For years, traders and small business owners followed a routine—closing their shops at the end of the day and heading straight to the bank to deposit their earnings. It was a long-standing practice: wake up, sell goods, and ensure that any excess cash was safely kept in a bank. However, this tradition is changing rapidly.
Traders Turning into PoS Operators
Today, many traders are not just selling products; they are also becoming financial service providers. Instead of keeping their money in banks, they now operate Point-of-Sale (PoS) businesses, using their daily cash flow to facilitate transactions for customers.
This trend is evident in markets across Lagos, from Balogun to Alaba and even in smaller neighborhoods. Shop owners who once depended on banks for deposits are now offering financial services themselves. Customers prefer withdrawing or transferring money through roadside PoS terminals rather than queuing up at banks.
PoS as an Alternative to Traditional Banking
Many traders and shop owners no longer see the need to deposit their earnings in banks. Instead, they channel their cash into PoS services, making additional income from transaction charges. In various markets, it is now common to find traders running PoS businesses alongside their main ventures. A grocery seller might also provide cash withdrawal services, while a clothing merchant may double as a mobile money agent.
“I used to deposit my earnings in the bank, but the long queues and poor service discouraged me,” said Adeola Ayokunle, a trader at Ikotun Market in Lagos. “Now, I use my cash for PoS transactions, and I make extra money daily. In a way, I run my own bank.”
The rise of PoS businesses is driven not only by convenience but also by necessity. The 2023 cash scarcity exposed inefficiencies in Nigeria’s banking system, leaving millions unable to access their own money. Even today, many banks struggle to meet cash demands, and ATMs often run dry. Frustrated by these challenges, more Nigerians now turn to PoS operators for quick and reliable access to cash.
“The last time I entered a bank was in 2023, and it was to resolve an issue, not to withdraw or deposit money,” said Ruqayah Adebisi, a Lagos resident. “I trust PoS agents more than bank ATMs.”
PoS Businesses Creating Employment
Beyond traders, PoS businesses have provided employment opportunities for thousands of Nigerians, especially young people. Unlike many ventures that require significant startup capital, launching a PoS business is relatively easy. With a terminal, some cash, and a strategic location—such as a busy market or a transport hub—anyone can start earning. Many unemployed youths, unable to secure formal jobs, have turned to PoS operations to sustain themselves and their families.
“I was jobless for two years after my national service, and it was frustrating,” said Odunayo, a PoS operator in Igando, Lagos. “This business changed my life. With my savings and some help from family, I started my PoS business, and now I make about N5,000 daily.”
Impact on the Banking Sector and Economy
The growing popularity of PoS operators has significant implications for both society and the banking industry. On one hand, it has improved financial inclusion, especially in rural areas where access to banking services is limited. Many Nigerians now depend on PoS operators instead of traveling long distances to find a bank branch.
However, this shift also raises concerns. Cases of fraud, system failures, and security risks are increasing as PoS transactions become more common. Some operators take advantage of desperate customers by charging excessively high fees, while others have been linked to fraudulent activities.
For banks, the dominance of PoS transactions presents a challenge. With fewer people visiting branches or using ATMs, banks may need to rethink their strategies. The traditional model of physical banking is gradually being replaced by digital and mobile payment solutions. If banks fail to adapt, they risk losing relevance, especially as financial technology companies like Opay and Moniepoint continue to grow.
Financial Experts Weigh In
Economists believe that the expansion of PoS services is reshaping Nigeria’s financial landscape. Samson Simon, Chief Economist at ARKK Economics & Data Limited, sees this trend as a step toward greater financial inclusion.
“As more PoS and mobile money agents emerge, financial exclusion decreases. This enables monetary authorities to implement policies more effectively, leading to a stable economy, lower unemployment, and sustainable growth,” Simon explained.
However, he also views the rise of PoS businesses as a sign of deeper economic issues. “The fact that so many people are turning to PoS services suggests a lack of better job opportunities in the formal sector,” he noted.
The Future of Banking in Nigeria
As PoS operators continue to dominate Nigeria’s cash economy, questions remain about the long-term sustainability of this trend. Will banks innovate to offer better services, or will they keep losing ground to informal financial players? One thing is clear: the way Nigerians handle money has evolved, and a return to the old banking system seems unlikely.
