While it’s okay to hold different positions about Point-of-Sale (PoS) operators and their business model built on “using money to buy cash” in Nigeria, you cannot understate the importance they’re playing in the country’s cash economy.
Thanks to a policy frenzy, a failed naira redesign by former Central Bank of Nigeria (CBN) chief Godwin Emefiele, and a resulting cash crunch, the PoS sector never looked back.
PoS operators have become go-to sources for cash for many Nigerians who cannot commit time to visit bank automated teller machines (ATMs) stationed in urban areas.
Between the lines: In Q1 2025, Nigerians transacted ₦10.51 trillion ($7 billion) on PoS terminals, more than four times the amount year-on-year (YoY).
What’s driving the cash pile? Fintechs built dense agent networks across cities and rural areas, aggressively onboarding MSMEs and informal businesses that still rely on cash. Many Nigerians now prefer holding physical cash, keeping money out of the formal banking system.
What does increasing PoS transactions mean for Nigeria’s ambition for a cashless economy? It is crucial to state that not every PoS transaction is cash-tied (some users perform e-transfers at PoS terminals); however, the default use case for PoS machines is to withdraw cash. The heavy transaction processing could mean that, despite efforts, Nigeria might still be far from its cashless economy goals.
Zoom out: While PoS operators now handle big money, it is creating an unintended consequence for them. Some agents face arrests when transactions are later linked to fraud or crime. The CBN, trying to rein in runaway liquidity, imposed daily transaction caps—₦1.2 million ($785) for agents, ₦100,000 ($65) for customers—and mandated cash availability in ATMs. But PoS activity still accounts for a huge chunk of currency in circulation, now mostly outside banks.
Unless fintechs, regulators, and banks collaborate, PoS operators risk becoming scapegoats for deeper structural issues in Nigeria’s cash economy.
Read more in this analysis by our senior policy reporter, Temitayo Jaiyeola.
