Mastercard: With Digital Commerce ‘The New Normal’ For SMBs, Focus Shifts to Faster Payments

The resilience of Main Street small and medium-sized businesses (SMBs) over the past 18 months has been remarkable, as small businesses have not only survived but adapted, reinvented and thrived, thanks in large part to their embrace of digital commerce.

But with the rapid uptake of online selling platforms by SMBs largely in place, Mastercard Global Senior Vice President of Small Business Andrea Gilman told PYMNTS’ Karen Webster the next phase is all about getting SMBs paid faster and helping them address their notorious cash flow problem.

“SMBs have become truly omnichannel. A lot of these small businesses thought that these were the tools that were the domain of the larger guys, but now they’re able to take advantage of them and drive increase sales,” Gilman said. “So it’s very exciting. It’s happening. It’s real and it’s the new normal.”

To embrace that new normal, Gilman pointed to Mastercard’s $250 million commitment to SMBs via investment in new technologies, products and education, as well as from a renewed outside interest in supporting this segment of the market too.

“What we’re seeing is not only small businesses making their transition, but companies are also coming in and doing more than ever before to support small businesses,” she said. “I think we are going to see this only continue to accelerate.”

Gilman explained how early in the pandemic, two very pressing pain points quickly became very apparent. She said most of the company’s efforts have revolved around addressing how SMBs get cash through the door at a time when their physical premises are closed, while also enabling their actual transition from a physical to a digital business.

“We’re helping them pay in a way that’s safe and secure, but we also want to help them get paid more quickly from their customers,” she said. “For Main street, that means digital payments acceptance and really helping them make sure they have the right point of sale tools to do that.”

A PYMNTS survey showed 75% of SMBs had to defer rent or not pay vendors due to cash flow problems.

Read more: The Digital Transformation Of Main Street SMBs

Webster pointed out another problem for Main Street SMBs, worsened by the pandemic, is the difficulty they face in attracting capital to grow their businesses. Gilman said Mastercard sees this too and is determined to make life easier for SMBs on this front as well.

“Something else we are really working on is democratizing access to capital,” she said. “I think you’ll see a lot coming out through our recent acquisitions of companies like Finicity.”

Read more: Mastercard Pledges $250M In Help For Small Businesses

Among Mastercard’s innovations is its new Trust Center, which provides education and tools for SMBs to transition from physical commerce to digital. In addition, its data and services team launched an array of tools to help SMBs understand what it means to go through a digital journey and where they need to be.

“We also rolled out tools and capabilities with our partners, for instance the Digital Doors program in the U.S. that helps SMBs learn how to get online, protect themselves an accept digital payments,” she said.

Data from PYMNTS’ recent 2021 Main Street Business Survivor Study shows three quarters of main street SMBs believe the digital shift is not just a temporary fix but is here to stay as a key part of their business model going forward. Webster was keen to know what Mastercard is doing to address this future reality.

See more: Consumers And The New Retail Landscape

Those new technologies and tools helped SMBs adapt faster than anyone could have imagined.

“SMBs became truly omnichannel, using these new digital tools to drive increased sales,” Gilman said. “We saw many that were able to increase their customer base and drive more sales with their digital storefronts, their marketing online and some really creative usage of social media to show what is in their store.”