Point-of-Sale (PoS) transactions dominate the scene, recording an impressive ₦4.9 billion processed hourly.

Point-of-Sale (PoS) transactions dominate the scene, recording an impressive ₦4.9 billion processed hourly.

Nigeria's financial landscape is undergoing a significant transformation, with Point of Sale (PoS) terminals playing a pivotal role in this transition. These devices have emerged as a key driver in the country's push towards a cashless economy, enhancing financial inclusion while presenting notable challenges.

Financial Inclusion

Government initiatives and the expansion of fintech have encouraged the adoption of mobile and PoS payment solutions among small businesses and informal traders. By 2025, about 58% of such businesses in Nigeria are expected to adopt mobile PoS systems [3]. This digital shift helps bring millions of previously unbanked or underbanked adults into formal financial channels [1], contributing to broader inclusion.

Shift to Cashless Economy

The Central Bank of Nigeria (CBN) has been at the forefront of this modernisation, imposing limits on daily cash withdrawals and promoting policies that encourage digital payments, including prepaid cards used at PoS terminals [1]. This ecosystem fosters a more secure, efficient, and accessible payments environment outside traditional cash.

Technological Innovations

PoS terminals now integrate with prepaid card systems, digital wallets, and offline wallet technologies, supporting transactions even with limited or no internet access [1][2]. This adaptability accommodates a wider range of users in diverse connectivity conditions.

Unintended Consequences

The move to digital payments, however, introduces new risks and challenges.

• Security Vulnerabilities: Digital payment systems, including PoS, require robust security frameworks. Incidents like large-scale fraud and cyberattacks on payment infrastructures highlight the risk of exploitation via compromised credentials or weak compliance at smaller payment institutions [4].
• Unequal Digital Literacy: Among informal traders, many use smartphones and digital platforms for business but lack understanding of underlying AI algorithms and digital tools. This digital literacy gap can limit the full potential of PoS and digital payments for some users [5].
• Cash Usage Persistence: Despite digital growth, cash remains dominant in rural and semi-urban Nigeria, indicating that PoS terminals have not yet fully displaced traditional cash usage [1].

As the CBN continues to address these challenges, it is also concerned about excess cash outside the banking system impacting CBN policies such as the cash reserve ratio and lending rate.

Growth and Expansion

Fintech companies like Moniepoint, Opay, and PalmPay have seen significant growth, with over one million active terminals, processing over ₦10 trillion monthly, and serving over 1 million businesses, respectively [1][3]. Banks are also recognising the growth of PoS terminals and are taking steps to attract small businesses, such as Guaranty Trust Bank removing processing fees on its PoS terminals and United Bank of Africa launching an upgraded PoS terminal [1].

In the first quarter of 2025, a record transaction of ₦10.51 trillion was conducted through PoS terminals, a 301.67% increase from Q1 2024 [1]. As of March 2025, there were 8.36 million registered PoS terminals in Nigeria, with 5.90 million active or deployed [1].

Despite these impressive figures, the number of active ATMs in Nigeria fell to 16,714 in the first half of 2024, from 17,377 in the second half of 2023 [1]. With a population of around 216 million, there is roughly one PoS terminal for every 26 Nigerians [1].

In conclusion, PoS terminals have become instrumental in Nigeria's financial inclusion efforts by enabling digital payments for a wide population segment. However, associated security challenges and digital knowledge gaps introduce risks and barriers that policymakers and stakeholders continue to address as part of the transition to a cashless economy. Collaboration between associations, banks, fintechs, and regulators will be crucial in ensuring a clean and secure PoS space.

1. The integration of PoS terminals with prepaid card systems, digital wallets, and offline wallet technologies showcases the innovativebereau of technology in Nigeria's finances.
2. Financial businesses have expanded their reach by leveraging fintech and technology, with companies like Moniepoint, Opay, and PalmPay seeing remarkable growth in the number of active terminals and businesses served.
3. While Nigeria's financial landscape is increasingly reliant on digital payments facilitated by PoS terminals, persistent cash usage in rural and semi-urban areas indicates room for further technological innovation.
4. Government initiatives in finance aim to enhance security in the digital payments ecosystem, recognizing the vulnerabilities inherent to PoS terminals and other digital payment systems.

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