New Telegraph

December 10, 2023

POS revolution: Banking to the unbanked

•I paid N20, 000 to collect POS machine – Agent

•‘Money agents bring banking to your doorstep’

•It comes with violence, threats – FirstMoney agent

•Reduces the queue at ATM galleries

•We’re still prefer analogue banking–73 year-old


Money agents who utilise Point of Sale (POS) machines in Nigeria are coming to the rescue of many businesses and bank customers, who resent the hassles of queuing at Automated Teller Machine (ATM) galleries or visiting the banking hall just to make transactions. CHIJIOKE IREMEKA looks at the risks, benefits and impact of the growing business on the hitherto unbanked communities


Not long ago, one needed to go into the four walls of Nigerian banking halls to either make a cash deposit or withdrawal. And sometimes, the visits to the banks were for inconsequential cash withdrawals or deposits among others.


Then, bank customers had to go through the hassle of filling in cash deposit slips or withdrawal booklets after which they joined the ever long queue to await their turns, praying that bank’s networks didn’t glitch.


But this tradition of visiting the banking hall and spending productive hours in the bank was abridged by the Cash-lite policy of the Central Bank of Nigeria (CBN) and resultant introduction of Automated Teller Machine (ATM), which has, no doubt, helped in trimming down the rate of customers’ visits to the banks.


This also lent a hand to the commercial banks and has empowered them to turn back certain customers who wish to make cash withdrawals below N20, 000 by insisting that such transactions be made at the ATM channels or have the customer’s account debited for withdrawing any amount in short of N20, 000 across the counter.


Hence, turning back customers and debiting the accounts of others, who insisted on such withdrawals, were all targeted at reducing the number of people coming into the banking hall on a daily basis and reducing the workload on the over-the-counter cashiers, who may have been stretched beyond zero elasticity.


Sequel to these progressive policies, yet another introduction was made and this took away more stress from the bankers and customers as well. Banks’ customers no longer need to travel for kilometers in search of their bank branch or ATM galleries, where they can queue for a long period of time in order to access the machine if nothing goes wrong.


Unfortunately, sometimes, after such a long and hopeful waiting for one’s turn, the next information that will show up on the ATM’s screen after inserting one’s card for transactions would read: ‘Temporarily of unable to dispense cash. Check the next available machine.’ This makes all those moments on the queue an exercise in futility.


Other challenges that ATM bypasses are giving customers hope of certain transactions after the banking hours but limited to cash withdrawals and transfer. It doesn’t bring the ‘banking hall’ to customers’ places of convenience, which the latest introduction of the POS transactional system is chief at. Sunday Telegraph gathered that with the POS revolution in the country, a simple phone call brings the banking hall into the customers’ comfort zone for almost all echannel transactions, including payment of power utility bills and digital television subscription, among others.


Thus, the CBN’s policy of bringing banking to the unbanned and doorstep of every household otherwise known as financial inclusion, seemed to have come to fruition with a number of POS operators springing up and smiling to the banks daily for servicing the rural un-banked and urban dwellers, who find it difficult going to the banks.


Nigerian banks have keyed into the policy as FirstBank has introduced FirstMoney POS machine for its customers, Zenith has Z-Money, UBA has UBA-Moni, Access Bank operates Access Agent/CLOSA Agent, while others like MoneyPoint, Momoagent and OPay POS machines exist alongside the big names.


To become a money agent, the applicant needs to have a N50,000 capital, a registered  company, a duly completed registration form with documents like a corporate account, proof of address (utility bill), valid means of identification, two passport photographs and a Tax Identification Number (TIN).


However, while this has brought about some forms of decent employment and fortunes to the population of jobless Nigerians, it also has its own challenges of which caution and discreetness will be the saving grace, else the experience will be damning.


Today, at a short notice, the money agents, otherwise referred to as POS operators, could go against all odds to provide services to customers in their comfort zones as long as they are ready to pay a token for such luxury.


The token or fee charged is guided by a regime sent to the operator by the bank, but also depends on the amount involved, location and other services rendered. Sometimes, it ranges from N100 to N500 per every N5000, depending on a number of factors. In some universities, students are at the mercy of the operators as they sometimes have to contend with high charges.


A retired Civil Servant, Mr. Alabi Ifeoluwa, who used to visit his Lagos Island branch of First Bank at Marina, for a number of cash transactions, confessed that with the POS revolution in the country, he experiences an unlimited access to online transactions and has no need going to the banks for transac-tions he can do at home.


According to him, he prefers to pay any amount of money as a service fee for the POS transactions as long as it’s done in the comfort of his home or any other place he may invite the operator without moving out of his base and taking the risk of being robbed.


“This is not the time to go to the bank. The COVID-19 protocols have made it even more difficult for those who may want to go there. You have to sit under the canopy in hot weather until the security operatives think it is time for you to go in for your transactions.


The country is in crisis and insecurity is everywhere. “Going to the bank or ATM nowadays has many associated challenges and time wastage. I prefer to pay commission and have my transactions at home rather than going to the banks to waste some precious hours, I would have spent sleeping,” he said.


For Mr. Chinedu Obiokoye, POS has come to the rescue of many Nigerians with tight schedules that would not allow them the opportunity of going to the banks for cash transactions at will. He would rather go to a POS centre than queuing up in a bank or ATM gallery to for cash transactions.


Obiokoye, who lives around Charity in Oshodi, Oshodi-Isolo Local Government Area of Lagos State, said with POS, he doesn’t need to go out to queue, let alone go to the bank, saying that since POS came to his neigbourhood, he doesn’t know the latest colour of his bank.


He noted that he would only go to the bank when there is a serious transaction to make or he has a complaint to lodge, saying that he can do more transactions with POS than ATM, especially during the non- banking hours. “POS has no comparison when it comes to cash deposit during the weekend and nobanking hours.


Of course, ATMs cannot accept deposit, though it may accept abroad but we are yet to have such technology in Nigeria. With POS operators, you will do this ease,” said Mr. Obiokoye. A new generation banker, Blessing Okodua, who works with one of the leading commercial banks in Ikeja, Lagos, said the difference between POS and ATM withdrawal is where the transaction takes place, saying that POS withdrawal is naturally cash back at a point of sale at a retailer while an ATM withdrawal takes place at an ATM.


She noted that the POS system has made it possible for retailers to run a successful business out of the brick and mortar shop and make it run simultaneously.


She stressed that POS won’t miss a detail of a purchase made from the web or physically as everything goes in the database without any hassle. Sunday Telegraph learnt that the location in a retail store where a consumer pays for goods or services is POS and many retail stores use it to record purchases, process credit or debit cards, and update inventory.


It was learnt that many POS terminals handle credit card or debit card payments and thus also include a magstripe reader. Some have fingerprint readers that read your fingerprint, which is linked to a payment method such as a checking account or credit card. Once the transaction is approved, the terminal prints a receipt for the customer. A selfservice POS terminal allows consumers to perform all checkout-related activities. That is, they scan the items, bag the items, and pay for the items themselves. Sunday Telegraph’s investigation revealed that some fuel station staff use the POS meant for sale of fuel to do personal business without the knowledge of the company. “What I do sometimes, when I want to buy fuel at the fuel station is to pay above the fuel I purchase and ask the pump attendant to give me cash.


Some of them who are good will do so without charging you but others with business sense will ask you for a token,” said Jideofor Nelson, who lives at Ikeja GRA, Lagos. Speaking on the acquisition of a point of sale machine, a POS operator, in Surulere, Lagos, Ibrahim Arafat, said the POS is meant to be free but in some cases, it’s not so as  some bank officials collect money to facilitate the early collection of POS machines for transactions.


She noted that the ideal thing was for banks to monitor one’s transaction with a view to seeing how he or she sells cards, bills, and digital television subscriptions among others to be sure that the machine will not be idle in the applicant’s home. “But there is an unofficial payment we make to facilitate the release of the POS machine. I paid N20, 000 to obtain my own.


There are other agents that sell theirs as well. The likes of O’Pay business sell their POS as well. I don’t know if CBN charges them for it or not. Yes. Some operators said they have one problem or the order but I have not had any,” she added. According to the CBN’s guidelines on POS card acceptance services and issues related to dispense errors, resolution of disputed/ failed POS or Web transactions shall be concluded within 72 hours from the current five (5) days. The apex bank also directed that all banks are bound to resolve the backlog of all ATM, POS and Web customer refunds within two weeks starting from June last year. “Failed ‘On-Us’ ATM transactions (when customers use their cards on their bank’s ATMs) shall be instantly reversed from the current timeline of three (3) days and where instant reversal fails due to any technical issue or system glitch, the timeline for manual reversal shall not exceed 24 hours,” the Apex bank said.


“Refunds for failed ‘Not-on-Us’ ATM transactions (where customers use their cards on other banks’ ATMs) shall not exceed 48 hours from the current 3 to 5 days,” it added. However, despite how lucrative this business is, it still comes with a number of challenges capable of discouraging new entrants with wavering spirit into the business.


In some cases, it comes in the form of violence and threats from customers due to dispense error. At Shagamu, in Ogun State, Mrs. Nkem Okafor, a FirstMoney Agent, who has been operating FirstBank POS business for over three years, said the business promotes inclusion of the larger population of people in the banking business besides providing employment opportunities.


“I registered my company with the Corporate Affairs Commission (CAC) and with FirsBank and the bank has branded my shop.


Through the company, I carry out such sundry bank services like account opening, funds withdrawal and deposit. We were provided with the bank’s deposit and withdrawal slips and we are attached to the nearest branch of the bank. On the average, I gross a daily turnover of 120 transactions running into N3million,” she said. She added that the business was very lucrative during the COVID-19 induced lockdown last year, when customers had little access to banks.


Then, she had over 200 customers daily because traders and small-scale companies were compelled to do their cash lodgment and withdrawals at her centre. Besides, Okafor, who operates another branch and possesses four POS machines also carries out services such as DSTV subscriptions, serves as electricity distribution companies’ agents for bills collection, and has also attracted the presence of some micro- finance banks like LAPO.


The business is, however, not without challenges. “The risk is very high and they come in the forms of violence and threats on the part of customers who often insist on instant disbursement of cash even when there is dispense error instead of visiting their bank branches to lodge complaints. “Network downtime is a problem. Many customers resent going to banks because it takes five and 10 working days respectively for resolving intra-bank and inter-bank dispense errors. They often intimidate our staff, something they cannot do at ATM points, but we resort to persuasion.”


According to her, some customers even refuse to fill deposit or withdrawal slips, and this makes it difficult to trace some of the transactions, except when we log into our system or utilize the receipt printed out for such transactions.


“Another challenge is security because we have issues with fake bank alerts. On some occasions, fraudsters, who ‘transfer’ money through the USD code and were paid off, only for us to realize that it was a fake alert  have visited some of our colleagues. A colleague of ours lost N200,000 in one operation.

“Also, sometimes robbers attack some of our colleagues but one interesting thing is that the POS machines are insured. You know that First Bank POS has First Bank Insurance, which handles their risks, just as Zenith Insurance under-writes risks associated with Zenith Bank POS, and the premium is paid yearly. “We also have a kind of association and communication platforms where we share experiences and invite bank staff to address our challenges and train us on how to handle risks associated with our business,” she added.


While many Nigerian bankers vote in favour of the POS system, there are others who prefer going to the bank to fill out necessary documents for cash withdrawal and deposit due to their fear of internet fraud which has the potential of emptying an unsuspected customer’s account in one fell swoop. This is the group of people Mrs. Risikaat Makanjuola represents. She said in spite of comfort that comes with the use of POS, she wouldn’t want to patronise the POS operator for the fear of fraud spree going on in the country today.


She insisted that she would rather go to the bank and wait for her turn than to have the little amount of money her children usually send for her stolen by internet fraudsters.


“Hearing how people’s money usually disappears due to online banking, I feel it would not be safe for me to enter there. I might not be as smart as the younger generations in this regard. So, it’s better for me to go to the bank and sign my signature and get my money,” she said.


She continued: “Recently, someone was educating people on how fraudulent POS operators can defraud unsuspected customers. In that video, he advised the customer, who used the POS for transactions to always be vigilant and never leave their cards carelessly with the operators.


“He said that the fraudulent clever ones can use their phone to snap the 15 number on someone’s card and with it can easily manipulate a few things to empty one’s account. They have sent me a number of messages and even bothered me with calls.


After seeing and hearing all these, I don’t think I would want to be a digital banker. Let me remain as an analogue and have my money intact.” On the other hand, the POS operators are now endangered species, as they are currently targets for armed robberies and kidnapping.


On January 21 and 31, Miss Ezinne Grace Iroh, a female POS operator was robbed and killed at Ukaegbu Street, in Ogbor Hill area of Aba, Abia State, while Dr Victor Chimaobi, also a POS operator at Market Road by Kent Street Aba, was also robbed and killed by the gang. In less than 48 hours after, the Police Public Relations Officer, (PPRO), SP Geoffrey Ogbonna, confirmed the killing of another POS operator,


Mr. Victor Igbokwe, in Aba by suspected armed robbers. In Ibadan, Oyo State, a POS operator was kidnapped on April 6, 2021, under Iwo Road Bridge. He was abducted about 4:30pm after leaving a bank where he went to withdraw money for his POS business. Her abductors demanded N5 million as ransom Police detectives have also said that some of these money agents have connived with the kidnappers and Internet fraudsters to collect their money and ransom because the latter are scared of collecting their money in the bank.


For instance, a POS operator, Gadimoh Ofei Bright, 29, was arrested by the police in Igara, Edo State. Bright reportedly confessed that he usually helped kidnappers collect ransom from their victim’s families. A top banker who did not want to be named said the money agent otherwise referred to in local parlance as POS business is an integral part of his bank’s retail banking which has helped and is still helping in growing deposits and profitability.

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