POS agents made cash accessible. Now it’s time to rethink them
As criticism of POS agents grows, Nigeria risks overlooking their deeper value. Built for an informal economy, these networks could power access to finance, commerce, and essential services.
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If you live in Nigeria or most parts of Africa, you’re familiar with the sight of mobile money agents, or in Nigeria’s case, POS agents. Over the last decade or so, they’ve been instrumental in delivering financial services to the last mile, decongesting banking halls and ATM queues in the process.<br />
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But they are fast becoming an endangered species, especially in Nigeria.<br />
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In the last three years, there’s been a rise of what, for lack of a better word, I would call an anti-agent sentiment. There’s growing dissatisfaction among Nigerians over what many have termed unfair practices by POS agents. The argument is that withdrawing money through an agent has become more expensive than using an ATM, defeating the purpose of their existence. Many now say they have to “pay” to access their own money. Despite the vast majority of Nigerians accessing financial services through them, many baulk at the cost of using them.<br />
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I won’t litigate that argument in depth here. It is worth noting, however, that transaction fees are not unique to POS agents. For much of modern banking history, accessing financial services has come at a cost. Banks themselves, for instance, have valid economic reasons for limiting ATM expansion, including infrastructure and maintenance costs — factors that the Central Bank of Nigeria is now attempting to address.<br />
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Instead of dwelling on present grievances, it may be more useful to ask a forward-looking question: what does the future hold for POS agents, and how can their relevance be sustained or even expanded?<br />
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Because, despite the backlash, the factors that made POS agents successful in the first place have not disappeared. If anything, they’ve become even more relevant. To understand that, we have to go back a bit.<br />
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Agents are hardly new to Nigerians<br />
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In their current form, agents are not new to most Nigerians. Only about 20 years ago, the only way to buy airtime was through a small shop in your neighbourhood. These small shops were, in many ways, the p...
