Mastercard survey reveals the challenges in small businesses

A comprehensive survey conducted by Mastercard with 10,000 participants from European family-run and non-family-run small and micro businesses provides valuable insights into the challenges these enterprises face in their modernisation journey, encompassing cash flow management, digitalisation, cybersecurity and family dynamics. This research targeted individuals working in family-run SMEs and non-family-run SMEs across diverse European markets.  One finding is the growing significance of digital transformation for these businesses, even though only 37% are feeling adequately prepared for the digital economy. The Mastercard study highlighted several challenges related to payments and digitalisation. That’s why in this blog post we will dive deeper into the solutions that can help family-run enterprises overcome the challenges.

Easy digital transformation for SMEs

The Mastercard survey highlights a significant challenge faced by micro and small family-run enterprises – their readiness for the digital economy. While these businesses have begun to incorporate digital tools such as digital payment methods and project management tools into their operations, there is still room for improvement. More people in family-run businesses find digital transformation to be a challenge, with 20% expressing concerns compared to just 12% in non-family-run enterprises. Only 37% of family-run business respondents in the survey reported feeling very prepared to operate in a digital economy. This underscores a critical issue that needs to be addressed.

One effective solution is to streamline operations by using a single platform. Rather than juggling multiple vendors, businesses can consider adopting a single platform that handles card payments, invoicing, inventory management and more business operations at once. This approach reduces complexity, enhances cost efficiency and ultimately leads to a better customer experience. Family-run businesses can leverage this strategy to support their digital transformation journey.

Transforming payment preferences

One insight from the Mastercard survey is the continued preference for cash among family-run businesses, with 25% of them expressing a preference for cash transactions. This is significantly higher than the 14% reported by non-family enterprises. This lingering preference for cash poses a challenge to modernisation efforts, as cash transactions can be cumbersome, less secure and less convenient for both businesses and customers.

In many small business owners, the preference for cash comes from the belief that using new payment methods is difficult and expensive. However, easy solutions exist and one solution lies in partnering with a platform that offers flexibility without a long-term contract and monthly fees. Such platforms typically provide businesses with the means to accept card payments – for example, online tools like Payment links or point-of-sale (POS) systems for card transactions. With myPOS, merchants even get instant payouts and a business card allowing them to withdraw funds immediately. As a result, accepting card payments can lead to several advantages, including improved cash flow management, customer convenience, enhanced security and better data insights.

Privacy and Security in the digital age

Security and privacy concerns are significant barriers to implementing new payment technology for both family and non-family small businesses. In particular, over half of family-run businesses identify security concerns as a key factor impeding the adoption of new payment solutions. These concerns are more pronounced among specific age groups, such as 25–34-year-olds and 35–44-year-olds in family businesses.

Reliable internet connectivity is another challenge, affecting 30% of family businesses, compared to 23% of non-family enterprises. To address these concerns, businesses can invest in card readers equipped with free SIM cards. This feature ensures constant payment processing, even in areas with less stable internet connectivity, while also addressing broader security and privacy issues.

Navigating the modernisation journey

In addressing these challenges, businesses can turn to innovative solutions like myPOS. By offering a single platform for payments, smooth card acceptance and instant settlement, myPOS empowers micro and small businesses to navigate the modernisation journey with confidence. Whether it’s streamlining operations, expanding payment options, or ensuring uninterrupted connectivity, myPOS provides a competitive advantage that can make all the difference.

In conclusion, the Mastercard survey paints a clear picture of the challenges faced by small and micro businesses in their quest for modernisation. However, with the right solutions and a proactive mindset, these businesses can overcome the challenges and thrive in the ever-evolving digital landscape. As we move forward, it’s essential to recognise that the path to success lies in embracing innovation, making strategic choices and adapting to the changing demands of the modern business world.