POS agents record lower patronage as banks make cash available

April 7, 2023 Mary

Barely two weeks after the Central Bank of Nigeria (CBN) directed banks to make more cash available for Nigerians and businesses, POS agents are complaining of lower patronage by their customers.

Some of the POS agents who spoke to BusinessDay across Lagos said that their customer patronage is low and no longer at the pre-scarcity level due to availability of cash at banks.

“I used to do between 300,000 to 700,000 daily for both cash and transfers before the scarcity but now I do less than 300k daily, there’s now cash so people do not really use POS,” a POS agent in the heart of Idumagbo market said.

She explained that there are a lot of banks here and since the cash is now available they’ve gone back to their previous charges.

“I charge N100 for N5000 and N200 for N10,000.”

On October 26, 2022, the CBN announced that N200, N500 and N1,000 notes would be redesigned and introduced into the economy from December 15, 2022, while commercial banks were directed to return existing denominations to the CBN.

The withdrawal of the old naira notes from circulation ahead of the February 10 deadline alongside the over-the-counter cash withdrawal limits to N100,000 and N500,000 per week for individual and corporate organisations, respectively and the limited supply of the new notes led to a severe cash scarcity.

The cash scarcity led to long queues and left Nigerians reliant on POS agents for cash at exorbitant charges.

“I used to do transactions between N100,000 to N150,000 daily before the scarcity but now I do N100,000 for two days, the N100,000 I withdrew yesterday afternoon is what I’m still giving out,” Naomi Willie a POS operator at Badore Ajah said.

Naomi said that the reason why business has been slow is that there are so many POS agents now, “also a lot of shops have the POS machine now so people can easily use their cards or transfer to shops so they’d rather do that than pay for charges to collect their money.”

Another POS agent at Idumagbo explained she used to process 300,000 daily but now does less because of the cash availability and the charges.
“People prefer to go the bank now especially the older women in the market since they won’t be charged, when the price stabilizes to what it used to be the market will go back to what it used to be,” she said.

Uche Best, a popular POS agent under the bridge at Obalende told BusinessDay that he believes that the business has slowed not because of cash availability but because people lost their jobs and businesses during the cash scarcity and so the people don’t have enough money to withdraw.

“ A lot of businesses here crumbled, even I experienced loss, and it’s only when you have money you can withdraw,” he said.

BusinessDay had earlier reported that the cash scarcity led to long queues at banks, failed online transactions and limited business activities across the country, causing losses for individuals and businesses.

He further explained that a lot of people rushed into the POS business thinking it was lucrative during the cash scarcity, so there’s been an increase in the level of new entries.

He said, “a lot of people that rushed into the POS business will close because they won’t be able to make as much as they used to during the scarcity.”

He explained that before the scarcity he was able to save more compared to now.

“My personal daily savings before the scarcity was N15,000 now I save N6,000 to N7000 daily. Before the scarcity I could do up to N1 million transactions in a day between 6:30 am and 8 am when the bank opens I‘ve exhausted N300,000 and then go back to withdraw 700,000 which I exhausted by 8 pm in the evening,” he explained.

He pointed out that although more cash is in circulation now some banks still have a maximum of N20,000 at a withdrawal and that non-corporate accounts can only withdraw N500,000 in a week.

“With a corporate account I’m able to withdraw over N500,000, but it’s not the case for other POS agents, I believe things can go back to normal if the CBN totally removes the ban because some banks only do N20,000 for individual accounts,” he said.

Another POS agent reiterated that they are not getting as much cash from the banks because of restrictions.

“Although the withdrawal limit has been removed, you still can’t withdraw more than N500,000 weekly except if you own a corporate account,” Bolanle, a POS agent at Obalende said.

She said that generally things are not used to cash availability and also because there are lots of competitors.

“I used to do up to N300,000 daily before the scarcity but now I do little over N50,000 before the scarcity I used to have at least 100 customers in a day, and now I barely get 50 customers. I even have to accept lower charges compare so they don’t go to other places because we are plenty here,” she said

She explained that they also do not make as much gain as they used to because the price of paper has doubled and data is more expensive

“Pos paper is now N1700 from N800 and data is more expensive compared to before and we also settled the task force, so all of this is additional cost,’” she said.

Another POS agent at Ajah bus stop named Christiana said that the business is not like it used to be, that it’s been infiltrated by a lot of new entries during the cash scarcity.

“We were 21 doing POS business in this bus stop, also there aren’t enough banks here so we have to go all the way to VI to get money,” she said.

She also explained that one of the reasons the business is slowing is because before the cash crunch people deposited money and paid for that service but now people rarely deposit money and even when they do they want to be paid for it.

“Now when people bring cash to put in their account they’ll be asking for commission saying they are doing us a favour meanwhile we will be charged for the deposit, it’s also one of the reasons why it’s not as profitable as before,” she said.