In the United States alone, 99.9% of businesses are considered small businesses. Mastercard has spent decades listening to, learning from, and collaborating with the small business community because it recognizes how critical they are to the foundation of both global and local economic health.
The three pillars of small business resilience
1. Access to capital
The biggest barrier to growth for a small business is securing the capital it needs to grow. The traditional lending models that banks rely on are more geared to either big business or consumers. Since many business owners do not naturally have a lot of cash flow to work with, there is an even greater emphasis across the industry to make small business lending more accessible, efficient and faster.
“Really small businesses are more worried about, do they have enough money at the end of the month to pay their three or four employees,” said Barnett.
As part of their support for those who own – or aspire to own – a small business, Mastercard is working with its partners across the industry to power new products and services that expand access to capital through open finance. By facilitating the secure exchange of financial data at a consumer or business’s request, the technology creates new avenues for capital required to start or grow a business. Open finance-powered tools can also help business owners establish credit histories in order to gain a line of credit, which is particularly useful for those micro businesses with limited working capital.
2. Smoothing out the digital journey
While the digitalization of business and commerce continues to grow and become more complex, the good news for small businesses is that technologies that previously were only available to big businesses are now widely accessible.
“75% of small businesses leverage digital tools in their daily operations,” said Barnett, as cited in a Mastercard study, and these tools are often tailored to the business’s specific segment, whether that be restaurants, retail or manufacturing.
The source of sales is also increasingly digital. Mastercard MEI data shows that by 2024, over 40 percent of new card-accepting businesses were exclusively online. That’s up from less than 30 percent only five years earlier. Simply put: “Every business is now a digital business,” said Barnett.
All of which makes it imperative that a small business has its digital ducks in a row. Today’s influx of data and technology can be overwhelming – so much so that according to the U.S. Chamber of Commerce, 25% of small businesses owners are burdened by using more than six different platforms daily.
For resource-strapped business owners and solopreneurs where time is precious, a streamlined one-stop shop experience is critical to manage their non-stop workday. Tools like Biz360 are emerging to meet this need – providing a comprehensive business management platform that brings essential operational tools together in one place. Mastercard Digital Doors delivers an all-in-one digital platform of tools and resources to help businesses establish, enhance and protect their online operations, while programs like Mastercard Strive provide access to digital training, mentorship and knowledge sharing.
3. Cybersecurity
Of course, the digital acceleration has meant greater exposure to its native threats. Consider this harrowing statistic: nearly half of all small businesses have experienced a cyberattack in the last year—and of those, one in five went bankrupt or had to close their business.
While cyberattacks were not always the only reason for those failures, it nonetheless underscores that cybersecurity is critical.
For just that reason, Mastercard offers a vulnerability scanner for small businesses, enabling them to pinpoint, prioritize and act on cybersecurity threats to their websites or apps. They can also receive monitoring, alerts and resolution services to help protect against identity theft. Millions of merchants worldwide can access Mastercard’s risk scoring and evaluation capabilities combined with VikingCloud’scybersecurity remediation solutions to become more resilient to evolving cyber threats.
As the digital landscape evolves at a rapid pace, equipping businesses with ongoing education, resourcesand tools is essential to defending their critical assets and reputation. Through a marketplace developed in partnership with CyberMonks, businesses can easily find and implement tailored cybersecurity and risk management solutions.
The road ahead: What consumers want
Arguably the biggest part of building a resilient business is understanding shifts in consumer behavior. And consumers are becoming more reliant on—and expectant of—a seamless digital experience.
Research shows that Gen Z, particularly, expects the businesses it frequents to be tap-to-pay, one-click checkout, cash-optional experiences. They’re 2.5 times more likely than Boomers to say they want a fast online purchase journey, and nearly half of them say they prefer using the newest, most innovative payment methods.
“You need a completely seamless and smooth digital checkout experience,” said Mark Barnett. “Gen Z won’t stay with you throughout a clunky experience.”
Consumers are also increasingly looking for sustainability as much as savings. The market for secondhand and upcycled goods is growing and there’s an opportunity for small businesses to tap into the circular economy said Barnett. By embracing rental, reuse and repair programs, they can increase efficiency and capture value back into their supply chains.
