<p class="last-updated">Last updated on April 7th, 2025 at 01:34 pm</p>
<p>OPay is a prominent player in Nigeria&#8217;s dynamic financial technology sector, offering a wide range of services, including its popular Point of Sale (POS) terminals. </p>



<p>These terminals have gained significant traction across the country, facilitating digital transactions and contributing to financial inclusion. </p>



<p>However, amidst the numerous advantages, Nigerian businesses must be aware of potential drawbacks before adopting OPay POS. </p>



<p>This article provides a comprehensive analysis of the disadvantages, empowering businesses to make informed decisions and navigate the complexities of this technology.</p>



<h2 class="wp-block-heading">#1. Regulatory and Policy Issues</h2>



<p>Operating a business in Nigeria requires careful consideration of the regulatory landscape, and using OPay POS is no exception. </p>



<p>POS operators must navigate a complex web of regulations set by the Central Bank of Nigeria (CBN) and other authorities.</p>



<h3 class="wp-block-heading">Agent Banking License</h3>



<p>The CBN mandates that all POS operators register under the <a href="https://www.goidara.com/blog/regulatory-requirements-for-point-of-sale-pos-operators-in-nigeria">Agent Banking framework. </a></p>



<p>This involves partnering with a licensed financial institution, such as a bank or payment service provider approved by the CBN, and submitting necessary documentation, including valid identification, proof of address, and a business registration certificate. </p>



<p>Operators must also sign an agreement with the financial institution outlining their roles, responsibilities, and compliance expectations.  ;</p>



<h3 class="wp-block-heading">CAC Registration</h3>



<p>In addition to obtaining an agent banking license, POS operators must register their businesses with the <a href="https://truehost.com.ng/corporate-affairs-commission-nigeria-public-search/">Corporate Affairs Commission</a> (CAC).</p>



<p>This registration ensures the business has a unique and approved name and meets regulatory requirements for taxation and compliance.  ;</p>



<h3 class="wp-block-heading">CBN Guidelines</h3>



<p>The CBN has established specific guidelines for POS operators under its Regulatory Framework for Agent Banking and Agent Networks in Nigeria. </p>



<p>These guidelines cover various aspects of POS operations, including transaction limits, Know Your Customer (KYC) procedures, and record-keeping. </p>



<p>Adhering to these guidelines is crucial for maintaining compliance and avoiding penalties.  ;</p>



<h3 class="wp-block-heading">EMTL Levy</h3>



<p>The Federal Government of Nigeria has implemented a â¦50 levy on electronic money transfers exceeding â¦10,000 conducted through fintech platforms, including OPay. </p>



<p><a href="https://www.pulse.ng/articles/news/fg-to-enforce-new-law-on-users-of-opay-moniepoint-others-2024120310482635993">This levy</a>, introduced under the Electronic Money Transfer Levy (EMTL) in the Finance Act 2020, applies to transactions above the specified threshold and is collected by the Federal Inland Revenue Service (FIRS). </p>



<p>While the levy aims to generate revenue for national development, it adds to the cost of financial transactions for businesses.  ;</p>



<h3 class="wp-block-heading">Regulatory Burden vs. Financial Inclusion</h3>



<p>While regulations are essential for ensuring accountability and stability in the financial sector, they can also create a significant burden for small businesses, especially those operating with limited resources. </p>



<p>This burden can hinder the adoption of POS systems by smaller businesses, potentially limiting the reach of financial inclusion efforts. </p>



<p>Moreover, the proliferation of unlicensed POS agents, or &#8220;umbrella agents,&#8221; raises concerns about non-compliance with regulations and the potential for fraudulent activities. </p>



<p>Striking a balance between regulation and fostering financial inclusion remains a key challenge for the Nigerian POS market.  ;</p>



<h2 class="wp-block-heading">#2. Transaction Fees and Charges</h2>



<p>OPay emphasizes the affordability of its POS services, highlighting low transaction fees. </p>



<p>However, businesses should carefully examine the fee structure before committing to OPay POS. </p>



<p>Transaction fees are based on the amount being processed, and these fees can vary significantly depending on the type of transaction.  ;</p>



<p>Here&#8217;s a breakdown of the fee structure for different transaction types:</p>



<ul class="wp-block-list">
<li><strong>International Transactions:</strong> 4% per transaction  ;</li>



<li><strong>Payout/Transfer (OPay wallet):</strong> â¦5 per transaction  ;</li>



<li><strong>Payout/Transfer (other banks/MMOs):</strong>
<ul class="wp-block-list">
<li>â¦5,000 and below: â¦10 per transaction  ;</li>



<li>â¦5,001 and â¦50,000: â¦25 per transaction  ;</li>



<li>â¦50,000 and above: â¦50 per transaction  ;</li>
</ul>
</li>



<li><strong>Bill payment:</strong> Based on commission  ;</li>
</ul>



<p>You should factor these fees into your financial planning to avoid unexpected costs and ensure profitability. </p>



<p>Also, the <a href="https://ammban.org/ammban-blames-operators-for-proliferation-of-unlicensed-pos-agents/">CBN&#8217;s recent directive</a> on cash-out limits may incentivize POS agents to increase cash-out fees to compensate for potential revenue loss .  ;</p>



<h2 class="wp-block-heading">#3. Network Connectivity Challenges</h2>



<p>Reliable network connectivity is fundamental for seamless POS transactions. </p>



<p>However, OPay POS users may experience connectivity issues, especially in areas with limited network coverage. </p>



<p>Network failures can disrupt business operations, leading to failed transactions, processing delays, and customer dissatisfaction. </p>



<p>While OPay claims to have a robust infrastructure and maintain stable network connections, businesses should be prepared for potential disruptions and have alternative solutions in place.  ;</p>



<h2 class="wp-block-heading">#4. Transaction Failures and Downtime</h2>



<p>Despite advancements in POS technology, transaction failures can occur due to various factors, including network issues, hardware or software malfunctions, and incorrect network settings. </p>



<p>These failures can result in financial losses for businesses and cause inconvenience for customers. </p>



<p>While OPay offers customer support to address transaction failures, resolving these issues can be time-consuming, potentially affecting business operations.  ;</p>



<p>But I must give them, OPay&#8217;s reliable network uptime has proven to be a significant advantage during periods of bank outages, offering businesses a more dependable platform for processing transactions.  ;</p>



<h2 class="wp-block-heading">#5. Security Concerns and Fraud</h2>



<p>Security is a critical aspect of any financial transaction, and OPay POS is no exception. </p>



<p>While OPay emphasizes its commitment to security and fraud prevention , businesses should be aware of potential vulnerabilities. </p>



<p>OPay&#8217;s KYC system has <a href="https://techcabal.com/2023/12/15/opay-faces-scrutiny-over-weak-kyc-system-impersonation-account-tiers-raise-red-flags/">faced scrutiny for its lax registration processes</a>, which could make the platform susceptible to fraudsters. </p>



<p>The increasing use of POS terminals has also attracted the attention of hackers and cybercriminals who exploit vulnerabilities to steal card data and perpetrate fraud.  ;</p>



<p>To mitigate security risks, OPay offers an account and card blocking feature that allows users to quickly secure their accounts in case of theft or loss. </p>



<p>Users can dial *955*131# to block their account or *955*132# to block their card and should contact OPay customer support immediately. </p>



<p>OPay also implements security measures such as data encryption and compliance with the Payment Card Industry Data Security Standard (PCI DSS) to protect user information and ensure secure transactions.  ;</p>



<h2 class="wp-block-heading">#6. Customer Support and Service Quality</h2>



<p>OPay provides various customer support channels, including a helpline, in-app customer service, and WhatsApp. </p>



<p>However, the quality of customer support can be inconsistent. </p>



<p>Some users have reported difficulties reaching customer support, experiencing delays in issue resolution, and encountering unhelpful or incompetent representatives.  ;</p>



<p>To improve customer service, OPay has been actively working on enhancing its support channels and processes. </p>



<p>The company has established a network of 17 physical customer service centers across Nigeria to provide face-to-face support for users who prefer in-person interactions. </p>



<p>OPay also offers a 24/7 online customer service center with self-service resources, live chat with customer service agents, and a dispute reporting feature within the app. </p>



<p>On top of that, OPay has a service level agreement that includes a 48-hour transaction dispute resolution and 24/7 customer support availability.  ;</p>



<h3 class="wp-block-heading">Customer Service as a Differentiator</h3>



<p>Consistent and reliable customer support is a crucial factor for businesses when choosing a POS provider. </p>



<p>The ability to quickly resolve issues, receive timely assistance, and have access to knowledgeable support staff can significantly impact business operations and customer satisfaction. </p>



<p>Businesses should prioritize customer service quality when evaluating POS options and consider the potential impact of inconsistent support on their daily operations.</p>



<p>Read also: <a href="https://truehost.com.ng/list-of-opay-offices/">List of Opay Offices</a></p>



<h2 class="wp-block-heading">#7. User Reviews and Feedback</h2>



<figure class="wp-block-image size-full"><img src="https://truehost.com.ng/wp-content/uploads/2025/03/image-1.png" alt="Disadvantages of OPay POS for Nigerian Businesses" class="wp-image-10238"/></figure>



<p>User reviews provide valuable insights into the actual experiences of businesses and individuals using OPay POS. </p>



<p>While many users appreciate the convenience and functionality of OPay POS, some have expressed concerns and negative feedback.</p>



<p><a href="https://www.reddit.com/r/Nigeria/comments/118p0wi/what_are_you_guys_experiences_with_opay/">Some users have reported issues</a> with OPay&#8217;s app, such as difficulties with transfers, occasional system errors, and frustration with the lack of push notifications for transactions. </p>



<p>Others have mentioned concerns about customer service responsiveness and the need for improvements in issue resolution.  ;</p>



<p>As a business, consider both positive and negative feedback when evaluating OPay POS and weigh these user experiences against their specific needs and expectations.</p>



<h2 class="wp-block-heading">Opay Alternative POS Options in Nigeria</h2>



<p>If Opay sounds nothing like your cup of tea, there are other options.</p>



<p>See, the POS market in Nigeria is competitive, with various providers offering a range of features and services. </p>



<p>As such, you should carefully evaluate these alternatives, comparing their strengths and weaknesses to make an informed decision based on their specific requirements.</p>



<p>I have put together a table to help with this.</p>



<figure class="wp-block-table"><table class="has-fixed-layout"><tbody><tr><th>POS Provider</th><th>Key Features</th><th>Potential Benefits</th><th>Potential Drawbacks</th></tr><tr><td>Moniepoint</td><td>User-friendly interface, fast transaction processing, competitive fees, reliable customer support <sup></sup></td><td>Ease of use, affordability, efficient transactions, reliable service</td><td>Limited functionality compared to OPay, <a href="https://truehost.com.ng/disadvantages-of-moniepoint/">potentially fewer value-added services</a></td></tr><tr><td>PalmPay</td><td>Contactless payment functionality, wide agent network, integrated financial services <sup></sup></td><td>Faster transactions, wider reach, convenient payment options</td><td>Limited adoption of contactless payments, potential for higher transaction fees</td></tr><tr><td>Paystack</td><td>Supports various payment methods, online and offline payments, developer-friendly APIs, strong fraud protection <sup></sup></td><td>Versatility, comprehensive payment solutions, secure transactions</td><td>May have higher transaction fees compared to Moniepoint, potentially less widespread agent network</td></tr><tr><td>OPay</td><td>Versatile payment solutions, integrated financial services, low transaction fees, fast and secure transactions, different POS terminal options (Mini POS: N8,500, Traditional POS: N35,000, Android POS: N50,000) <sup></sup>, mini POS functionalities (check-outs, withdrawals, deposits, airtime/data top-ups, bill payments, and other mobile banking services) <sup></sup></td><td>Payment flexibility, access to various financial services, affordability, efficient operations</td><td>Potential for network connectivity issues, transaction failures, and inconsistent customer support</td></tr></tbody></table></figure>



<p>OPay and PalmPay have a combined market share of over 50% in the agency banking market in Nigeria, highlighting their strong position in the industry.  ;</p>



<h2 class="wp-block-heading">Conclusion: Weighing the Risks and Benefits</h2>



<p>OPay POS offers undeniable benefits for Nigerian businesses, including facilitating digital transactions, expanding financial inclusion, and providing access to a wider range of financial services. </p>



<p>However, businesses should carefully consider the potential disadvantages, such as regulatory hurdles, transaction fees, network connectivity challenges, transaction failures, security concerns, and customer support issues. </p>



<p>One of OPay&#8217;s key competitive advantages lies in its transaction speed and reliability, particularly during periods of bank outages or network disruptions. </p>



<p>The company&#8217;s robust infrastructure and focus on network uptime have positioned it as a dependable platform for businesses seeking consistent transaction processing capabilities.  ;</p>



<p>Conduct thorough research, compare alternative POS options, and carefully evaluate the features, fees, and service quality of each provider. </p>



<p>Read also:</p>



<ul class="wp-block-list">
<li><a href="https://truehost.com.ng/top-10-best-pos-machines-in-nigeria/">Top 10 Best POS Machines in Nigeria</a></li>



<li><a href="https://truehost.com.ng/how-to-start-pos-business-in-nigeria/">How To Start POS Business In Nigeria</a></li>



<li><a href="https://truehost.com.ng/moniepoint-vs-palmpay/">Moniepoint vs Palmpay: Which One Is Best?</a></li>
</ul>