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Reading: Nigeria’s POS agents bridge the gap to financial inclusion but at a high cost
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African News Herald > Blog > Technology > Nigeria’s POS agents bridge the gap to financial inclusion but at a high cost
Technology

Nigeria’s POS agents bridge the gap to financial inclusion but at a high cost

ANH Team
Last updated: April 24, 2025 2:14 pm
ANH Team
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Last year, our CEO, Múyìwá Mátùlúkò, shared his experience on Twitter about opening an account and getting a debit card in just ten minutes. Surprisingly, this was not in a traditional banking hall but by the roadside with the help of one of the over 1.8 million point of sale (POS) agents scattered across Nigeria.

A recent report by Intelpoint and Finance in Africa revealed that a staggering 95.4% of Nigerians rely on these POS agents to access financial services. These agents have become a crucial lifeline for many, especially in rural areas where physical banks are scarce.

However, this convenience and accessibility come at a cost. Customers using POS agents typically pay a fee of ₦100 to ₦150 for every ₦5,000 withdrawn, which can increase significantly for larger withdrawals. In rural areas with limited agent availability, these charges are even higher.

In the face of economic challenges, including a suspended cybersecurity levy and the ₦50 Electronic Money Transfer Levy on transactions over ₦10,000, the cost of using POS terminals has escalated. This has sparked debates on social media platforms about the fairness of these charges.

According to the report, 58.6% of Nigerians view high fees as the primary challenge with agency banking, with an equal percentage calling for lower charges. Despite the aim of bringing financial services closer to underserved populations, POS agents are inadvertently burdening those who rely on them the most.

While cash withdrawals remain the most common transaction at POS agents, cash deposits and fund transfers are also popular services. Surprisingly, nearly 6% of respondents have used these agents to open accounts with financial institutions.

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Even in regions where traditional banks are accessible, 95.9% of respondents still utilize POS agents, highlighting the demand for their services. This could be attributed to the lack of cash availability in automated teller machines (ATMs) across the country, even in areas with close proximity to banks.

Although POS agents are the most accessible touchpoint for financial services in Nigeria, only 9.1% of respondents prefer them over mobile banking apps, debit cards, and physical bank branches. The high charges associated with POS transactions risk alienating low-income users who rely on frequent cash withdrawals.

It is evident that Nigerians are eager to access financial services, but the current fee structure may be excluding the very individuals these services aim to include. Financial institutions and regulators must collaborate to design a more inclusive fee system that does not burden the most vulnerable populations. By evolving beyond physical proximity to financial inclusion, POS agents can truly serve as a catalyst for economic empowerment in Nigeria.

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