Bring­ing point-of-sale plat­forms to SMEs

The Star Early Edition - - NEWS - Staff Re­porter

CAPE TOWN-based South African pay­ments com­pany Yoco on Thurs­day an­nounced that it had reached a mile­stone of 10 000 small and medium en­ter­prises (SMEs) in South Africa us­ing its point-of-sale pay­ments plat­form to ac­cept card pay­ments.

The com­pany is adding more than 1 000 new SMEs to its base ev­ery month, mak­ing it the largest in­de­pen­dent mobile pointof-sale player in South Africa by num­ber of mer­chants.

By ex­pand­ing ac­cess to card pay­ments in the SME seg­ment, Yoco is con­tribut­ing to the growth of one of the most un­der­served seg­ments in the econ­omy when it comes to fi­nan­cial ser­vices, at a time when it is most ur­gently needed.

SMEs are big busi­ness in South Africa, con­tribut­ing close to 50 per­cent to gross do­mes­tic prod­uct 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 has not 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 seven out of 10 adults in the coun­try have a card, but less than 10 per­cent of busi­nesses can ac­cept cards.

Yoco, a South African fintech com­pany, started with the sim­ple idea that all busi­nesses should be able to ac­cept card pay­ments, ir­re­spec­tive of size or ma­tu­rity.

Yoco chief ex­ec­u­tive and co­founder Katlego Maphai said: “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.”

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,” said Maphai.

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 and 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,” said 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 last year, the com­pany an­nounced it had ac­quired more than 5 000 SME mer­chants, grow­ing 10 times in a year. To­day, the com­pany is proud to an­nounce that it has reached the mile­stone of 10 000 mer­chants ac­quired.

The com­pany has dou­bled in size since the be­gin­ning of the year and is now adding more than 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. More than 72 per­cent 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,” said Maphai.

Al­most 80 per­cent of con­sumer pay­ments in South Africa are still made in cash. By digi­tis­ing pay­ments, Yoco wants to drive the for­mal­i­sa­tion of SMEs and move into of­fer­ing com­pli­men­tary ser­vices driven by soft­ware, ul­ti­mately be­com­ing the op­er­at­ing sys­tem for the con­tem­po­rary SME. Yoco’s vi­sion is to be the first real pan-African player ser­vic­ing the un­tapped SME seg­ments.

Yoco was re­cently se­lected as one of the top 250 most promis­ing fintech com­pa­nies in the world, by global re­search com­pany CB In­sights. – See Busi­ness Re­port on­line


Yoco card read­ers can be used to ac­cept pay­ments both at the store and on the go.


Katlego Maphai pi­o­neered a card pay­ment so­lu­tion.

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