Mastercard has formed a partnership with retail group Massmart in a bid to help small, medium and micro-enterprise (SMME) companies with digital payments.
The financial service corporation will aid Massmart in connecting with SMME’s to deliver consultation on transitioning from cash-based to digital card payments.
This comes in the aftermath of the COVID-19 pandemic, where attitudes in consumer payments changed to a more digital payment preference.
“The Covid-related lockdown in 2021 and subsequent unrest experienced in July last year had a devastating effect on small businesses,” stated Varsha Dayaram, Senior Vice President for Massmart Financial Services.
During the latter half of 2021, Massmart found that SMMEs could purchase an electronic point of sale (POS) at a discounted price from their retailers which include companies such as Game and Makro. Massmart saw a significant increase in sales from POS devices.
Dayaram continued: “Informal traders suffered enumerable losses during this time, which was exacerbated by the destruction of their POS infrastructure, thus depriving them of offering card payments as tender type at a time when card acceptance in informal communities became more pervasive as a secure and convenient alternative to cash.
“As such, Massmart was delighted to partner with Mastercard to enable small traders to purchase POS devices at discounted prices in an endeavour to empower them to not only recover, but to thrive.”
This partnership coincides with Mastercard’s existing support for SMME’s. According to McKinsey & Company, a management consultation firm, 80% of SMME’s in the UK reported in May 2020 that 80% of its revenues dropped as a result of the pandemic. In addition, 60% of SMME’s reported that they were out of business by 12 months.
The transition from cash to card payments has accelerated since the pandemic. In a 2021 Global Payments Report, it is projected that by 2024 just 7% will account for all in-store purchases in the UK.
In South Africa, Mastercard has accelerated collaborations to advance affordable digital payments acceptance solutions such QR and Tap on Phone – a contactless acceptance solution that turns any NFC-enabled Android device into a physical point of sale.
Dayaram concluded: “Strategic partnerships like this are crucial to lowering technological and cost barriers in order to connect more small businesses to the digital economy, which aids inclusive, economic growth and shows our commitment to drive a sustainable society.”