By Paul Chimodo
In the bustling streets of Nigeria, a quiet revolution is taking place. Where once stood the ubiquitous recharge card vendors, now flourish Point of Sale (POS) terminal operators, forming a new breed of small business owners. As the economic climate becomes increasingly challenging, with rising unemployment and stagnating job opportunities, a growing number of Nigerians have turned to POS operations as a means of survival. This trend reflects not only the economic struggles faced by many but also the implications of government policies and the need for systemic change.
The Rise of POS Operators
In the heart of Port Harcourt, within the chaotic maze of Abali Park, a young woman named Amaka Uzodike is at her small POS terminal, attending to a steady stream of customers. With a warm smile, she assists a mother of three looking to withdraw cash. “This work provides for my family,” Amaka explains, reflecting the sentiment of many who find themselves drawn into this emerging sector. “I used to sell recharge cards, but now this is a better opportunity. I’m able to earn more and support my children’s education,” she adds as she processes transactions, effectively occupying a role that has replaced conventional retail avenues for many.
Across the country, Amaka’s story resonates with thousands of others who, in the face of economic adversity, have taken the leap into POS operations. According to the National Bureau of Statistics, Nigeria’s unemployment rate reached 33.3% in 2020, an alarming statistic that has pushed many young Nigerians toward alternative options for income. In 2021, the statistic did not improve significantly, and as the situation continues, many see POS operations as a workaround for the lack of available jobs.
The positivity of entrepreneurship is being overshadowed by the challenges faced in establishing these small businesses; many operators must navigate a myriad of bureaucratic hurdles and sometimes remain subject to exploitative practices by banking institutions. Nevertheless, the growth of POS operators marks a significant shift in Nigeria’s retail landscape, where convenience and accessibility are becoming increasingly prioritized.
However, the surge of POS operators amid rising unemployment and economic struggles paints a complex picture colored by bad government policies. Over the years, successive administrations have struggled to implement lasting solutions to Nigeria’s pervasive economic issues. For many experts, the persistent corruption and lack of policies aimed at empowering the youth have cultivated a fertile ground for informal businesses like POS terminals to thrive under the weight of necessity.
Ignatius Chukwu, a Finance Analyst and Business journalist, underscores this phenomenon: “We have witnessed a dearth of opportunities for our young population over the years. The government has not been able to engage with young people effectively or provide the necessary skill sets for modern employment.” He further elaborates that POS operations have emerged not as a sign of economic health but as a desperate measure by individuals left without viable options.
For many banks, this situation has opened a gateway to a different kind of collaboration that raises ethical concerns. Some bank employees are suspected of colluding with POS operators, funneling business to the operators they own or co-own in exchange for kickbacks. In conversations with various operators, such as Obinna Okeke in Ibadan, the sentiment becomes clear: “A lot of us rely on the banks. They help us get terminals, and in return, they benefit from our transactions. Some staff even encourage us to open terminals under their names for them to earn commission on the side.”
This shadowy collaboration highlights a growing concern that the financial ecosystem is being manipulated to favor a select few while the average operator continues to struggle under mounting competition without adequate support systems from banking institutions or government programs.
The Transition from Recharge Cards to POS
The role of POS operators in the local economy has remarkably replaced that of recharge card vendors who previously dominated the streets. The transition reflects a broader trend in consumer behavior, as cashless transactions become more commonplace amid a shift toward digital banking. Operators like Amaka have capitalized on this change, providing an indispensable service to communities where access to banks is limited, particularly in rural areas.
While this transformation has had its benefits, it has come at the cost of traditional jobs and small vendors like recharge card sellers who find their livelihoods diminished. Adenike Ogundamisi, a former recharge card vendor turned POS operator, explains, “When I lost my source of income selling cards, I completely changed my business. With the POS, everyone prefers withdrawing cash or making transfers; it’s quicker and has more demand.”
However, the realities of this shift often come with hidden costs. Transaction fees and commission rates imposed by banks can eat into an operator’s already small profit margins. As operators complain of rising costs and declining revenue, it becomes evident that the transition to POS operations requires navigating a treacherous economic landscape.
Living on the Edge: The Operator’s Experience
Many of these POS operators work long hours to sustain their businesses. The daily bustle of transactions can be frenetic, with customers constantly engaging with the terminal, often unable to wait for minor glitches. Amaka recalls her experience: “One day, I had a blackout right in the middle of a peak hour. I lost customers that day. I can’t count how many times I’ve had to troubleshoot issues that are beyond my control.”
The digital dependency is accompanied by the ever-present threat of cybercrime that looms large over the POS business. An operator may find their working capital under threat should a hacker find a flaw in the system, and the financial repercussions can be devastating. For many, this goes beyond just money; it impacts their families, aspirations, and ultimately their ability to provide for their households.
Fueling a Cycle of Poverty
Despite the perceived advantages of POS operations, the system perpetuates issues rooted in poverty. Further complicating this reality is the fact many POS operators often lack adequate financial literacy or understanding of fiscal management, leading to further entrenchment in a cycle of poverty. An industry expert, Nneka Eze, advocates for better education and resources for budding entrepreneurs in Nigeria: “Many of these operators lack access to training that could increase their operational efficiency, profitability, and sustainability. They need to understand how to manage their finances and and grow their businesses effectively.”
Moreover, the government’s failure to create substantial employment opportunities has heightened the urgency for young people to seek alternatives. When asked about the role of government, Ignatius Chukwu states, “The government must recognize the dire need for job creation and skill acquisition programs tailored to engage our youth. Without such initiatives, we risk losing an entire generation to poverty and desperation.”
The realities of POS operations are both a tale of resilience and a cry for help. While many see the operators as entrepreneurs, the government must recognize their existence as a symptom of deeper malaise within Nigeria’s socio-economic fabrics. Critics argue that substantial investment in skill acquisition and sustainable job creation schemes remains the only viable long-term solution.
The emergence of POS operators must spark a larger conversation on how to engage with the youth and empower them to create, innovate, and lead. As the demand for POS services continues to rise, the potential for this sector holds promise; however, it will require broader support from both governmental and non-governmental organizations to ensure that these operators can thrive and not just survive.
As Amaka closes her terminal for the day, she reflects on her experience operating her POS business. “It’s a grind. Some days are good, some are bad, but it’s what I have now,” she shares, embodying the spirit of millions of young Nigerians caught in the balance between aspiration and harsh economic realities. With each transaction processed, operators like her contribute to an evolving economy, but they also highlight the urgent need for systemic change that not only aids in their economic endeavors but empowers them in meaningful ways.
As Nigeria grapples with the growing role of POS terminals, it becomes increasingly important to address the underlying issues that have led many to this point. Until such changes are made, the struggle of POS operators stands as a testament to the indomitable Nigerian spirit amidst adversity—one small transaction at a time.
