4 months ago
22
Global payment network and technology company, Mastercard, says small businesses in Latin America and the Caribbean, LAC, could unlock $448 billion through the utilisation of digital payment systems.
Mastercard recently revealed the findings of a whitepaper it commissioned aiming to help small businesses and the consumer-packaged goods, CPG, industry better engage with digital payment solutions.
The payment company describes this moment as a turning point for the small businesses while describing the emerging digital payment solutions as game changers for small retailers and suppliers in the traditional trade sector.
The Mastercard whitepaper sheds light on the half a trillion dollar payment opportunity available across 11 countries in the LAC and the United States.
The study, conducted in partnership with Payments and Commerce Market Intelligence, examined Argentina, Brazil, Chile, Colombia, Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Peru and the United States.
This research took place between October 2024 and January 2025.
Among the findings are key trends accelerating the transformation in these business spaces, barriers that must be addressed and recommendations for industry players to unlock growth.
The whitepaper is entitled Transforming payments: Digital solutions for traditional trade in the CPG industry.
According to the paper, there are nearly 12 million traditional retailers in the 11 surveyed countries. These include convenience stores and small independent shops.
The paper reveals that these businesses generate approximately $362 billion in business-to-customer sales. But, 43 per cent of these transactions are still conducted in cash, representing a $155 billion opportunity for payment digitisation.
The whitepaper says an even bigger opportunity exists for business-to-business transactions between small retailers and suppliers. The report estimates that 90 per cent of these payments, totalling $293.4 billion are still handled in cash, cheques or bank transfers.
The cumulated figure of the none digital transactions between businesses and customers and businesses and businesses amount to approximately $448. Mastercard describes this as an opportunity for digital payment adoption.
Mastercard says this could be especially appealing for financial service providers, financial tech, fintech, companies and CPG brands to accelerate financial inclusion and operational efficiencies throughout the region.
The financial technology company says small retailers will have the opportunity to grow, become a part of the formal financial system and keep pace with changing consumer shift toward digital transactions.
Overall, Mastercard, which is available in more than 200 countries, reasons the move to further digitising these transaction could drive regional economic growth.
“The digitalisation of payments in the traditionally cash-heavy trade sector represents one of the most significant untapped opportunities in the CPG industry today”, said Walter Pimenta, Mastercard’s executive vice-president of commercial and new payment flows in the LAC.
Meanwhile, Mastercard says among the trends driving digital payments in the CPG sector are the growing number of business-to-business E-commerce platforms, newer business-to-business marketplaces, embedded credit solutions and instant digital payment.
Also driving the trends is conversational commerce, which is described as having access to products and customer support via instant messaging platforms.
Meanwhile, Mastercard acknowledges that some small businesses operate on small margins.
To accelerate digital transformation, the technology multinational recommends small businesses build scalable digital infrastructure and promote tailored financial solutions.
Also, it’s recommends the businesses develop easy-to-use applications, use artificial intelligence to customise promotions and offerings and engage in partnerships with fintech firms, payment networks and other brands to build a sustainable digital ecosystem.
English (US) ·