Disadvantages Of POS Business In Nigeria

7 Disadvantages Of POS Business In Nigeria

Since 2013 when the Point of Sale(POS) machine was introduced in Nigeria, the POS business has continued to thrive and it has been revolutionizing the way financial transactions are done in Nigeria. The introduction of cashless policy has also helped the business to gain more ground in the Nigeria financial sector. 

Each business has its disadvantages and  POS business is not an exemption. As the POS business continues to expand in Nigeria there’s urgent need to identify its challenges to enable beginners who want to start the business to be proactive in tackling the challenges that are associated with the POS business. To this end, we shall be enumerating the disadvantages of POS business in NIgeria in the subsequent section.

Disadvantages Of POS  Business

Disadvantages Of POS Business In Nigeria

There are many disadvantages accruing from doing POS business in Nigeria, they include:

1. Poor Internet Connection

One of the major challenges facing POS business in Nigeria is network issues. This problem is more prevalent in the rural area where there is no network mask to provide internet connection. This network issue is really frustrating the POS business because in some cases you may wish to make withdrawals from the POS machine using your debit card but the transaction won’t be successful because of poor internet connection. 

2. Fraud Issue

POS business has continued to witness fraud cases. A friend of mine who is a POS agent lost N100,000 to a fraudster. The scammer posed as a genuine customer and met my friend in his POS stand and transferred the sum of N100k to him but my friend didn’t know that it was a fake alert and he gave him the N100k before he realized that it was a fake alert, the customer had left. This is just a few of the fraud issues that POS businesses encounter on a daily basis in Nigeria.

3. Robbery Attack

In the recent past, many POS operators have witnessed robbery attacks. On several occasions, we have heard news where hoodlums attack POS operators and steal their money. Some of these hoodlums attack POS agents with guns, matchets and collect the POS machine from them. And the unfortunate thing is that anyone can be the victim of robbery attackers irrespective of the POS stand.

4. Delay In Reversal Of Funds

Sequel to the network issue we discussed earlier, there may be case(s) where a POS agent may want to transfer funds to a different financial institution but the transaction may not be successful due to network issue or other challenges. Instead of the fund to be reversed within a short time, it will be delayed for days and sometimes even to weeks leaving the POS operator stranded. 

5. Virus And Malware

Some POS machines if used for a long time may develop faults due to malware installation into the terminal. If the POS operator is not well experienced, the agent may continue to use it without knowing which may lead to faulty transactions and in some instances it may be at the detriment of the POS agent.

6. POS Machine Is Cost

Another problem that is facing POS business in Nigeria is that the POS terminal is relatively expensive to buy. Some advanced POS machines cost up to 100k and if you don’t want to buy the POS terminal and wish to rent, you will be required to pay a caution fee which may range from 10k to 50k. Hence, some beginners who wish to start the business may find it very difficult to get the POS machine because of its expensive nature.

7. Power Failure

Incessant power failure is also another challenge that is facing the POS business in Nigeria. Some POS operators don’t have access to regular power supply which hinders the success of the business since electricity is needed to charge the POS machine. Most of the POS agents in the rural areas find it very difficult to charge their POS terminal because there is no electricity to power it. When this happens, the business will be crippled which will definitely lead to untold hardship on the POS owner.


While POS businesses have brought numerous benefits to the Nigerian economy, they also face notable disadvantages. Power failure, robbery attack, network issues, cost of POS machines are some of the key hurdles. Hence, POS owners and intending POS agents must be aware of these challenges and strategize accordingly to overcome them. However,  collaborative efforts between financial institutions, government, and investments in technology infrastructure can go along to mitigate these disadvantages and foster the growth of POS businesses in Nigeria. 

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