As ATM withdrawals are increasingly becoming difficult to make, they are instead being replaced by Point of Sales (POS) transactions. According to reports from the Nigerian Inter-Bank Settlement Systems (NIBSS), the value of transactions done at POS terminals across Nigeria has risen by N1.05 trillion in 2022. The report which was contained in Business Day 22 shows that POS transactions done across the country rose from N3.56 trillion in the first 7 months of 2021 to N4.61 trillion in 2022.
According to the data, the transactions increased by 29 percent. However, a month-on-month analysis revealed that the value of POS transactions dropped in April and June after a N143 billion increase in March 2022. Similarly, the volume of POS transactions from January to June rose from 679 million. That is a 25 percent increase compared to 543 million in the corresponding period in 2021. In the first 7 months, POS banking agents increased to 8.04 million, while registration increased to 11.8 million which was deployed from January to June, compared to the 4.4 million banking agents and 6.8 million registered in the same period of 2021.
There is an increasing acceptance of POS transactions.
The sharp increase in year-on-year volume and value of transactions indicates increased acceptance and use of POS for payment for goods and services. The month-on-month decline reflects the seasonal effect on the level of spending across the country. The data paints a clear picture of the increased interest in POS as a means of transactions, especially with Nigeria’s continuous adoption of a cashless policy and the downsides of having to move around with cash and queue at the banking hall for withdrawals and deposits.
When interviewed, some POS investors indicated that the business is one of the lucrative ventures that makes an average of N10,000 to N300,000 or more daily. A POS vendor, Mustapha Iliyasu, confirmed that the business produces a large amount of daily profit. He says he makes more than N300,000 daily and pays N45,000 in monthly salaries to 5 employees. He also added that these all depend on capital, location, and number of transactions made within the day, week and month.
POS compliments ATM by bridging the gap between the two.
Experts say that the growth of POS transactions is bridging the gap created by the shortage in Automated Teller Machines (ATMs) deployed by banks, as many Nigerians now prefer to patronize POS agents. It is also an enabler for creating job opportunities for Nigeria’s teeming youths, who are facing an unemployment rate of over 42 percent. According to the Central Bank of Nigeria (CBN) 2019 National Financial Inclusion Strategy document, the number of banking agents rose by 51 percent to 236,940 in December 2019 from 38,416 agents in December 2018.
Similarly, a total of 568,488 additional POS terminals have been deployed over the last 9 months as the number of deployed machines stood at 915,519 as of December 2021. The opportunity to make an additional income is a major motivation for becoming an agent, a 2020 Enhancing Financing Innovation and Access (EFINA) agent survey revealed. According to the survey, agents surveyed are signed up by different principals or service providers. But First Bank (First Monie), OPay, Quickteller, and MTN top the list of principals with a majority share of agents.
System has some advantages and disadvantages too.
POS systems are able to carry out tons of processes with lots of them being automatic. Some other advantages of POS systems include better customer service, easier team management, increased sales and more. On the flip side, there can be some disadvantages, such as security risks, costly pricing and malware infections. POS has been used in Nigeria for fraud and swindling people. There have been reported cases of cloning of customer’s card details as well as kidnappers forcing their victims to withdraw via POS.
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