Cape Town – As businesses continue to evolve, so do methods of payment, hence the establishment of financial platforms such as Yoco, a fintech company for small businesses.
Its introduction into the market has seen small businesses in South Africa getting paid in-store, online, and on the go.
African Insider spoke to Yoco’s vice president for commercial, Matt Brownell, and he made remarkable revelations.
Formed seven years ago, Yoco is not just an ordinary South African tech company, as it has released a number of products and solutions to drive growth in the small business sector.
“Yoco started in 2014 to enable people to thrive. The businesses in the Yoco community are vibrant, passionate and move things forward. As we keep building for the future, we want to make sure that we look and feel like a part of this community.
“Our core drive is to open commerce for all. South Africa is the most unequal country globally, driven by entrenched barriers that limit participation in the economy by everyday people.
“The ability to participate formally in commerce is critical, and this is where we see the role of payment. Irrespective of the method, every transaction, and trade in the economy needs a payment.
“And this is why Yoco started – to bring easy access to payments to all those that wish to participate. Payments are the blood of the economy and a big part of how we enable people to thrive,” Brownell said.
He said that Yoco didn’t start as an idea but it began with the meeting of diverse minds.
“A diverse group of friends from different walks of life and on the same wavelength came together. All tired of the status quo in an unequal country, they gathered with a common purpose to remove barriers, level the playing field, and enable small businesses to thrive. This group is made up of Chief Executive Officer Katlego Maphai, Chief Technology Officer Lungisa Matshoba, Chief Financial Officer Bradley Wattrus, and Chief Business Officer Carl Wazen,” said Brownell.
He went down memory lane, revealing a time when Katlego visited San Francisco and witnessed how Square, the US pioneer in the mobile point of sale space, was empowering small business owners. That was the time when he (Katlego) had a lightbulb moment, as he came to realise the potential that this could have for financial inclusion for small traders in South Africa – something that the country was desperately missing.
“The tipping point came in 2012 when the founders all came together and started to size the problem. They noticed the red tape surrounding product structures that prevent many merchants from access to affordable and efficient electronic payments.
“Once Yoco received its payments licence in 2014, the founders closed a seed round to start building tools and services to help small businesses get paid, run their business better, and grow. To date, the Yoco platform has become the preferred digital payments’ solution for over 150 000 small and micro merchants across South Africa, processing more than US$1billion in payments per year. This is just the beginning,” said Brownell.
Millions of businesses in South Africa lacked access to electronic payments, despite more than three-quarters of adult consumers carrying a card, he said.
“When we started to plunge deeper into the problem, we found that traditional banks made it challenging and a privilege for businesses to get a card machine. Traditional POS systems come with high monthly and transaction fees and appeal to mainly the established business operation.
‘Our offering is unique’
“We believe our offering is unique. Largely due to the types of products that we are able to offer, the speed at which we are able to do it, and the cost at which we can do it. What Yoco has been able to do through the use of our technology platform is drive down the cost to provide financial services to the underserved market sector of small businesses, regardless of where they are,” said Brownell.
He said entrepreneurs are seeing a growing demand for cashless payments. However, due to the lack of accessibility to payment solutions, and the red tape surrounding product structures such as complicated application forms, lengthy processes, and the requirement to have a bank account, many entrepreneurs are excluded from earning opportunities.
“This is why we have partnered with over 700 retail stores nationwide, to allow more merchants access to affordable and efficient electronic card machines and financial tools to start and run their businesses.
“By providing easy access to affordable products and payment solutions, Yoco is able to bridge this gap through their one-of-a-kind retail partnerships which allow merchants to walk into hundreds of stores, anywhere, to get a card machine, thereby increasing growth and profitability prospects for them and the economy,” Brownell said.
Expansion into Africa and Middle East
He said there are over six million small businesses in South Africa and over 100 million across the Middle East and Africa that still transact only in cash, which is why Yoco wants to deepen its market presence in South Africa and expand into Africa and the Middle East region over the next two years.
“Though the shift away from cash has been on the cards for years, nothing has accelerated a move to card and digital payments quite like the Covid-19 pandemic and businesses have to rapidly adapt to this change. This presents a huge opportunity for the digital payments industry, and it is our mission to support that transition.
“We want to deepen our market presence in South Africa and expand into Africa and the Middle East region over the next two years.
“With over 150 000 businesses on our platform, the goal is to reach at least a million merchants within the next four years,” said Brownell.
He said that Yoco currently has 200 people employed globally and the aim “is to grow this stuff complement to more than 400 by the end of 2022”.
Compiled by Reginald Nhlapo