Yoco has launched the new Yoco Neo Touch card machine offering unlimited 4G data and all-day battery life.
All business owners have to do to start transacting immediately once they have the small, blue device is sign up on the Yoco app to process instant payments and invoices. It costs R899.
Founded by Katlego Maphai (CEO), Carl Wazen (chief business officer), Bradley Wattrus (chief financial officer) and Lungisa Matshoba (chief technology officer) in 2013, the idea behind Yoco is to “address the pain points that small businesses face when trying to get a card machine”. These have historically been very expensive to buy and operate, creating opportunities for fintech start-ups like Yoco and rival iKhokha.
In 2021, Yoco raised US$83-million (about R1.6-billion at the time of this publication) from top investors in a series-C funding round. The investment brought the total funds raised by Yoco to $107-million (about R2-billion) and were earmarked for accelerating the development of its financial ecosystem — which includes online and in-store payments, business software and capital — and expanding its market presence beyond South Africa.
New investors included Dragoneer Investment Group, Breyer Capital, HOF Capital, The Raba Partnership, 4DX Ventures, TO Ventures, Futuregrowth, and several current and former executives from global technology companies such as Coinbase, Revolut, Spotify and Gojek.
Maphai said at the time that the investment round would “unlock capacity for us to accelerate product development for our merchants and continue on our growth trajectory in South Africa and beyond”.
350 000 merchants
Two years later, the company has 350 000 merchants who use Yoco to process payments quickly and effortlessly, with a growth in sales of 90% in 2022. Consumer behaviour shows a shift away from cash and businesses have to rapidly adapt to the change.
“This year we pivoted from adolescence to adulthood,” said Wazen at a launch event for the Yoco Neo late last week. “Growth is sometimes uncomfortable, but we saw that discomfort as a catalyst. Our merchants in the small business community – our primary market – have reported transactions growing by 16% year on year since 2022, outpacing inflation.
The team behind Yoco tries to push boundaries and innovate to make digital transactions easier but safer, which means constant redesigning behind the scenes, said Wattrus. “We have a mantra we try to apply consistently: it’s all about the people, the process and the technology.”
The new Neo was built specifically for small South African businesses. “Some small business owners work long hours, five or six days a week, as one-man bands. They don’t have time to deal with drama; the machine had to work smoothly and ensure ease of payments when they are dealing with over 200 transactions a day,” he said.
The machine was designed by a team of engineers in Cape Town. Group product marketer Berno Potgieter said the first step in the new design was to make 3D prototypes to perfect the shape and size, which were tested over three months.
“The new shape also allows us to save on hardware costs,” he said. Components were secured from partners in China – similar to the kind used by Huawei – because of their cost effectiveness. The device runs Android 13 and offers Wi-Fi and 4G connectivity.
Potgieter said the device has no swipe mechanism – meaning consumers cannot swipe their bank cards – as this is where most security breaches occur. Instead, they must insert the card, or tap it using the in-built near-field communication technology. Permission to build the Neo without the swipe function took months of lobbying with the Payment Association of South Africa. — (c) 2023 NewsCentral Media
