When it comes to contributing to the economy, there is nothing small about SMBs.
In fact, small businesses represent 99.7 percent of all employer firms in the U.S., and employ about half of all private sector employees.
Those are just some of the eye-popping statistics shared by Eugene DeSilva, group head within the Global Commercial Products group at MasterCard. As MasterCard’s lead in global development and commercialization for commercial products that serve SMBs, DeSilva knows all about the pain points that SMBs face in a competitive market.
From a lack of cash at critical times, to inadequate accounting and controls to out of control growth, SMBs face unique circumstances as they try to grow and thrive.
But what tools can help SMBs overcome these difficulties, and why is the success of SMBs integral to the economy at large? PYMNTS.com spoke with DeSilva to find out, and to learn why he views small businesses as catalysts of innovation.
According to DeSilva, small businesses often provide the innovation and product breakthroughs that change industries around the world. In some ways, he believes they actually have a leg up on bigger businesses.
“Small business are more nimble, opportunistic and responsive to change than their larger counterparts,” DeSilva said. “They can more quickly act on new technological breakthroughs and marketplace needs, and create products and services that meet those needs.
They are willing to take the risk of breaking with the status quo to start something new.”
That said, SMBs face no shortage of challenges in their quest to keep up with larger businesses that sometimes dominate the market. For example, DeSilva highlights one often-used statistic that reveals that 80 percent of small businesses globally are “underbanked:” something he attributes to problems with banking infrastructure in many countries.
“Many small businesses are unbanked around the world because the general banking systems of individual countries do not have access to sufficient data that would enable them to comfortable provide lending products to startup or entrepreneurial companies,” he said. “This limits their access to capital and prevents timely expansion as demand heats up, and ultimately limits, economic growth.”
That lack of access to capital can lead to one of the most common problems faced by SMBs: a lack of cash, or difficult managing cash flows at critical times. It’s an issue that can stifle growth and innovation in its tracks, but one DeSilva believed can be mitigated by a simple tool that many consumers take for granted: payments cards.
In DeSilva’s words, such cards can provide “quick and easy capital for emergency needs or seasonal downturns,” resulting in improved cash flow. Payments cards can also allow for purchases to be paid for over time, and allows for the budgeting of funds as well.
Finally, DeSilva also notes that corporate cards can help SMBs to better manage and record their spending, and can help ease owners into empowering their workers, too. It’s a process that’s made easier by features such as MasterCard’s Business Controller, which lets employers set limits and alerts to better control spending.
DeSilva praised such solutions as tools that save time, save money, reduce waste and drive commerce, and noted that when SMBs are successful, economic success generally follows as well.
“Small business owners and entrepreneurs form the backbone of our nation’s economy and are the engine of economic growth,” he said. They provide the innovation and product breakthroughs that are embraced around the world.”
Eugene DeSilva is a Group Head responsible for the Global SME Segment within the Global Commercial Products Group. In this role, he leads the global development and commercialization of the MasterCard innovative commercial products and solutions group that serves small business and mid-size organizations. Having joined MasterCard Worldwide in April of 2007, Mr. DeSilva brings more than 25 years of financial services experience to the group. He has held various general management, marketing, product development, strategy development and technology positions during his career.
Mr. DeSilva spent 12 years working for American Express in a variety of progressively more senior management roles and built a startup transaction processing division to $200MM in annual revenue in three years. After leaving American Express, Mr. DeSilva joined a division of Canadian Imperial Bank of Commerce (CIBC) as part of their senior management team responsible for building a global internet bank. In a three year period, the division launched four co-branded internet banks and acquired over 1MM customers. Mr. DeSilva was also responsible for building an ancillary startup outsource management division where he grew annual revenue to $75MM in three years. He left CIBC and joined easyInternetcafe LTD, a division of Easy Group, to transform a global internet café company into a global internet café franchisor. In six months, he reorganized the company, significantly reduced losses and sold 50 global franchise licenses.
Mr. DeSilva holds a Masters of Business Administration degree with a dual major (Finance and MIS) from Fordham University Graduate School of Business and a Bachelor of Science degree from Fordham University College of Business Administration.