While the Covid pandemic wreaked havoc in most industries, some companies saw huge growth potential as consumers pivoted away from anything requiring contact. Payment solutions provider Yoco was one.

Having launched around 2016, the company had 36,000 national clients by February 2019 and that number has grown exponentially to around 350,000 small business owners, of which about 150,000 have been actively using their Yoco devices monthly over the past year.

Vice president of commercial at Yoco, Matthew Brownell, says the company saw unbelievable growth during the pandemic years. 

“As soon as we were out of heavy lockdown, there was a huge migration from cash to card. There was a massive upswing from cash to contactless payments and an explosion in card adoption. Any fintech company using online payments benefited from the consumer behaviour shift,” he says.

Innovation

As part of a move towards combating card fraud, Yoco has launched the Neo Touch – a proudly South African innovation which can process both insert and tap transactions with high-speed approval. It accepts a full range of payment methods including Amex, Apple, Google and Samsung Pay.

“The team took this opportunity to completely redefine what a card machine looks and feels like,” says Lungisa Matshoba, chief technology officer at Yoco, adding that in an environment where business owners are facing challenges such as power cuts and inflation at unprecedented levels, getting paid should not be a challenge too.

Yoco is the first payments company to receive permission from the Payments Association of South Africa to remove magstripe functionality. 

By removing swipe-to-pay functionality, Yoco has introduced an additional layer of security to protect both customers and consumers, while beneficially bringing down the production cost of the hardware. The swipe method of paying, which previously only accounted for 2% of Yoco’s total transactions, has also historically resulted in high fraud rates.

The Neo Touch is equipped with unlimited 4G data, Wi-Fi capabilities and an all-day battery to ensure that business owners are always connected and able to take payments.

Once fully charged, the battery can handle up to 400 transactions before it needs to be recharged. At launch, the card machine comes bundled with a free charging stand allowing customers to charge the device when it’s not in use, on their countertops.

The price point is attractive, launching at R899, including the charging stand, compared to the almost R3,000 once-off cost for a Yoco Pro device in 2017.

However, transaction costs have not changed, and start at 2.95%, with rates automatically adjusted downwards as the business grows, which allows for a sell-more-pay-less model for businesses doing under R100,000 in card transactions a month. Larger businesses can get a customised rate from the outset.

R2-billion worth of cash advances processed

In October 2018, Yoco partnered with Retail Capital and Lululend to offer clients access to finance. To date, Yoco clients have accessed just over R1.9-billion worth of finance.

“The finance option is extremely popular with our clients, and that’s because it’s so simple.

“You literally open the Yoco app and there is a pre-approved amount of money available to you within 24 hours of application. We already have access to your data and the amount is pre-approved so there is little to no paperwork, and the repayments are structured as a percentage of the payments processed on your Yoco device,” Brownell explains.

This means every time a customer pays using your Yoco device, a portion of the transaction goes towards repaying your cash advance. 

Brownell says there is a total cost of capital that is disclosed upfront and because there is no lending term – the more transactions you process, the quicker the loan is paid off – customers are unaffected by interest rate increases. DM