How profitable is POS business in Nigeria? Is it even worth starting a POS terminal business in Nigeria in the first place?
By the way, by POS business I mean those people that collect your card, insert into the POS machine, you punch in some amount and your PIN, the amount is deducted from your account, they give you the cash equivalent, and of course, take their own service charge.
Why POS business is not a good business idea
Remember phone boots where you used to go and make calls and pay per minute? Where are those phone boots these days? Who even needs them now? This is the same fate awaiting POS business!
Let me tell you more in greater details why I think POS business is not profitable or a good business idea worth venturing into.
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1. There is no future for POS business
My biggest dislike about the POS business is that it looks like a business that will die a natural death very soon. Maybe in a few years time.
How many people who have ATM within their reach actually use POS? I for one can’t do that. Why pay someone a certain percentage or amount per withdrawal when you can just walk up to the nearest ATM machine and get your cash?
ATM machines are better alternatives.
Remember phone boots where you used to go and make calls and pay per minute? They died off because people found better, more convenient alternatives, coupled with lower call charged.
I see POS businesses going the same direction as phone boots! And this is a big disadvantage for POS business that you should be aware of.
2. Security is a big concern for POS business!
Have you not heard of people’s card details being stolen at POS points? I have read such stories.
Now you would say that you’re a good person and have no intention of stealing your customers’ card details. You are right, but it is unfortunate that your would have been customers don’t know that.
For the majority of people who are security conscious about their money and bank account, withdraws or transactions via POS terminal is definitely not an option!
This is very much expected given the rate of fraud and related crime in the country.
3. POS business might be suitable for remote or rural areas, but…
In as much as POS business might be suitable for remote places or more underdeveloped rural areas, the question you need to ask is how much do they withdraw per day in such places? Also, do you want to relocate to a rural area just to start a POS business?
4. Cashless is the new trend
These days, especially in the cities, people can purchase most things they want and pay without any cash. All you need is your bank app, mobile wallet or any other means you can transfer money. Or just hand them your bank/ATM card as most stores have their own POS!
This also points to the fact that POS is going the way of phone boot businesses.
5. It seems too easy to be worth it
If it was easy, everyone would do it…
Most times when a business is too easy for anyone to start, that business is usually not very profitable or at least requires more entrepreneurship prowess to make it very profitable.
Remember the famous saying that “If it was easy, everyone would do it”? You get the point. Because starting a POS business is easy, every Tom, Di*k and Harry can jump into it.
Have that in mind too…
“Should I start a POS business?”
Recommended for you: take a look at some of the lucrative small business ideas in Nigeria.
If someone else (os this article) should have it all figured out for you then you’re probably not prepared enough to venture into business.
The idea of this article is to point out what I think are the disadvantages of starting a POS business.
But I believe that after all said, you are the right person to make the right decision for yourself, to find valid reasons or counter reasons why starting a POS business is worth it.
But if you can’t find tangible reasons why it is worth it, maybe you should stay off the business for now.
Better still, here are some of the best handworks to learn and start your own business.
Thanks for stopping by…
Disclaimer: Please note that this article is my personal about POS business and not some kinda professional or expert advice on the business.