The value of transactions over Point of Sales (PoS) terminals in Nigeria surged to N18 trillion in 2024, hitting an all-time yearly record.
This is according to data obtained from the Nigeria Inter-Bank Settlement System (NIBSS).
Fuelled by a protracted scarcity of cash at ATMs and the aggressive push in PoS deployments by fintech companies, the 2024 record represents a 69% increase when compared with the value of PoS transactions in 2023 at N10.7 trillion.
In the same vein, the volume of transactions rose by 8% year-on-year to 1.5 billion in 2024 compared with the 1.4 billion recorded in the previous year.
PoS terminal deployment jumped by 129%
While commercial banks had been the major drivers of PoS terminal availability in the past, the entrance of fintechs into this space has seen the number of PoS devices in the market grow astronomically.
In 2024, NIBSS data shows that the number of PoS terminals deployed across the country more than doubled to 5.5 million from 2.4 million recorded at the end of 2023. This represents a 129% increase.
Meanwhile, registered PoS terminals in the country also jumped from 3.5 million in December 2023 to 7.8 million in December 2024, indicating that about 4.3 million new PoS machines were registered last year.
The gap between deployed terminals and the number of registered terminals indicates that there are still over 2 million devices that are already registered but yet to be deployed.
What is driving PoS growth?
Industry analysts believe there are several factors contributing to the increasing adoption of POS as a means of transaction by Nigerians.
Chief among these is the difficulty in accessing cash through the usual banking channels.
Long queues and wait times, along with intermittent unavailability of cash in the ATM machines have frustrated patrons, leading to POS payments becoming increasingly attractive.
“The rapid growth of POS is not just an avenue for payment but also withdrawals have filled a gap for many Nigerians who struggle to access cash through banking channels such as ATM or teller withdrawals.
“It has also helped in bringing the banking services closer to the rural areas, which do not have as many banks accessible to them,” said A Lagos-based financial analyst, Mr. Adewale Adeoye.
Fintechs filling the gap for cashless ATMs with PoS agents
While the initial motivation for PoS business was the lack of bank ATMs in some areas, this has shifted to the lack of cash in ATMs and the need to make cash available to Nigerians.
It is now a common place to see PoS agents directly opposite a bank ATM or beside it as an alternative for bank customers whenever the ATMs refuse to dispense cash.
For a fintech like PalmPay, the deployment of PoS through agents was part of the company’s strategic plans to drive financial inclusion in Nigeria.
“This mission has fueled our efforts in deploying more PoS terminals across the 774 local government areas in the country,” the Head of Marketing and Communications at PalmPay, Femi Hanson, told Nairametrics.
According to him, the fintech has onboarded over 700,000 agents and it keeps making investments in deploying more PoS terminals into all regions in the country.
Another fintech, Moniepoint, also recently disclosed that it has deployed over 800,000 PoS across the country and is now planning to introduce a new innovation with an all-in-one PoS machine that combines payment processing, inventory management, and transaction reconciliation.
The latest data released by OPay also shows that the company has over 500,000 PoS agents spread across the country.
Impacts of PoS business
Highlighting the impacts of PoS business on the country, Hanson noted that aside from driving financial inclusion, the growing transactions on the platform are also boosting revenue for the Government through the Electonic Money Transfer Levy (EMTL) being charged on transactions from N10,000 and above.
“We have numerous stories of individuals and families that have benefited from the PoS business through the income made from charges on transactions.
“In addition, PoS operators are providing convenience for Nigerians. We saw this during the 2023 cash crunch and even till the present time. More people rely on PoS agents to get cash or even carry out basic transactions,” he said.
Credit: NairaMetrics
