Mastercard: Small Business Growth Hinges on Using Tech Better, Not Chasing Trends

Strategic narratives in payments can come with some loaded words.

Artificial intelligence, institutional blockchain and real-time rails are routinely positioned as the decisive forces shaping the next cycle.

Mark Barnett, global head of small and medium enterprises at Mastercard, told PYMNTS during a conversation for the February edition of the What’s Next in Payments series, “Word of the Year,” that the word he would choose to define the year ahead isn’t something technological.

Instead, it’s something arguably more demanding: connection.

“For too long,” many small- to medium-sized businesses (SMBs) have operated “on the edges of the digital economy,” constrained by cash, checks and fragmented back-office systems that drain time and opportunity, Barnett said.

The real challenge ahead is not adopting the next tool, but stitching together the systems, networks and communities that allow businesses to participate fully in a faster, more automated economy.

“SMBs need to be connected in the very broadest of terms,” he said.

Small businesses need to be connected to their customers, peers, communities and, critically, the digital infrastructure that underpins modern commerce, he said.

His own proposal is to move more B2B payments onto card networks. The appeal lies not only in speed but in working capital benefits, fraud protection and settlement guarantees, Barnett said.

The Cost of Fragmentation Across Small Businesses

In developed markets, the digital SMB gap is rarely absolute. Most small businesses can accept electronic payments and use accounting software. The failure point is integration, when reservation systems do not communicate with inventory management, payments do not reconcile automatically with accounting, and customer data sits apart from cash flow forecasting.

“Businesses that can’t do that are not fully connected and will suffer adverse effects in terms of time that they lose on administrative tasks,” Barnett said, describing this as a structural tax on time.

Lost hours are not trivial for SMBs and their owners. They can accumulate daily, diverting attention from growth, hiring and customer relationships.

Barnett recalled a conversation with a restaurant owner in Paris, a former management consultant, who ran three establishments almost entirely on spreadsheets. After moving to a FinTech platform that unified banking, payments and operational tools, the change was immediate.

“He said it changed his life,” Barnett said.

Disconnection also carries risks beyond inefficiency. Cybersecurity has become a core determinant of business survival, Barnett said. Mastercard’s research shows that 46% of small businesses have experienced a cyberattack. Of those, 19% were no longer operating a year later.

“Even if you take that with a pinch of salt, it’s a horrifying number,” he said.

Apart from the catastrophic consequences for business, cyberattacks also disrupt the connection to customers, with 80% of SMBs that experienced an attack having to invest significant time rebuilding trust with customers and partners.

Small businesses are disproportionately targeted, yet rarely equipped to assess or mitigate cyber risk. In response, Mastercard has moved to embed baseline protections directly into its small business offerings, most recently announcing the automatic inclusion of cyber risk monitoring and identity theft protection for Mastercard-issued small business cards across Latin and the Caribbean.

The offering reinforces core trust and protection for the over 70% of SMBs in the region who say they wouldn’t survive without digital payments.

From Back-Office Software to Automated Delegation

The most consequential shift Barnett said he sees ahead for SMBs is not simply better integration, but a change in how these small businesses delegate work. He traced a familiar progression. Paper ledgers gave way to spreadsheets; spreadsheets to software-as-a-service; SaaS to systems that generate insights.

The next stage is functional delegation to autonomous digital agents, he said.

Barnett recounted a discussion in London with several small business owners from different industries. One founder described spending two hours each evening manually managing payments, invoices and reconciliations across multiple accounts. Another, a 23-year-old entrepreneur with formal training in artificial intelligence, expressed disbelief.

“I built two agents, one an administrative agent and one my finance agent,” the younger founder told the group. Each morning, this entrepreneur reviewed their outputs, approved actions and moved on. What consumed hours for one business took minutes for another.

“That’s already here,” Barnett said.

The implication is not that every small business will immediately adopt autonomous systems, but that expectations around efficiency are shifting. Virtual finance, marketing and sales functions are emerging inside mainstream platforms, lowering the cost of professionalized management.

Interoperability as Infrastructure

Industry discussions around open APIs and interoperability have persisted for more than a decade. Barnett said he believes the transition from aspiration to implementation is now underway, particularly across North American markets.

The benefits extend beyond convenience, he said. Integrated systems reduce manual intervention, lower fraud exposure and free owners from operational minutiae.

“It’s going to make them safer, and it’s going to free them up from all the things that small businesses have to do to keep their business going but aren’t the main purpose of their business,” Barnett said.

When asked to name a risk worth taking, Barnett pointed to payments infrastructure itself. Despite decades of modernization, he said he still sees persistent inefficiencies in invoice settlement, bank transfers and legacy instruments that offer limited protection or certainty.

The first step to increased interconnectivity? A credit card designed for the realities of small business, connecting entrepreneurs to working capital, smoother cash flow and the financial tools that help ideas turn into growth.

Payments remain the connective tissue of commerce. Where they are slow, opaque or insecure, the entire system absorbs the friction. For small businesses navigating an increasingly automated economy, the next advantage may come not from adopting something new, but from finally making what they already use work together.

For all PYMNTS B2B and AI coverage, subscribe to the daily B2B and AI Newsletters.