Yoco card-swipes for smaller firms

Local fintech start-up Yoco, which is partly backed by European and US venture capitalists, has launched a new cardswipe machine in SA in a bid to penetrate the SME market.

Local fintech start-up Yoco, which is partly backed by European and US venture capitalists, has launched a new card-swipe machine in the country in a bid to penetrate the small and medium enterprises (SME) market.

While these machines, which are formally referred to as pointof-sale devices, are present in all major shopping centres and retailers throughout SA, a largely untapped market exists for smaller businesses in the formal and informal sector.

Yoco said on Friday the opportunity for the new venture exists due to the relatively high adoption of bank debit and credit cards — 75% of adults in the country have one — and the relatively low adoption of pointof-sale devices by smaller merchants.

Only 350,000 out of 1-million formally registered businesses and 4-million sole proprietorships use such devices.

“Eighty percent of our clients are first-time device owners, and the other 20% are typically moving [from place to place] for product reasons. We are really interested in switching merchants from cash to card.

“There is typically about a 40% increase in revenue when merchants introduce a card device for the first time because people spend more when they can pay using a card,” said Yoco cofounder and finance chief Bradley Wattrus.

The company raised $16m (about R242m) a year ago from a consortium of local and international venture capital funds and is looking to expand its reach with the launch of a smaller device called Yoco Go to complement its existing offering through Yoco Pro, which already has 50,000 customers.

“It’s also fully featured, so it can accept tap-and-chip payments and it’s really small, so it’s easy to take it with you on the go,” said Wattrus.

The device can accept payments from both Visa and Mastercard.

The fintech sector — which comprises companies developing technology to accelerate innovation in financial services

is a burgeoning industry in SA owing in part to the country’s large banking sector and strong ICT market.

To obtain funding from specialist fintech and venture capital firms, start-ups need to demonstrate that their products and services can be easily rolled out to other markets.

IT’S ALSO FULLY FEATURED, SO IT CAN ACCEPT TAP-ANDCHIP PAYMENTS AND IT’S REALLY SMALL, SO IT’S EASY TO TAKE IT WITH YOU ON THE GO