Diamond POS 1

According to an article by the Daily Trust, the people of Potiskum, Yobe State, have found a way to get cash despite Boko Haram’s disruptive activities in the state. They’ve adopted Point Of Sale (POS) machines, instead of ATMs, for cash withdrawals.

Customers make bank transfers on the POS machines using their ATM cards, and the operators hand over the corresponding amount in cash. In exchange, these POS operators keep a certain percentage of the withdrawn amount as their commission. Little wonder that their system of cash dispensation is touted as a form of mobile money.

The Central bank of Nigeria deployed POS machines in the country 2012, as part of an effort to encourage Nigerians to adopt a cashless system of payments. Potiskum, a city in North-Eastern Nigeria, has seen traditional methods of cash withdrawal deteriorate, and these POS bankers have filled the void. Home to the largest cattle market in West Africa, the city is always filled with traders from far and wide.

At the moment, there are only three banks – Keystone Bank, First Bank and Bank of the North- servicing the area. A staff of one of the banks admitted the bank’s shortcomings in fulfilling the cash needs of the town and its markets and traders. This situation has fueled the growth of the POS cash transfer business, and there are several POS operators scattered across the city.

What makes money mobile? This article describes mobile money with recharge card sale as an example. Remember when you could sell your recharge card for money at any nearby vendor? Good times.

“I started the business out of desperation to help people overcome cash shortage in the town. It wasn’t profitable at first, but with my little accountancy background, I later converted it to a more profitable venture. Now, I have five staff and we all depend on this job.” says Ali Abba Ya’u, a POS operator in Potiskum. Another POS operator said he got as high as 100 customers on some days. Yet another said he collected a 2% commission on every N10,000 withdrawal.

A few customers expressed concern over the system’s lack of government regulation. They believe that government approval will provide some semblance of security for the trade.

This is in contrast to the opinions of individuals in the fintech sector concerning mobile money. They have accused the government of over-regularising the industry, and crippling innovation.

The news reminds me of the 21 days I spent in NYSC camp without an ATM machine. One of our options was giving our ATM cards and pins to a stranger leaving the grounds. This person would then use an ATM machine in town and return with the cash. Several POS bankers offered their services for a 5% commission. This was, of course, a better and much more convenient solution, even with the network challenges.

Government intervention or regulation aside, this system is making the lives of the people in Potiskum easier and they have earned this reprieve.

Loretta Adamu Author

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