‘Using Bank POS Will Kill Your Business’- Retail Stores Explain Why They’re Turning To Fintechs
World Health Pharmacy, an Abuja-based business is one of the biggest customers of commercial bank Point of Sale (POS) but the store has dumped all bank POS for Moniepoint and Pay Force.
The pharmacy had five POS machines obtained from Access Bank, Zenith Bank, Eco Bank, Union Bank, and First Bank.
Last year, after several frustrations and losses suffered from the use of bank POS machines, the Pharmacy dumped the five bank POS for Moniepoint and PayForce.
World Health Pharmacy is one out of the thousands of Nigerian businesses that have switched to fintech firms.
Fintechs like Moniepoint and Opay are gradually taking the lunch of commercial banks in Nigeria as the majority of businesses are fast replacing traditional banks’ payment services with fintech.
Nigeria’s naira redesign policy which resulted in a cash crunch for months compelled a lot of businesses to adopt a cashless payment using their cards and electronic transfers.
The Central Bank of Nigeria in a bid to promote its cashless policy agenda and curb illicit hoarding of naira notes redesigned the N1,000, N500 and N200 notes with a deadline of January 31st which was later shifted.
But the Supreme Court had ordered that the old notes remain legal tender until the end of 2023.
Bank transfers failed to function adequately and electronic payments were also frustrating.
Sharing the pharmacy’s experience with NewsNGR, Charles, a representative said they have no regret switching to fintech services.
He said, “Bank POS disappointed us before we dropped them for the new fintech. Alerts do not drop until one or two days. So when we saw something smarter and better we had no option but to switch.
“With the new POS, business transactions are faster and there are lots of features like light subscriptions, bill payments, and deposits on behalf of a customer and we make our money asides from the sales we do. Bank POS is analog. You can only deposit money for people, you can’t withdraw. With this, you can send, and move your money from your POS instantly.
“The most painful aspect of using bank POS is network failures and delays when doing transactions. In fact, sometimes their agents will not come to rectify issues when something goes wrong with the POS and when that happens, you can no longer do POS transactions until they eventually come. Most people in Abuja use cards and when you don’t have a POS that is active, you will lose them and lose sales.
“Compared to the new order, bank charges are not fair. Now when we transact, we receive instant alerts. For banks, we have to wait till the next day and sometimes, it won’t reflect until you go to the bank to complain and you will start the process of filling out forms before your money will drop into the account.”
Another loophole of bank POS according to him is that the pharmacy has lost thousands of naira because customers go to banks to make ‘fraudulent’ claims that a product they bought was not delivered and request banks to reverse the money.
“Do you know that sometimes, customers go to the banks and make fraudulent claims that a transaction declined and the bank will now reverse the money to the customers? Some banks will call to verify. It has happened to us several times when customers go to the bank and request for a reversal when the transaction was successful. You can’t see such happen with fintech POS.
“Our suppliers have dumped their Zenith Bank POS for Monniepoint too. When you have a crowd, it is very easy to attend to them and now people are delighted to come to us. Before they used to complain and express frustration,” he said.
He said unlike the bank POS, if you have a failed transaction and the customer is debited, “you can launch a reversal request for the customer instantly. The person doesn’t need to go to the bank.”
I.C World Center, a popular retail store in Abuja has made use of commercial bank POS and accounts for their daily sales transactions.
But by the end of 2022, the retail store had substituted its bank accounts held with Access Bank for a Providus Bank account and also using Monniepoint and Opay for POS transactions.
“Using Providus and the likes of Opay is far better than using accounts and POS of commercial banks. When we were still making use of Access Bank accounts to receive transfers, customers were subjected to waiting for minutes, sometimes hours just for us to confirm their transfers.
“But with these fintech companies, transfers are instant and we rarely experience network problems. Even when the network is very bad, they are still better than commercial banks. It used to be frustrating when we relied on commercial banks for payment services,” said Uzo, a customer desk representative at the retail store.