How POS and Agency Banking Works in Nigeria Explained

The POS agent on the corner — withdrawals, deposits, transfers and bill payments from a handheld terminal — has become a core part of how Nigerians move money. Agency banking extends the formal system into places a branch never reached, and it is worth understanding how the money and settlement actually flow.

How it works

• The agent — a registered small business with a POS terminal and a float.
• The terminal — links to a bank or fintech that settles transactions.
• Settlement — cash in and out is reconciled against the agent’s account.

Where it fits

Agency banking mostly handles naira cash and local transfers — it sits alongside the bank system we describe in transferring between banks and BVN and banking. For anything crossing a border or involving foreign currency, the dom-account and remittance routes still apply, such as receiving from abroad. Verifying a payment still matters; see spotting a fake alert.