GTCO Maintains Zero POS Fees As Agbaje Targets SME Growth

By Johnson Emmanuel

Guaranty Trust Holding Company (GTCO) Plc, at its Annual General Meeting (AGM) recently held virtually, confirmed through Mr. Segun Agbaje, Group Chief Executive Officer, that its zero Point of Sale (POS) processing fee policy for small and medium-sized enterprises (SMEs) will remain permanent. The decision follows the 2025 removal of Merchant Service Charges on all GTBank terminals, aimed at reducing transaction costs for merchants, expanding payment adoption, and supporting SME scalability within Nigeria’s retail payments ecosystem.

DECISION HIGHLIGHT
Institutionalisation of zero POS processing fees as a long-term competitive and financial inclusion strategy.

DECISION MEMO
The policy represents a pricing intervention designed to capture transaction volume rather than margin. By eliminating Merchant Service Charges, Guaranty Trust Holding Company is effectively subsidising payment infrastructure to deepen merchant acquisition and transaction throughput.

Agbaje stated: “Zero POS charges are necessary to our strategy… it is not a promo… it will continue for as long as this organisation exists.” The framing removes ambiguity, positioning the initiative as structural rather than tactical.

The trade-off lies in revenue substitution. Forgone fee income must be offset through scale effects, cross-selling, or downstream financial services monetisation. This aligns with the group’s broader holding company model spanning banking, asset management, pensions, and payments, where ecosystem capture can outweigh single-line profitability.

Agbaje further noted the need to balance “capital appreciation and an increasing dividend,” indicating that shareholder return expectations remain intact despite margin compression in specific segments. The policy therefore signals confidence in long-term earnings resilience, even as near-term profit before tax and net profit show marginal declines.

DATA BOX
• POS policy: zero Merchant Service Charges (since February 2025)
• Target segment: small and medium-sized enterprises
• Profit before tax: N1.23trn (2025) vs N1.27trn (2024), -2.78%
• Profit after tax: N865bn vs N1trn, -14.94%
• Gross earnings: N2.215trn (2025)
• Total dividend: N12.76 per share, +59% year-on-year
• Strategy progress: ~10% completion across four pillars

WHO WINS / WHO LOSES
Winners: SME merchants, retail payment users, high-volume transaction ecosystems.
Losers: Short-term fee revenue streams, competing banks reliant on transaction charges, low-scale operators unable to offset margin loss.

POLICY SIGNALS
Reinforces private sector-led financial inclusion through cost reduction, aligning payment system expansion with SME growth objectives.

INVESTOR SIGNAL
Indicates a scale-driven growth model with willingness to sacrifice near-term fee income for long-term ecosystem dominance, while maintaining dividend attractiveness.

RISK RADAR
Primary risk is revenue dilution if transaction scale does not compensate for lost fees. Secondary risks include competitive imitation, margin compression across the banking sector, and execution risk in cross-selling alternative revenue streams.