Yoco taps into promising SME market

YOCO, a South African point of sale (POS) payments company, has signed up 8 000 South African merchants and processes more than R1 billion in transactions a year.

The Cape Town-based startup addresses the need of small and medium-sized enterprises (SMEs) to accept card payments. The SME market is expensive and difficult to serve and has mostly been untapped by traditional financial services companies.

James Kramer, head of data and risk at Yoco, said the company would launch an office in Johannesburg to expand its national footprint before year-end.

He said the company was also looking to spreading to other African countries.

“We are exploring different African markets, but the approach there could potentially be different from the approach we took in South Africa.”

Kramer said the company’s target was 20 000 merchants by year-end with a month-to-month growth rate of 900 new signings. “All our initiatives, such as launching our Johannesburg office, will help us reach our target of 20 000 merchants in 2017.”

He said Yoco was on the verge of launching a pro device, which supported near-field communication (NFC) to allow users to tap-and-pay rather than swiping their cards. “Tap-and-pay is quite effective and has proved quite popular with consumers.”

Yoco offers two chip-and-PIN card readers, which attach to a cellphone or tablet for a one-off purchase fee. Thereafter, it charges per transaction, with no monthly rentals. It also offers integrated business portal and insights to transactions for its merchants.

Kramer said the use of their POS device coupled with their business portal had resulted in some merchants reporting an improvement in sales.