Their dependence on the cash-economy and supply chain disruptions have made India’s small and medium businesses amongst the hardest hit from the COVID-19 pandemic. To address these challenges, Mastercard today announced a commitment of INR 250 crores ($33 million) to help reboot Indian SMEs and enable business recovery.
As part of this commitment, Mastercard will roll out multiple initiatives to:
- help small businesses by growing digital payments awareness and providing low-cost acceptance solutions – online and offline – that are simple, safe and secure;
- drive inclusive growthby enabling small merchants and kirana stores with access to credit, knowledge and tools that will drive operational efficiencies; and
- empower women entrepreneursby increasing their business acumen.
This is an extension of Mastercard’s expanded worldwide commitment to financial inclusion which pledges to bring a total of 1 billion people and 50 million micro and small businesses into the digital economy by 2025. In April this year, the company also pledged $250 million to support small businesses globally.
Today’s announcement confirms that the company will dedicate a significant proportion to India to benefit millions of SMEs over the coming five years. “Small businesses are the foundation of India’s economy, contributing nearly 35 percent of the GDP. Mastercard will leverage its network, knowledge, technology and partnerships to help these enterprises sustain and grow their businesses. As a result of these initiatives, India’s small businesses and entrepreneurs will gain increased access to credit and build operational efficiencies through improved customer and inventory management, employee engagement and regulatory compliance,” said Porush Singh, Division President, South Asia, Mastercard. “We offer the highest levels of safety and security leveraging our technology, furthering trust and enabling faster adoption of technology. Global analyses indicate that SMEs can see their revenues increase by up to one-third with such technology adoption.”
Supporting small businesses in going digital
These new initiatives build on Mastercard’s multi-year partnership with the Confederation of All India Traders (CAIT) to grow digital payments awareness and support merchant on-boarding for digital commerce. Last year, the company launched the multi-city Team Cashless India campaign with a goal to equip 1 crore (10 million) merchants in India with digital payments acceptance capabilities. It leveraged the popularity of its brand ambassador, former captain of the Indian cricket team M S Dhoni, to educate merchants and consumers on the benefits of digital payments.
Praveen Khandelwal, National Secretary General for CAIT said, “During the extended nationwide lockdown, more than 90 percent of SMEs were closed for business. To adjust to the changing scenario, small brick-and-mortar shop owners are rushing to take their companies online. To help these enterprises resume operations, we are pleased to partner with Mastercard in their efforts to support merchants with quick and easy ways to move their businesses online, facilitate much-needed access to credit, and address shifts in consumer buying behavior towards digital contactless payments over cash.”
In June 2020, Mastercard in partnership with Axis Bank and Worldline launched a digital point-of-sale (POS) solution with “tap-on-phone” functionality that allows merchants to accept payments simply using their smartphones. The solution enables face-to-face payments with Bharat QR and NFC payments, as well as remote payments for home deliveries via link-based payments. This solution enables fast and easy on-boarding of merchants and acceptance of digital payments by merchants and kirana stores.
To further boost confidence in digital commerce and ensure safety and security of digital transactions, Mastercard has launched easy-to-use AI based applications that help preempt and prevent cyberattacks.
Enabling growth by access to credit
To address the vast working capital gap for small businesses, Mastercard is working with large companies along with banks to introduce credit solutions and schemes that enable easy and fast availability of credit, ensure supply chain continuity, and bolster entrepreneurs’ financial resilience. The company has partnered and provided data and AI based applications for emerging markets that catalyze merchant access to supply chain credit with key suppliers using SME purchase history. Mastercard is also collaborating with local partners to develop solutions that will help small businesses to create web stores and provide them with technical support and analytics to deliver better user experiences.
Unlocking economic potential of women
Mastercard is working with various institutions to bring more women into fintech, support women business owners and cultivate more women entrepreneurship. The company has partnerships with microfinance institutions and small finance banks to digitize and tailor their products for women entrepreneurs. Mastercard has programs for education and awareness of women entrepreneurs to increase their business acumen. Under the program training and basic technology education is imparted to women kirana shopkeepers, using Buddhimoney, empowering them with ease of doing business, increased access to credit and market access.