Challenger to Watch 2019: Yoco

For being ‘for the challengers’


The card payments market in South Africa was traditionally well-regulated and organised around the major institutions through their central interbank settlement platform – Bankserv. In the 2017 financial year it cleared R290Bn ($20.1Bn) worth of credit card authorisations. The card payment offering traditionally focussed on larger and medium sized businesses that are predictable and easier to reach.

Prior to 2015, if you were a startup, trying to establish your business and take card payments, you were at the mercy of this prevailing system which is dominated by the big financial institutions. To this day, as a small merchant applying for a payments device, you might wait up to three weeks for a bank representative to call back, let alone waste your precious time jumping through approval processes and filling in unnecessary paperwork.

The traditional infrastructure is quite a contradiction to what the country needs: more entrepreneurs who can start-up and scale quickly. In fact this is stated as part of the country’s vision in its National Development Plan: “we are traders, we are inventors, we are workers, we create companies, we set up stalls”.

Enter Yoco, who saw the bigger economic picture from the outset, seeing small business commerce as a crucial part of the equation of South Africa’s national success. Co-founder & CEO Katlego Maphai says "The key to driving the future in this country, and the continent, is through small business. They drive the majority of employment and build the economy."

Credit: Yoco GIF

Credit: Yoco GIF

In October 2013 Yoco began its journey to build a new way to accept a credit card through a mobile phone without the need for a traditional card point-of-sale system. Four entrepreneurs formed Yoco and decided to develop their own prototype working with about 500 merchants to deeply understand user interactions and build a bottom-up support model. Yoco believes that entrepreneurs have big ambitions for their businesses but never get the attention and support this deserves. Through this effort it turned the process of getting a card machine from weeks to less than 10 minutes, with no lock-in contracts and almost zero paperwork. In its first year Yoco processed R13-million in transactions (about $1m) and because of this intense focus on merchant needs, people love Yoco - it’s not often you hear customers praise their financial services company.

As a brand, Yoco is very much a Democratiser, representing the entrepreneur who is full of heart and hustle, but frustrated with a system that limits, excludes and protracts, a system built for the establishment not for a startup mentality.

Credit: Yoco Facebook

Credit: Yoco Facebook

Yoco has an express intent to challenge and push boundaries of how commerce works in favour of the entrepreneur.

Yoco doubled from 17,000 to 34,000 business customers in 2018 and wants to continue the trend of doubling in 2019. Even more impressive is that 75% of this base had never accepted card payments before, meaning that Yoco is effectively building its own market which it estimates to be circa 1 million small businesses in South Africa alone.

Leveraging its cloud-based model and powerful in-house software platform, that analyses sales  payment and revenue data, Yoco aims to open up new opportunities for merchant growth. In addition, partnerships with cloud-based accounting tools like Xero and others are extending Yoco’s capability to include business automation as a proposition, freeing up time for the small business owner to focus on customer engagement and growth. To further support this, Yoco has recently launched Yoco Capital, providing cash advances to small business owners.

Yoco has an express intent to challenge and push boundaries of how commerce works in favour of the entrepreneur. As it grows from its own startup origins, it’s committed to creating broad access to simple tools that make it easier for anyone to start, run and grow their business.

David Blyth is founder of Delta Victor Bravo, who represent eatbigfish in Africa.