
- Cash deposit or transfer of money to personal or third party account
- Opening bank account at your comfort
- Payment of utility bills like: electricity or prepaid meter bill, airtime, water etcetera
Advantages of POS business
Friendly Customer Service
Giving your consumers a positive experience increases customer happiness, which encourages them to return. Choosing a good POS system allows you to proceed through a sales transaction more quickly and efficiently.
Customers can also be offered appropriate products via POS systems, resulting in increased sales and a more personalized experience.
Team Management Made Simple
Employee-related data, such as sales per employee and hours worked, can be tracked in some POS systems. This offers you a better picture of your company's personnel and allows you to prepare more effectively.
Using such a POS system allows you to see what and who is most effective, allowing you to better prepare for the future and provide training and assistance as needed.
Time saved
Using a POS system saves time since they are loaded with features that reduce the amount of time you have to spend on administrative or mundane activities. Inventory, orders, customer support, purchasing, reports, and more may all be managed with POS systems.
A POS system, for example, can provide real-time inventory reports so you can remain on top of things.
Multi-location systems
It can be difficult to service each store in the same way if you have more than one. You can easily manage several stores with a POS system. This implies that any business will be able to deliver the same level of service, efficiency, and convenience.
Each site will have its own inventory, but you may simply manage inventory and stock levels across several locations using a POS system. Data from all locations can be used to determine trends, track sales, and plan orders.
