We were fortunate enough to attend the second Startup Grind Cape Town event of the year, headlined by Katlego Maphai.
The Yoco co-founder tackled a variety of topics during the event, but we managed to interview him, covering rivals, Yoco’s future plans and more.
No ad to show here.
Who are their rivals? Is it Snapscan?
“We are sort of… mutually cooperating companies in the ecosystem,” he says of Snapscan. “If you look at Snapscan, they’ve had to acquire merchants and the real drive from them now is getting consumers to pay. We’re strictly a merchant company.”
Maphai says that you could potentially see a collaboration between the two firms. Confirmation of future plans, then? Nope.
“I’m just saying there’s a possibility for that to happen, because we’re playing on both sides of the market,” he explains.
If Snapscan isn’t their rival, who is?
“Obviously, you have the traditional players, but they really focus on large and medium-sized businesses. And then you have third parties… the likes of iKhokha, ZipZap. The traditional players also release… the Absa Pebble, the Nedbank PocketPOS… But in the end, our focus on software and data analytics… is allowing us to sort of occupy a little bit of our own space.”
Insights via data analytics
The emphasis on analytics means that merchants can gain a few interesting insights.
“You must understand for these businesses that never accepted a card before, they’ve gone from paper to… fully digital. And some of the things they can see now… Transaction volume patterns over the course of the day, over the course of the week. So I remember one merchant being able to see this data and knowing, predicting when volumes would go up and they could staff according to this level.”
Maphai adds that another insight they’re able to deliver is the number of foreign cards that have been processed, giving an idea of how many foreigners are visiting the merchant’s location.
Most interesting user case for Yoco?
“There was an artist in Vereeniging. She spent a week doing a back-and-forth, asking lots of questions… I’ll never forget, we eventually got the reader to her and her first transaction was for R50 000, for selling a piece of artwork,” the Yoco co-founder adds, saying it helped the firm realise that every merchant counts.
The firm has enjoyed plenty of success, so you would assume that they’d branch out of South Africa.
“Our focus is going to be on green field, emerging markets, where we wanna make a dent. We want to be market makers, not market participants. And there’s a lot to be done on the African continent. We’re also really interested in the Middle East… we’ve worked there before, we’ve got good connections there,” Maphai elaborates.
“So, that’s going to be the focus. In terms of where exactly, I see us doing stuff, potentially in East Africa, West Africa potentially, but we really need to manage our resources.”
What about those without cards?
Of course, the African continent plays host to millions of unbanked people without cards, so could we see Yoco branching into the mobile wallet arena?
“We’ll definitely be doing that… In the end, we wanna support multiple acceptance types through our point of sale, so business owners aren’t having to reconcile various things and wasting time,” Maphai explains, adding that he wants to get business owners away from having to do administrative tasks.
“Mobile money is key. The challenge with mobile money is that it hasn’t made the evolution into an interoperable service. So it’s very country-based, and in that sense, there’s still a long way to go,” he answers. Maphai also foresees cards taking over from mobile money in some markets.
Tackling the question of internet connection quality
Yoco obviously requires an internet connection to run, but Maphai says they are set to run an interesting trial to help merchants out.
“So, dead zones and quality, we’re starting to run a pilot with that…” he answers.
Key fintech trends for 2017?
Maphai has previously expressed his thoughts on fintech, as part of a panel discussion with editor Graham van der Made. But what does he expect to be big this year?
“In the context of South Africa, payments will continue to be quite a big draw card. Lending… you’ll start seeing players really starting to build and develop. You also might start seeing some partnerships within the ecosystem, which is quite exciting.”
As for African fintech trends at large, the Yoco co-founder says that remittances, Blockchain and consumer lending are expected to trend.
“You might start seeing some adoption of Blockchain stuff… purely because it’s interoperable, whereas mobile money is not. Consumer lending will continue to be a big thing,” he answers.
Maphai adds that the “electronification of money” is a global trend to watch as well, saying that it will open the door for more fintech companies to emerge.
Advice for aspiring entrepreneurs?
The Yoco co-founder called on wannabe entrepreneurs to be ambitious, but “not in a crude ‘let’s make money’ type of way”.
“Be ambitious as in… think about your products and whatever you’re doing beyond your immediate context… Think of it in a multi-national context. And in order to do that, you need to look beyond your immediate resources and you need to start building bridges to other ecosystems, to other networks,” he continues.
How to treat staff?
Maphai touched on the treatment of staff in the talk itself, expanding on it in our interview.
“Just treat people like adults, really. This whole… ‘this is when you come to work, this is when you leave’… (treating) vacation as this gift the company is giving you and not seeing it as an opportunity for your team to recharge. These are very subtle things,” Maphai says of how not to treat employees.
He adds that giving your team access to quality tools, such as “fast internet, a comfortable chair, a good desk”, suggests that you’re expecting them to be productive.
“The moment you go cheap on these things, you’re sending a message and you can’t be surprised when people are not motivated, or seeing this [the job – ed] as a very transactional thing.”
Rewarding startup staff
What does Maphai think of rewarding staff of successful startups who have been with the firm since day one?
“We designed our own staff incentive scheme, which is equity based…” Maphai adds.
He notes that employees who were with the company since the beginning have seen the value of their equity climb.
“What’s also been interesting is… using this (equity) as a filter. We want people who want equity, and people who want equity know they can make a contribution to the company, they can make a dent,” the Yoco representative continues.