In South Africa, where cash still reigns and there are few signs of merchants and consumers moving away from paper and coin payments, small- and medium-sized businesses (SMBs) face several payments dilemmas. Many are unable to accept credit cards, and many cannot afford the mainstream point of sale (POS) terminals and solutions — which can also take a very long time to procure.
Face2Face Africa says part of the problem is inertia: most consumers are just used to paying cash. When only some consumers are capable of making non-cash payments, and only some merchants are capable of accepting them, wider adoption can seem like a distant dream. At the same time, investors are missing opportunities because they have no means of accepting digital payments in an age of cash-free business dealings.
That’s why South African FinTech company Yoco has made it its mission to improve things for African businesses, large and small.
Yoco has launched two levels of payments solutions since its inception and beta phase in 2014 and subsequent launch in 2015, starting with a Square-like card reader. Indeed, the FinTech’s mobile POS (mPOS) was inspired by Square, which Yoco founder Katlego Maphai first encountered while visiting San Francisco shortly before starting to work on the Yoco solution.
“The lightbulbs went off,” Maphai told Forbes. “Here was a small business with a good product, nothing much else, and they were running their business with their phone.”
The startup said 72 percent of its customers had not previously been able to accept card payments. In the first year, it processed approximately $1 million USD in credit card payments during a beta phase featuring 500 merchants, Maphai told Forbes.
Yoco has most recently added a new POS app it is giving to SMBs for free if they are already using its mPOS solution. More than 14,000 merchants are receiving the POS app upgrade, a solution which runs on both phones and tablets and is designed to help merchants manage their entire business, not just accept payments.
The app allows SMBs to track sales, generate data-driven insights and track staff performance, with options to incentivize employees or simply furnish them with better tip amounts by way of an on-device prompt at the point of transaction.
In South Africa, SMBs really drive the economy — and it turns out they’re also leading the way for acceptance of non-cash payments, beginning with credit cards. It was only after the plumbers and artisans embraced mPOS that bars and restaurants also began to embrace the technology.
mPOS was never envisioned to be the right product for food and hospitality, but with so many establishments previously unable to take card payments, Maphai has seen it become a game-changer. At least, that’s what Yoco has found, with the majority of its customers operating in the food and drink industries. The startup’s next goal is to begin serving retail SMBs on a larger scale.
The FinTech startup says it’s adding 1,200 merchants per month, according to Forbes reports, many of them via word-of-mouth. The company increased its merchant base tenfold in just the first year of business, a testament to just how much the solution was — and is — needed.
Compared to the credit card terminal application process that was already in place, which took several weeks to complete, Yoco furnishes a solution within two days so merchants can get up and running.
Yoco shares a philosophy with many POS and mPOS solutions around the world, believing merchants should be empowered to focus on being merchants, providing a good product and running their business well. The right POS system, Yoco or otherwise, can really make that happen.