Yoco brings SA SMEs into digital economy

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 11 Jul 2023

Yoco, an African payments and software firm, says its active merchants saw a 16% year-on-year (YOY) surge in transaction volumes, when comparing the first half of 2022 to the first half of 2023.

The company has now reached a customer base of 350 000 local merchants, as demand for its payment devices grows across SA.

It was founded by entrepreneurs Katlego Maphai, Carl Wazen, Lungisa Matshoba and Bradley Wattrus in 2015. Yoco builds tools and financial services to help small and medium enterprises (SMEs) get paid, run their business better and accept payments from customers.

The fintech company says by integrating its technology with Mastercard Payment Gateway Services, it has opened up commerce in SA by enabling digital access, to allow entrepreneurs to get paid, run their businesses and further scale their companies.

“Since inception, we've really opened up payment acceptance for small business in South Africa, which previously relied on cash payments,” says Yoco CTO Matshoba.

“Measuring the performance of Yoco customers who traded every month of the first half of 2022, and the first half of 2023, we found there has been 16% YOY surge in transaction volume.

“This far surpasses a 6% to 8% inflation-related surge, and therefore means our customers grew their businesses despite extraordinary challenges. We also saw more international cards being used in H1 of 2023, indicating a return of foreign tourists.”

In 2018, Yoco introduced Yoco Capital, a flexible cash advance service that allows businesses to access a cash advance of between R2 500 and R75 000, without the need for security.

According to Matshoba, the service has now disbursed over R1.9 billion in capital advance to business customers needing extra cash to scale their service.

“Yoco Capital is a vital alternative to traditional business funding – something that is typically out of reach for many of our merchants. By democratising small business financing, we empower small business owners and further their chances of not only succeeding but thriving.

“The local SME market – which comprises millions of small and medium businesses across the country – is still fraught with barriers that impede success and growth. Difficulty accessing funding, poor infrastructure and a lack of training are some challenges small businesses face,” he adds.

Yoco merchants are able to apply for the capital advance in five minutes, via the mobile app, and get instant approval. Paying off the cash advance is done through a small percentage deduction from every sale made through the Yoco card machine, Matshoba explains.

Over the years, Yoco has added new functionality to its mobile app. “These features include adding product catalogues, staff switching, online payments, tracking of payments, automatic daily recons and instant payout. This year, we will be adding more features to the app.”