Why POS Machines are the Best Alternatives to ATMs in Nigeria

by Oghenechovwe Eghwrudjakpo
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POS machine

In 2012, the Central Bank of Nigeria (CBN) introduced Point of Sale (POS) terminals to promote its cashless policy in the country. Its acceptance by Nigerians encouraged digital financial platforms.

Since the inception of POS machines, we have achieved some level of financial technological advances. In 2020 during the pandemic, POS machines became more popular as people couldn’t go to banks because of the lockdown.

While Automated Teller Machine (ATM) is a self-service machine that performs cash transactions, POS machines can also perform such transactions. It comes with a fingerprint or an iris scanner, as it requires biometric identification

POS agents operate POS machines to process cash transactions through a POS service provider. A decade later, we have POS operators at every street bend, shopping malls, shops, and even local market stores.

pos business in nigeria

POS business in Nigeria has become gold

POS business in Nigeria is currently one of the fastest growing businesses on the rise, and one would be forced to wonder why POS is preferred over our regular banks.

This article evaluates why POS machines have become the best alternatives to our regular ATM system. We have outlined a few reasons why POS machines are preferred to ATMs. 

Why POS Machines are Preferred to ATMs

POS machines are also called micro ATMs because they are mini and portable versions of the regular ATMs. They can connect to banking networks and perform cash transactions

  1. It saves time

POS machines are life savers, especially when you have withdrawn cash in a hurry. Queues at ATMs can be very frustrating and tiring, and you may have to stand for a long time before withdrawing your money. You can easily avoid all these shenanigans with the POS machine stand opposite the bank.

The best part is that there are a lot of POS machines in a particular area, so there can never be queues.

Imagine that you quickly need to purchase something and then go to the bank to withdraw money. You’d agree that it would be much faster to go to the store, purchase, and then pay with your credit card.

During the Covid 19 pandemic, I didn’t have to stress myself with bank issues like waiting outside because only a specified number of persons were allowed. I made use of POS machines.

  1. Better customer service

If you have used both POS machines and bank ATMs, you’ll be able to understand this fully. Other than the regular ATM system, POS machines provide ease of use and offer better customer service than banks. 

POS machines help improve customers’ operations, especially by reducing their waiting time.

A typical Nigerian prefers a POS machine to the regular ATM system because of the stress involved. POS machines provide self-service capabilities and reduce our reliance on banks.

A lot of customers prefer to perform their cash transactions themselves, and POS machines are one of the easiest self-service options available. POS machines provide customers with quick and efficient services.

Most times, ATMs are stocked with little cash, barely sufficient to meet customers’ needs. You could stand in a long queue and still not withdraw from the ATM because cash is finished.

  1. Availability 

POS machines are more available than the regular ATM system. I started appreciating the availability of POS machines when I moved to a town with only two banks.

Some areas have very few banks or no banks at all. This would have been a major problem for customers of such banks for withdrawal and deposit of cash.

However, POS machines are readily available and have made cash transactions easier, especially in areas with no banks. POS terminals have become necessary to satisfy the growing need for cash, particularly in our commercial sphere.

I’ve lived in a town located at the Southern part of Nigeria for the past five years and have only been to the bank once. I use POS machines for all my cash transactions because they are always available and closer to me.

  1. It is a business venture

Unlike ATMs which belong to the banks alone, POS agents are regular individuals who open POS terminals as their source of livelihood. Banks have also delved into the POS business, and banks also have their POS agents who buy POS machines from the banks.

The number of POS agents we have in this country as of 2012, when it was first introduced, has tripled over the years. A lot of people go into this business because it is easy to run and also easy to start. Plus, you can open a POS shop anywhere because as long as people live there, they’ll need to make cash transactions.

Read Also: How to Start a POS Business in Nigeria

  1. Promotes cashless policy

In another sense, it also helps other businesses and further drives home the concept of a cashless policy.

Every shop I walk into has a POS machine for customers who want to pay with their cards, and we can’t have ATMs in people’s shops who use POS machines.

Businesses with POS machines are taken much more seriously, attracting more customers because only some people like to carry cash around.

  1. Track transactions

It also helps businesses keep track of their financial transactions easier than they would have with cash. Customers also have a better shopping experience and would likely return.

One of the first thing I ask when I walk into a shop is if they have a POS machine because I hardly carry cash. It would be stressful for me if they were to tell me, no, and I would have to either use an ATM or a POS machine outside before coming back to shop. 

Read Also: Top Banks in Nigeria for Entrepreneurs


The inception of the use of POS machines and systems and its acceptance by Nigerians has helped a lot. It has helped drive home the point of cashless policy that the CBN had in mind when introducing the use of POS. POS machines and terminals have proved useful and much more than ATMs.

It has also aided many businesses and has become a business itself, benefiting both banks and individuals. It’s no wonder that in the long run, POS machines are preferred and used in regular ATM systems. It is envisioned that it will become a business sector of its own in another decade.

Hey! What do think about the growth of financial technology in Nigeria? Let’s talk on Whatsapp. You can also subscribe to our newsletter to keep track of more engaging posts. 

About Author

Avatar of Oghenechovwe Eghwrudjakpo
Oghenechovwe Eghwrudjakpo
Chovwe is content writer and a Fashion Designer. She's also a Chartered Mediator and Conciliator. She's an advocate for peace and loves art. She owns a fashion brand and is very passionate about what she does.

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