- The coronavirus pandemic has accelerated the shift toward digital payments, and that’s been a boost for players like Mastercard.
- Payments companies have opportunity and an obligation to help small businesses and consumers through the economic recovery, Mastercard’s president and CEO-elect Michael Miebach said at Business Insider’s Global Trends Festival.
- Both through its own platforms like Digital Doors, and via partnerships with banks and governments, Mastercard is looking for ways to help small businesses survive online and compete with larger players.
- Visit Business Insider’s homepage for more stories.
Payments companies have a responsibility to help small businesses and consumers who were hard hit by the coronavirus, according to one high-profile executive.
Mastercard’s president and CEO-elect Michael Miebach said the payments giant has been well positioned to address changes in the space in recent months.
When consumers shied away from cash, largely out of health concerns, and turned to contactless payment options like digital cards and mobile wallets to minimize touch points at the register, Mastercard was prepared.
“We, as a leading voice in the payment industry, never missed a step throughout the six and a half months,” Miebach said in a recent interview during Business Insider’s Global Trends Festival.
And while the payments giant has successfully weathered the economic storm, other companies, many of which are small businesses, haven’t managed as well.
Miebach said that players like Mastercard need to help SMBs and consumers who were impacted by helping them work toward economic recovery.
“The stimulus package has helped us initially, to get over the first period,” Miebach said. “The time that [the stimulus] created, we needed to use. We have an obligation and a responsibility in the payment industry and many other parts of the private sector, as well as the public sector, to get these guys back on their feet.”
Digital payments can help with economic recovery
While payments networks like Mastercard have a deep understanding of the benefits of moving money electronically, the coronavirus pandemic posed a situation where governments, too, came to understand them.
Distributing CARES Act benefits, for example, is made much easier when the government is able to send stimulus funds directly to small businesses and consumers electronically.
“There’s an increase in interest in the payment infrastructure as a tool to drive economic recovery, which from an industry perspective is good,” Miebach said.
For Mastercard, that meant building products and technology that help small businesses shift online and manage their businesses digitally. And beyond that, Mastercard helped small businesses navigate all the other challenges that come with an online business, like inventory management and cybersecurity.
And across the private sector, companies are increasingly willing to work together to help the economy recover.
“The willingness of companies around the private sector to partner versus compete is much, much higher,” Miebach said. “The conversations that we have with banks and with other payment companies around what can do today is much more focused than was ever before.”
Large players like Mastercard can help level the playing field for small businesses
By some measures, the small-business segment has been hit hardest by the coronavirus pandemic. It’s hard for a local retailer to compete online with giants like Amazon and Walmart.
But Miebach highlighted how players like Mastercard can give small businesses a chance. Through programs like Mastercard’s Digital Doors, small business ideas are given a platform to easily open an online store, secured through Mastercard’s network.
“We generally believe in competition, in innovation, and in an open market ecosystem,” Miebach said. “If you have many small businesses trying to find a way online and they end up with one or two marketplaces, that is going to tilt the ecosystem in a particular way.”
Mastercard is partnering with more than a couple of marketplaces, meaning small businesses get more choice in how they run their businesses online.
“We’re partnering with a whole set of different players, like the banks providing capital and a whole range of fintechs that provide connectivity for these small businesses to go to market,” Miebach said. “That is, I think, the approach that is needed to ensure that in the end, it is a level playing field and small businesses have a chance to compete.”
And with its wealth of spending data, Mastercard has seen that consumers are shopping locally, which is something they’ll look to foster and maintain.
“There’s that piece of online shopping that you need to do because you really don’t want to go to the mall, but wherever you can, you will travel locally and you will spend locally,” Miebach said. “That is what we’re seeing in the data, and that’s going to help keep that level playing field intact.”
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