The current experience of PoS Agents littered by the roadside as mere cash peddlers needs to evolve beyond what it is today. It’s time to give the agents the agency in agency banking.
Introduction
“Moniepoint don finish this market, Dayo. I am shutting down my agency banking division. Na just Opex dey there, I no see business. In fact, I need a foreign investor or startup to take it out of my hands before the end of the year. Plus, the recent CBN circular capping cash withdrawals at ₦100,000, you better focus on merchant payment collections. It has a higher margin sef.”
Ha! I exclaimed in response as I listened to a mentor over a cup of tea around Ikoyi. I was in Lagos in April to pitch our payment terminal solutions to few commercial banks, so I took some time out to meet my mentor who is an industry veteran with an active fintech in Nigeria with more licenses than we do.
But how did we get here? This POS agent turned pure water situation that we now find ourselves in.
Where there is so many POS agents that it would be considerable if the Central Bank of Nigeria stop issuing the license citing market saturation.
Where it is not unthinkable to cease customer acquisition for the business. Where getting a super-agent license is almost laughable.
To understand this situation or even chart a way forward for what agency banking could and should look like going forward, we need to understand where it’s coming from.
You see before POS Agents were ATMs. Yes, ATMs. ATMs that have now become building props; analogue jewelry serving as mere objects of decor to the bank’s building than as the store box of financial transactions they used to be.
Sometime in 2012, I got invited to a conference by Keystone Bank as one of their banking partners. This was thirteen years ago when I started my foray into the Nigerian Banking/Fintech space after taking over my father’s real estate business; one of the divisions of the business focused on finding high traffic and secured pedestrian locations where ATMs can be installed for commercial banks.
“We need 120,000 ATMs nationwide to serve the cash needs of Nigerians”. Seventeen-year-old me listened attentively to a representative of the CBN as he gave a lecture on Why banks need to improve their ATM Spread and Service Availability.
Around this time, a lot of the fast payment services we are now accustomed to were still at a nascent stage. In fact, few Banks could boast of internet banking or the quick mobile banking capabilities that are now synonymous with financial service delivery in Nigeria.
Today, the extent to which ATMs serve our cash needs is almost non-existent and the well-dreaded long ATM queues are now memories of a past replaced by POS Agents on every roadside peddling cash to Nigerians to care for it or should I say who can afford it.
Earlier this year (2025), banks borrowed over ₦8.2 trillion from the CBN in just 17 days to address cash shortages. Yet, the cash scarcity persisted. Customers, frustrated by long queues and empty ATMs, turned into a more accessible alternative: PoS agents.
If we needed 100,000 ATMs to serve Nigerian Cash Needs in 2012, surely over two million POS Agents peddling cash on the streets would be enough. I digress. Back to the topic at hand. A little trip down memory lane.
Agency Banking in the Beginning – A Vision for financial Inclusion
My AI Copilot tells me Agency Banking kicked off in 2013 with the first set of entrants such as Interswitch, Paga, and First Bank’s FirstMonie.
During this epoch (2013-2020), agency banking was strictly the purview of cybercafes – oh cybercafes – and business centers – primarily hubs for servicing document needs such as typing, printing, laminating, and photocopying – became the unlikely pioneers of Nigeria’s agency banking revolution.
These centers, somewhat trusted fixtures in their communities, were well-positioned to take on the additional role of financial service providers. And it made sense. With their existing infrastructure – computers, internet access, and a steady stream of foot traffic – they seamlessly integrated agency banking into their operations.
I recall multiple instances back at the University of Ilorin where I was faced with the difficult choice of trading N100 Paga Charge at the cybercafe or taking a N30 Taxi to face GTBank’s fluctuating ATMs at Tanke Junction.
According to Regulatory Framework for Agency Banking in Nigeria. The following entities are eligible for appointment as agents: Limited liability companies, sole proprietorships, Partnerships, Cooperative Societies, public entities, educational institutions, Trusts and any other entity which the CBN may prescribe.
If you asked anyone who cares, what the primary purpose of AGENCY BANKING Framework is in Nigeria? They’d say Financial Inclusion.
What is financial inclusion? Simply put, access to financial services.
But to what extent do agents provide access to financial services?
Do Agents provide access to financial services or access to cash? This brings us to where we are now.
Agency Banking as it is today – The New Pure Water Business
Originally intended to serve rural and underserved areas, these agents, often operating from roadside kiosks, shops, under umbrellas, or with as little as a table have now become the primary cash distributors in both urban and rural Nigeria.
With over 2.7 million PoS terminals compared to fewer than 21,500 ATMs nationwide, the imbalance is stark.
But for many Nigerians including myself, the convenience outweighs the cost. Unlike ATMs, PoS agents are everywhere, and they rarely run out of cash. Even for banks, the investment cost of a POS terminal is preferable to that of an ATM.
This shift has birthed a parallel cash economy. Some agents source cash through informal means—withdrawing large sums from ATMs meant for the public or buying cash from cash heavy businesses like fuel stations in exchange for digital transfers. This has created a shadow market where cash is a commodity, and access depends on who you know and how much you’re willing to pay. It is now common to find any shop offering PoS agent services.
The result? A system where cash is no longer free, and the poorest often pay the highest price.
So, the CBN responded with a mix of penalties and policy reforms. Most recent is the circular limiting cash withdrawal per day to N100,000, compulsory registration of PoS agents as businesses, and mandatory transaction routing through the right channel. At PayZeep, we have compliance checks in place for clients who rely on our agency’s banking APIs and white label PoS and mobile applications.
So, What’s next?
The future of agency banking – Giving the Agents Agency
As I think about the future of our agency banking business, one thing is clear: the future of banking in Nigeria will not be defined by marble halls or steel machines. It will be shaped by the people—by agents who bring financial services to the doorsteps of millions. But for this future to be sustainable, agency banking must evolve beyond the informal, cash-peddling model it has become.
How can we do this?
Understand that the Market Is Not Saturated—The Cities Are
Contrary to popular belief, the agency banking market is far from saturated. What’s saturated with are the cities. Rural and peri-urban areas remain underserved, and that’s where the next wave of growth lies. By strategically expanding into these regions, we can unlock new customer segments and deepen financial inclusion.
Expanding the Offerings and Looking the Part
The current landscape is dominated by makeshift setups, agents operating under umbrellas or in roadside stalls. While functional, these setups lack permanence, security, and professionalism. The next phase must prioritize structure and dignity and this role falls on the financial institutions.
Let’s eliminate the umbrellas and stick with the kiosks. Agency banking must move beyond cash-in/cash-out.
These agents can become low-cost real estate for selling a wide range of financial products and services:
Account Opening: Empowering Agents with Open Banking Tools
Super Agents can now leverage SANEF APIs to onboard customers directly at agent locations. These APIs allow agents to:
- Create Tier 1 and Tier 2 accounts instantly for individuals.
- Capture KYC data and submit it securely to banks.
- Issue digital wallets linked to mobile numbers.
If APIs like “Create Wallet by Bank” evolve to include broader access, such as linking to savings, loans, or insurance products, agents could become true frontliners of open banking. This would allow them to offer a full suite of financial services, not just basic transactions.
The Open Banking Nigeria API Standard supports this vision by enabling secure, consent-based data sharing between banks and third-party providers.
This means agents could eventually help customers compare products, switch banks, or access tailored financial tools, all from a kiosk. Imagine a super-agent location where you can open any bank account and get a debit/credit card immediately.
BVN & NIN Enrollment: Biometric Identity at the Last Mile
The Bank Verification Number (BVN) is a critical component of Nigeria’s financial identity system. Today, many rural dwellers still lack BVNs due to the distance from enrollment centers.
The National Identification Number (NIN) is also mandatory for SIM registration, banking, and government services.
Yet, many Nigerians, especially in rural areas, remain unregistered. By integrating biometric registration kits into agent locations, agents can:
- Enroll citizens for NINs.
- Update or verify existing NINs.
- Link NINs to BVNs and bank accounts.
This decentralization would drastically reduce onboarding friction and bring millions more into the formal financial system.
Card Issuance: Instant Access to Digital Payments
Some FinTech’s have already demonstrated the feasibility of instant card issuance at agent locations. This empowers customers with immediate access to digital payments, reducing reliance on cash. Imagine again, a situation where you can just walk into a bank’s agent location to replace your ATM card or file a transaction dispute.
Bill Payments & Tax Collection: Agents as Government Touchpoints
Agents already facilitate airtime top-ups and utility bill payments, but their role can expand to include:
- Tax collection for local and state governments.
- License renewals (e.g., driver’s licenses, business permits).
- Business Registration
- Social welfare disbursements and pension payments.
This turns agents into multi-service hubs, reducing the need for citizens to visit government offices and improving compliance through convenience.
One of our latest service offerings is targeted at local and state governments to empower youths in certain locations like markets and parks to deliver agency banking services and serves as Tax agents.
By expanding their capabilities and formalizing their infrastructure, agents can evolve from informal cash peddlers into true community bankers, trusted, tech-enabled, and deeply embedded in the financial lives of everyday Nigerians.
*Adedayo Awojobi is currently the COO of payZeep by Paymi Solutions ( a fintech company with pssp, ptsp and agency banking licenses). He is a seasoned entrepreneur and product management leader with over a decade of experience delivering impactful digital solutions across the fintech and enterprise software sectors.
