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Over the years, the Point of Sale (POS) business has gained significant traction in Nigeria, especially following the 2023 Naira redesign and currency swap initiative. During that period, banks faced severe cash shortages, and the Central Bank of Nigeria (CBN) imposed deadlines for phasing out old Naira notes. It was during this period that POS operators emerged as ‘saviors’ by facilitating access to cash and enabling transactions when traditional banks were overwhelmed. These POS operators are commonly referred to as “POS agents” and they help in making payment services seamless especially in unbanked areas.

Currently, cashless transactions are becoming the norm as Nigerians prefer digital payments for convenience and safety. POS machines on the other hand have become a constant in shops, markets, and even pharmacies helping with paying for groceries, withdrawing cash and transferring funds. The amazing thing about POS operators is that they are always within reach especially in areas where banks are scarce.

In this article, we would look at the legal requirements for establishing a POS business in Nigeria.

What is a POS Business in Nigeria?

A POS business involves the use of portable electronic machines to facilitate financial transactions such as cash withdrawals, fund transfers, bill payments, and purchases. These machines connect to banking networks and allow customers to access financial services without visiting a bank. There are two main categories of POS usage, namely:

1. Merchants- These are businesses that use POS machines to accept payments from customers.
2. POS Agents- These are individuals or businesses that offer financial services (withdrawals, transfers, etc.) using POS machines.

Requirements to Become a POS Agent

1. Register your business with the Corporate Affairs Commission (CAC).
2. Obtain a POS machine from a CBN-licensed Payment Terminal Service Provider (PTSP) or a traditional bank such as First Bank, Guaranty Trust Bank etc.
3. Obtain a Tax Identification Number (TIN) from the Federal Inland Revenue Service (FIRS).
4. File and remit applicable taxes such as Value Added Tax (VAT) and Income Tax
5. A bank account
6. Valid means of identification
7. Utility bill
8. Passport photograph
9. Fill the required forms

How Much Does It Cost to Operate as a POS Agent?

The startup cost varies depending on your location, provider, and business scale. Most PTSPs offer POS machines for lease or at subsidized rates. There are also transaction fees which depends on the provider.

Typical POS Agent Charges in Nigeria

All POS agents charge this regardless of the type or brand of machine;

• Withdrawal:
  • ₦100–₦5,000 → ₦100
  • ₦5,001–₦10,000 → ₦200
  • ₦10,001–₦15,000 → ₦300
• Transfer: same as withdrawal fee

1. Airtel SmartCash POS

• Withdrawal:
  • ₦100–₦5,000 → ₦100
  • ₦5,001–₦10,000 → ₦200
  • ₦10,001–₦15,000 → ₦300
• Transfer: same as withdrawal fee

2. Flutterwave POS

• Deposits: 0.6% of amount
• Withdrawals: ₦6 per ₦1,000 (~0.6%)

3. PalmPay POS

• Deposit (by agent): Flat ₦10
• Withdrawal: 0.5% of amount

4. MoMo POS (MTN Mobile Money)

• Withdrawals:
  • ₦1,000–₦5,000 → ₦50
  • ₦6,000–₦20,000 → ₦100
  • ₦20,000–₦500,000 → ₦300
• Deposits follow same tiers

5. OPay POS

• Withdrawal:
  • Below ₦20,000 → 0.5%
  • Above ₦20,000 → Flat ₦100
• Transfers: ₦50 for transfers of ₦10,000+

Agents may set customer-facing fee above these base rates.

6. Bankly POS

• Withdrawals: 0.3%
• Transfers: ₦35 (flat)
• Deposits: ₦20 per transaction

7. Moniepoint POS

• Withdrawals:
  • ₦1–₦20,000 → 0.5%
  • Above ₦20,000 → Flat ₦100
• Transfers: ₦20 per transaction

8. Baxi POS

• Withdrawals:
  • Below ₦20,000 → 0.55%
  • ₦20,000–₦100,000 → ₦100
  • Above ₦100,000 → ₦150
• Transfers/Deposits: ₦30 flat; bill payments often free

9. FirstMonie (First Bank POS)

• Withdrawal Tiers:
  • ₦1–₦5,000 → ₦50
  • ₦5,001–₦30,000 → ₦100
  • ₦30,001–₦100,000 → ₦150
  • Above ₦100,000 → ₦200
• Bills: ₦100 flat
• Airtime top-up: Free

10. Supply Smart (Fintech Provider)

• Withdrawals: 0.5%, capped at ₦100
• Interbank Transfers: ₦25 per transaction
• POS-to-POS Transfers: ₦15 per transaction
• Bonus: Free data for agents

Quick Comparison Table

POS Provider	POS Withdrawal Fee	POS Transfer/Deposit Fee
Airtel SmartCash	₦5 (≤20k); ₦100 (>20k)	₦15
Flutterwave	₦6 per ₦1,000 (~0.6%)	—
PalmPay	0.5%	₦10 flat (deposit)
MoMo POS	₦50–₦300 (based on tier)	Same structure as withdrawals
OPay	0.5% (≤20k); ₦100 (>20k)	₦50 (≥₦10k transfer)
Bankly	0.3%	₦35 / ₦20 (transfer / deposit)
Moniepoint	0.5% (≤20k); ₦100 (>20k)	₦20
Baxi	0.55% / ₦100 / ₦150	₦30
FirstMonie	₦50–₦200 (tiered)	₦100; airtime free
Supply Smart	0.5% (max ₦100)	₦25–₦15 (interbank / POS transfers)

Summary of POS Fees and Charges in Nigeria

• Typical withdrawal fees: Range from 0.3% to 0.6% or flat rates from ₦50 to ₦300 depending on the provider and amount.
• Deposits and transfers are usually charger at flat rates between ₦10 to ₦100, often cheaper or free for airtime or utility payments.
• Providers like Supply Smart cap maximum withdrawal fees—great for larger transactions.
• Under regulatory pressures like CBN’s daily limits, some agents may increase fees to maintain profitability.

How Long does it take to Obtain a POS Machine?

Typically, it takes 24-48 hours to obtain a POS machine if all the requirements are met.

Top POS Platforms in Nigeria

There are several POS platforms in the market but the most preferred due to their reliability, network stability, and user-friendly interfaces are Opay, Kuda, Palmpay and Monniepoint.

How to Obtain a POS Machine as a Merchant

If you’re a business owner looking to accept card payments, the process is slightly different from that of a POS agent and the requirements are:

1. Open a business account with the bank or PTSP the POS machine is to be obtained from
2. Be registered with the Corporate Affairs Commission
3. Physical inspection of your business premises.
4. Fill out and submit the necessary forms provided by the bank or PTSP.
5. Upon approval a POS machine will be installed at your business location and you can start accepting payments from customers with it.

Regulatory Bodies that Oversee POS operations

The regulatory bodies that oversee POS operations in Nigeria include:

1. Corporate Affairs Commission (CAC)- This body is in charge of registering businesses.
2. Central Bank of Nigeria (CBN)- This is the major regulatory body that sets operational guidelines, licensing requirements, and transaction limits.
3. Nigeria Inter-Bank Settlement System (NIBSS)- This helps to facilitate interbank transactions and ensures smooth operation.
4. National Financial Inclusion Strategy (NFIS)- This body helps to Promotes access to financial services through POS agents and other channels for customers or users.

Can Foreigners Become POS Providers

Yes, they can, as far as they observe all regulatory guidelines required.

Is there a Required Share Capital and form of registration Registering a POS Business with CAC?

No there is none. However, where it is a business with foreign participation it must be registered as a limited liability Company with a minimum share capital of 100 million.

Conclusion

If you’re a customer looking to save, compare POS providers based on transaction size and fee models. If you’re a potential agent choosing a platform, consider both fees and agent support structures, as they directly affect your earnings.

Operating as a POS agent in Nigeria requires that you observe the regulatory compliance set by the CBN and other relevant authorities to ensure smooth operation and the business is not used as a means of fraud. If you’re considering becoming a POS operator or need help with registration, compliance, or business setup, contact Firmus Advisory today.

Also explore our guide on Regulatory Compliance for Manufacturing Businesses in Nigeria for broader compliance frameworks, and don’t miss our article on Registering a Business in Nigeria to learn how to officially register your POS venture.