Navigating the Price War: How iKhokha and Yoco Can Redefine Their USP with Practical, Market-Specific Design

In South Africa’s rapidly evolving fintech landscape, portable card machines have become indispensable tools for small and medium-sized enterprises (SMEs). Two major players, iKhokha and Yoco, dominate In South Africa’s thriving fintech landscape, portable card machines have become essential for businesses of all sizes, with iKhokha and Yoco leading the charge by serving over 200,000 merchants. Yet, their competition has spiralled into a price war, with transaction fees dropping to 2.5% (iKhokha) and 2.7% (Yoco, excluding VAT) and hardware costs as low as R749 (Yoco Go Starter) and R799 (iKhokha Flyer Lite). While this strategy attracts cost-conscious SMEs, it risks undermining profitability and brand value. As a marketing manager, I’d argue that design—far more critical than most realise—offers a path out of this race to the bottom. Rather than chasing Apple-esque “sexy” aesthetics, I’d focus on practical, market-tailored designs that cater to both medium and small businesses, emphasising durability, ease of use, and dirt resistance over mere style. Additionally, I’d challenge the fintech norm by advocating for better rates for emerging entrepreneurs and adding value through tools like an auto bookkeeping system, where small businesses need it most. This article explores how a nuanced design approach and added services can redefine iKhokha and Yoco’s USP and foster sustainable growth.

The Overlooked Power of Design

Design is often underestimated, yet it shapes user experience and brand perception more than price alone. Rory Sutherland’s insight—that the opposite of a good idea can also be a good idea—resonates here. While a sleek, Apple-inspired device might appeal to medium-sized businesses, it’s not the universal solution. Medium enterprises value smart, professional-looking tools that enhance their brand, but small businesses—often price-sensitive and operating in rugged environments—need practicality over glamour. A well-designed device should balance aesthetics with functionality, offering durability, dirt resistance, and remarkable ease of use to meet these diverse needs. This approach shifts the focus from price wars to value creation, building loyalty among merchants who rely on reliable, user-friendly tools.

Designing for Medium-Sized Businesses

For medium-sized businesses, a smart, polished design can elevate their professional image. I’d propose the following enhancements:

1. Sleek Yet Functional Hardware: Yoco’s Khumo (R1,299) and Neo Touch (R999) already lean toward modern design, but I’d refine them with a matte finish that resists fingerprints and a compact, ergonomic shape. iKhokha’s Flyer (R1,499) could adopt a similar upgrade, with a customisable faceplate to reflect the merchant’s branding, appealing to cafes or boutiques.
2. Advanced Features: Integrate one-touch tipping, multi-currency support, and high-resolution receipt printing. These features would position the device as a business tool, not just a payment processor, aligning with the needs of growing enterprises.
3. Integrated Analytics: Pair the machine with an app offering detailed sales dashboards and inventory insights, marketed as a “growth partner” for medium businesses expanding their operations.

This design narrative would position the product as a premium, smart investment, justifying a slightly higher upfront cost (e.g., R1,299–R1,499) with long-term value.

Catering to Small Businesses with Practical Design

Small businesses, especially in markets or rural areas, face unique challenges—price sensitivity, harsh conditions, and limited tech skills. Here, practicality trumps aesthetics:

1. Durability and Dirt Resistance: The device should feature a rugged casing to withstand dust and heat, with a non-porous, dark-coloured surface (e.g., matte black or navy) that hides dirt. iKhokha’s Flyer Lite could be reimagined with reinforced edges, while Yoco’s Go could add a shock-absorbent base, ideal for mobile vendors.
2. Remarkable Ease of Use: Simplify the interface with large, tactile buttons and a bright, intuitive touchscreen. Include a quick-start guide printed on the device itself, ensuring even first-time users can process payments in under a minute.
3. Extended Battery Life: Offer all-day battery performance (e.g., 12+ hours), critical for market traders or food stalls, reducing downtime and boosting reliability.
4. Affordable Pricing with Value: Keep entry-level costs low (e.g., R799–R999) but highlight the device’s longevity and low maintenance, appealing to price-sensitive small merchants.

Marketing would frame this as “built for the hustle”—a tool that survives the grind while keeping payments simple and secure.

Challenging Fintech Norms: Rates and Added Value for Emerging Entrepreneurs

The fintech debate often favours big retailers with negotiated bulk rates, leaving small startups to bear higher fees. This imbalance is unjust. Emerging entrepreneurs—often the lifeblood of South Africa’s economy—deserve support to grow. I’d advocate for tiered pricing and added value:

• Introductory Rates: Offer a 6-month period of reduced fees (e.g., 2% for iKhokha, 2.2% for Yoco) for businesses under six months old, encouraging adoption.
• Loyalty Incentives: After a year, provide a loyalty discount (e.g., 0.2% off standard rates) for consistent use, fostering retention.
• Auto Bookkeeping System: Introduce a free or low-cost auto bookkeeping feature in the app, automatically categorising transactions, generating VAT-compliant reports, and syncing with tools like Xero or Sage. This saves small businesses time and money on accounting, addressing a critical pain point and adding tangible value where they need it most.
• Education Bundle: Include free app-based training on financial management, leveling the playing field for small operators.

This strategy would position iKhokha or Yoco as champions of grassroots entrepreneurship, differentiating them from competitors focused on large-scale clients.

Crafting the Marketing Narrative

The marketing approach would highlight design’s practical value and inclusive services:

• Brand Positioning: iKhokha could be “the hustle’s backbone,” emphasising rugged, user-friendly devices and bookkeeping support. Yoco might be “smart growth for every business,” blending sleek design with startup tools.
• Campaigns: Launch ads showing diverse merchants—market vendors using durable machines, medium businesses leveraging analytics, and startups benefiting from auto bookkeeping—paired with slogans like “Designed to Last, Built to Grow” (iKhokha) or “Simplicity Meets Success” (Yoco).
• Community Focus: Partner with local markets and startup incubators to distribute devices, offering demos on durability, ease of use, and bookkeeping features. Highlight real stories of entrepreneurs thriving with better rates and tools.
• Value Over Price: Promote bundles (e.g., “Starter Kit” at R999 with app access, “Growth Kit” at R1,499 with analytics and bookkeeping) to shift focus from individual costs to holistic benefits.

Avoiding the Price Trap

To escape the price war, I’d phase out aggressive fee cuts, instead offering transparent pricing (no hidden costs, as both brands currently do) and emphasising design longevity and added services. Enhanced customer support—e.g., iKhokha’s prompt service or Yoco’s 24/7 help—would be marketed as part of the package, reinforcing the premium experience.

Conclusion

The price war between iKhokha and Yoco threatens to commoditise their innovative payment solutions. By prioritising practical design—smart and professional for medium businesses, durable and user-friendly for small ones—and adding value through an auto bookkeeping system, they can redefine their USP. Coupled with fairer rates for emerging entrepreneurs, this strategy moves beyond price competition to build a loyal customer base. In South Africa’s dynamic market, design, equity, and practical tools can drive iKhokha and Yoco toward sustainable success, empowering merchants of all sizes to thrive.