SA’s Fintech Firm Yoco Gives 10 000 Entrepreneurs Access to Card Payment Facilities

By Staff Writer

South African payments company Yoco announced on Thursday that it now has 10 000 SMEs in South Africa using its point-of-sale payments platform to accept card payments.

Yoco, which was launched at the end of 2015, said it was adding over 1 000 new SMEs to its base every month, “making it the largest independent mobile point-of-sale player in South Africa by number of merchants”.

SMEs are big business in South Africa, contributing close to 50% to GDP and driving most of employment. However, due to their small size, fragmented nature, and general unpredictability, they remain overlooked by large financial institutions because it hasn’t been economically viable to reach them from a cost and risk standpoint.

SME financial services participation is limited typically to the use of a cheque or savings account by the business owners. Nowhere is this dynamic more visible than in card acceptance at the point of sale, where more than 7 out of 10 adults in the country have a card, but less than 10% of businesses can accept cards.

“Many SMEs struggle to get a card payment solution from the traditional providers because the traditional offerings do not cater for small or young businesses,” says Yoco CEO and co-founder, Katlego Maphai.

Minimum trading history, 12-24-month lock-in contracts and a sometimes-month-long application process are just some of the hurdles faced by SMEs when applying for a card machine.

“It means that they are unable to offer card payments to their customers. But how will they grow if they cannot accept card payments? To an SME, every payment matters, especially today,” says Maphai.

Lowering the barriers to entry

Yoco has focused its efforts on expanding access to card payments to all types of SMEs, regardless of size, industry and even location. Its mobile card readers can be used to accept payments both at the store or on the go, and the application process takes five minutes online, after which a courier delivers the card reader to the business owner. The card reader can be purchased upfront at R1 749 once-off or paid through easy instalments.

“By lowering the barriers to entry, we are enabling all types of SMEs to start accepting card payments, and together with our free point-of-sale app and business intelligence portal, start tracking their sales and formalising their business to enable growth,” says Maphai.

Yoco was the last entrant into the competitive mobile point of sale space in South Africa.

Yoco launched at the end of 2015, after a successful beta programme, with 500 merchants.

At the end of 2016, the company announced it had acquired over 5 000 SME merchants, growing 10x in a year.

The company has doubled in size since the beginning of the year and is now adding over 1 000 new SME merchants to the platform every month.

“This makes Yoco the fastest growing card-payments and the largest independent mobile point-of-sale player in South Africa by number of merchants.  This milestone is indicative of the significant demand for these kinds of services in the SME sector. Over 72% of Yoco merchants had never accepted cards before, a key metric for us at Yoco, as we look to be market makers, not just participants,” concludes Maphai.