Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

FinTech

Fintech Startup Yoco Turns Smartphones Into POS Terminals

Article Image
Fintech startups are lighting up Sub-Saharan Africa these days. While OlyCash's ecosystem is helping "unbanked" Ugandan consumers pay cash for remote purchase, South Africa's Yoco is going a different route by enabling retailers that don't have card-reading terminals to accept card payments.

The Yoco solution comes in the shape of a simple card reader and an app for smartphones and tablets. The merchant will choose one of two versions of card readers depending on the nature of its business and scale. The cheaper version costs R1,799 (US$119), better suited to pop-up shops or on-the-go businesses with its focus on long battery life. The more expensive version is more suitable for brick-and-mortar shops, focusing on its processing power -- it costs R2,799 ($185). Both versions of machines can be paid for in weekly installments of up to 16 weeks.

The merchant also needs to install the Yoco app on a smartphone or tablet, then pair the mobile device with the card reader via Bluetooth. In addition to accepting card payments, the solution can also send paperless receipts to consumers' mobile phones, as well as generate dashboards for the merchants.

Yoco makes money by charging a fee for every transaction. The rate of the fee varies from 2.95% for monthly turnovers under R20,000 ($1,320) to 2.60% for monthly turnovers up to R100,000 ($6,600). Custom fee rates will be agreed with merchants of monthly turnover above R100,000.

The merchant fee is not low. It is at least on par with a typical credit card fee charged by mainstream processing platforms, and Yoco is charging merchants the same rate for debit card transactions, which normally would be much lower. But Yoco's key selling points rest on its lower total cost of ownership and the increased business opportunities. The card readers cost less than standard pin-and-chip terminals and there is no on-going monthly charge after the card reader is acquired. More importantly, Yoco's affordable solution offers the opportunity to the mom-and-pop shops to receive customers who prefer to pay with cards. According to Yoco, among the 27,000 merchants signed up to its solution, around 75% of them, or about 20,000, had never received card payment before.

Yoco was founded in 2015 by four local entrepreneurs, and has been supported by venture capital. It announced its Series B funding on September 7 from investors including Partech, FMO, Quona Capital, Velocity Capital and Orange Digital Ventures Africa (Orange Groupís venture capital investment fund for Africa). The total amount of investment received by the company has reached US$23 million.

ó Wei Shi, Site Editor, Connecting Africa

Innovation hub

Story

Hot startup of the month: Pan-African fintech KamaPay

This month's hot startup is pan-African fintech KamaPay, which helps individuals and businesses make cross-border payments on the continent.

Story

Afretec awards $3.3M in grants to African research teams

The African Engineering and Technology Network (Afretec) has awarded grants worth $300,000 each to 11 university research teams across Africa to advance digital technologies.

More Innovation hub

Latest video

More videos

Sponsored video

More videos

Industry announcements

More Industry announcements

Flash poll

All polls

Africa Tech Perspectives

Story

Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

Story

Challenges and opportunities for women's tech careers

A new survey reveals that COVID-19, the cost-of-living crisis, skills shortages and a lack of mentorship have negatively affected women's career development over the past two years.

Story

Survey: Opportunities for Women in Tech

Take our new survey for women across Asia, Europe and Africa looking at the biggest challenges and opportunities for women-led enterprises and trends in tech careers for women.

More AfricaCom perspectives

Upcoming events

London Tech Week
June 13-16, 2023
Queen Elizabeth II Centre, Broad Sanctuary, London SW1P 3EE
Cybertech Africa 2023
August 1-2, 2023
Kigali Convention Center, Kigali, Rwanda
Africa Tech Festival, Home of AfricaCom and AfricaTech
November 13-16, 2023
CTICC, Cape Town
More Upcoming events

Guest Perspectives

Story

Omdia View: February 2023

By Omdia Analysts

In February 2023 key events in the Middle East and Africa included a major Internet project for Africa's underserved by Liquid Intelligent Technologies and Microsoft as well as a 5G launch in Tanzania – that and more in this month's Omdia View.

Story

Omdia View: July 2022

By Omdia Analysts

Kenya and Zambia move towards 5G with new spectrum allocations while Tunisie Telecom plans to shut down its 3G network - that and more in this month's Omdia View.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

Like us on Facebook

Newsletter Sign Up


Sign Up