For decades, traders and small business owners closed their shops at the end of the day and headed straight to the bank to deposit their daily earnings. The routine was simple: wake up, go to the market, sell goods, and ensure that excess cash was safely locked away in the bank. That culture is rapidly fading.

Today, traders are not just business owners; many have become mobile money operators, using their cash flow to run Point-of-Sale (PoS) businesses instead of keeping it in banks.

The shift is visible across Lagos markets, from Balogun to Alaba, and even in smaller neighbourhoods. Shop owners who once relied on banks now act as financial intermediaries, servicing customers who would rather withdraw or transfer money at a roadside PoS point than endure long queues in banking halls.

PoS as the new bank

Traders and shop owners no longer see the need to deposit their daily earnings in banks. Instead, they leverage their cash reserves to run PoS services. In many markets, it is now common to see shop owners operating a PoS business alongside their main trade. A market woman who sells provisions also offers cash withdrawals and transfers, while a clothing retailer doubles as a mobile money agent.

?I used to deposit my cash in the bank, but I got tired of the long queues and poor service,? said Adeola Ayokunle, a trader in Ikotun Market in Lagos. ?Now, I use my cash for PoS transactions, and I make extra money daily. I?m now running my own bank here,? she said.

The rise of PoS operators is not just about convenience; it is also about survival. The cash crunch of 2023 exposed the inefficiencies of Nigeria?s banking system, with many Nigerians struggling to access their money.

Even today, banks remain short of cash, and ATMs are unreliable. Many Nigerians, frustrated by these challenges, have turned to PoS operators who guarantee quick and easy access to cash. This shift is changing the face of banking in Nigeria, as more people rely on these small, informal financial operators rather than traditional banks.

?The last time I stepped into a bank was in 2023 and it was to resolve an issue not to withdraw or deposit cash,? said Ruqayah Adebisi, a Lagos resident. ?I?m more confident of getting cash from PoS operators than the ATM or banking hall.?

Beyond traders, the PoS business has also created employment opportunities for thousands of young Nigerians. Unlike other businesses that require huge capital, starting a PoS operation is relatively easy. With a terminal, some cash, and a good location, such as a busy market or a bus stop, anyone can start. Many unemployed youths, unable to find formal jobs, have embraced this business, using it to sustain themselves and their families.

?I was unemployed for about two years after my service, and it was frustrating,? said Odunayo, a PoS agent in Igando, Lagos. ?This business saved me from depression. With my little savings and support from families and friends, I started this PoS business. I now make an average of N5,000 daily.?

This rapid growth of PoS operators has implications for society and the banking sector. On one hand, it provides financial inclusion, especially for people in rural areas or places with few banks. Many Nigerians now rely on PoS operators to access money instead of traveling long distances to bank branches.

However, this informal banking system also raises concerns. Cases of fraud, network failures, and security risks are rising as more people engage in PoS transactions. Some operators exploit customers by charging exorbitant fees at desperate times, while others have been linked to scams.

For the banking sector, the dominance of PoS transactions presents a challenge. With fewer people visiting bank branches or using ATMs, banks may need to rethink their operations. The traditional model of physical banking is gradually being replaced by digital and mobile money services. If banks fail to adapt, they risk losing relevance in an economy where people are increasingly looking for faster and more accessible financial services, particularly with the proliferation of Fintech like Opay, Moniepoint, and others.

PoS business deepening financial inclusion, entrepreneurship ? Economist

The growing influence of PoS operators is also shaping Nigeria?s monetary policy and economy. Samson Simon, chief economist at ARKK Economics & Data Limited, believes that the more widespread PoS and other financial agents become, the deeper financial inclusion will be.

?When there is less financial exclusion, this strengthens the hands of monetary authorities to get desired results. And when the authorities become more effective in their policies, that will make the economy better with stable and predictable prices, low unemployment, inclusive and sustainable growth, stable external balance, and equitable income distribution,? Simon said.

On the role of PoS businesses in boosting entrepreneurship, he noted that the sector has lowered the bar for becoming an entrepreneur. ?Since the barrier to entry is non-existent, anyone can start a PoS business,? he said.

However, Simon sees the rapid rise of PoS operators as a reflection of a deeper economic problem. ?There is no question about that. Those operating PoS businesses would most likely not have done so if there were better options in the formal sector,? the chief economist explained.

While PoS operators have become the backbone of Nigeria?s cash economy, the long-term sustainability of this trend remains uncertain. Will banks step up to improve their services, or will they continue to lose ground to these informal financial players? As traders and young entrepreneurs continue to embrace PoS businesses, one thing is clear: the way Nigerians handle money has changed, and there may be no going back. (BusinessDay)

Update news