Nigeria’s POS transactions hit ₦9 trillion in 2023, driven by cash dependency and a gap in formal banking access. For aspiring entrepreneurs, a POS business isn’t just a hustle—it’s a lifeline for millions. This guide breaks down exactly how to start, manage, and scale a profitable POS business while dodging scams. Let’s dive in.

Understanding the Basics of a POS Business

A POS business acts as a bridge between Nigeria’s cash-reliant population and digital finance. Your terminal enables cash withdrawals, bill payments, airtime sales, and transfers. Here’s the nitty-gritty:

• How It Works: Your POS machine connects to a payment gateway (e.g., Moniepoint) via mobile data. You maintain a float (cash reserve) to dispense physical cash, earning 0.5%–1% commission per transaction.
• Key Terms:
  • Float Management: Balancing cash inflows/outflows to avoid shortages.
  • Chargebacks: Reversed transactions due to fraud or errors.
  • Biometric Verification: Fingerprint scans to confirm customer identity (critical for fraud prevention).

Setting Up Your POS Business

1. Legal Compliance:
   • Register with the Corporate Affairs Commission (CAC) by September 5, 2024, per new mandates.
   • Partner with licensed providers (e.g., Moniepoint, OPay) requiring CAC registration.
2. Choosing a Provider:
   • Compare fees: Moniepoint (₦10–₦25/withdrawal) vs. OPay (₦20–₦50).
   • Negotiate commissions for high transaction volumes.
3. Location Strategy:
   • High-traffic zones: Markets, bus stops, or near banks.
   • Avoid oversaturated areas—scout for gaps in service.
4. Startup Costs:
   • POS terminal: ₦15,000–₦50,000.
   • Float: ₦100,000–₦300,000.
   • Kiosk rental: ₦10,000–₦15,000/month.

Daily Operations of a POS Business

1. Morning Routine:
   • Check float levels and test terminal connectivity.
2. Transaction Handling:
   • Confirm customer balances before dispensing cash.
   • Count cash twice for deposits to avoid fake notes.
3. Customer Disputes:
   • Use transaction logs to resolve issues. Say, “Let’s check together—your safety matters.”
4. Security:
   • Use discreet cash storage (locked boxes, not safes).
   • Install CCTV and power backups for outages.

Maximizing Profit in Your POS Business

1. Upsell Strategically:
   • Earn extra 1–2% from airtime, bills, and remittances.
2. Discount Psychology:
   • “₦50 off for withdrawals above ₦10k.”
3. Cost-Saving Hacks:
   • Deposit excess float into high-yield savings accounts overnight.
4. Scaling:
   • Open multiple outlets with profit-sharing models (e.g., 70/30 splits).

Common Scams and How to Avoid Them

1. Fake Alert Scam:
   • Never release cash without confirming alerts on your terminal.
2. Chargeback Fraud:
   • Use biometric terminals to prove customer presence.
3. Quick Switch Trick:
   • Mark your terminal with stickers to avoid dummy swaps.
4. Fake Currency:
   • Invest in a UV detector (₦5,000–₦10,000).

Red Flags: Impatient customers, mismatched account names, refusal of receipts.

Case Study/Success Story

Chidinma, 28, Lagos:

• Started with ₦80k in 2022; now runs 3 kiosks earning ₦450k/month.
• Her Secrets:
  • Location near a busy market (opens at 6 AM).
  • Biometric terminals and free receipt staplers for trust.
  • Reinvested profits to hire staff and scale.

Your POS business thrives on vigilance and consistency. Start small, master daily routines, and scale strategically. Remember: Fraudsters target the unprepared. Use biometrics, UV detectors, and customer trust to build an empire.