For many SMEs, there exists a “digital divide” – a divide which separates businesses that have access to critical growth-driving tools like digital payments, e-commerce platforms, and advanced cloud-based bookkeeping software from those businesses who do not.
|Winnie Wong, country manager for Vietnam at Mastercard |
This divide also manifests itself in another issue for SMEs: difficulty in accessing financing. Without the right digital tools for record keeping, operational efficiency, and stimulating growth, small businesses often struggle to demonstrate their creditworthiness to financial institutions, even if the fundamentals of their business are sound.
At Mastercard, we provide assistance in identifying solutions that can improve the competitiveness of small businesses. We are leveraging our data insights, implementing our global technologies, and collaborating with partners to make small businesses more digital, more operationally robust, and more “bankable” – while keeping in mind the importance of simplicity and accessibility.
Here are some of the ways in which we’re working to make life easier for Vietnamese SMEs.
Simplifying digital payment acceptance
Cash is still king among most Vietnamese small- and medium-sized enterprises (SMEs). For many, the investment and infrastructure needed for a dedicated POS terminal would be either an unnecessary burden, or would not fit with how they run their business (for example, a night market stall or a delivery service).
Fortunately, with the broad penetration of smartphones in Vietnam, these barriers to entry are disappearing. To help underserved SMEs digitalise their cashflow, Mastercard has developed a low-cost acceptance solution called SoftPos. The solution allows SMEs to transform their regular smartphone into a point-of-sale terminal which can then accept contactless payments made with a physical card, and even digital wallets like Google Pay and Apple Pay.
For larger SMEs who are ready to expand their market reach, we have developed Simplify Commerce, a multifaceted solution that covers a broad range of business needs, such as setting up their own website, through to selling products and services via e-commerce channels. We recognise that most small business owners do not have the time or resources to start an e-commerce operation from scratch, which is why we developed an “out-of-the-box” product which gives business owners access to a broad range of tools necessary to take their business online, and out into the broader market.
Modern, digital, transparent bookkeeping
We are also leveraging our vast global network of partners to eradicate the digital divide which SME owners face. For example, we’ve teamed up with cloud-based business solutions provider Zoho, which provides SME owners with access to digital tools like accounting software which helps automate and digitise time-sensitive, paper-based accounting processes.
In addition to reducing the amount of labour needed for administrative tasks, Zoho also helps provide a more concrete digital picture of the businesses’ operations, which can help financial institutions make more informed decisions around extending credit.
Reimagining SME credit assessment
Another of our recent partnerships is a collaboration with Experian, a global leader in developing credit underwriting frameworks. Experian takes bands of divergent datapoints and uses them to assemble the kinds of financial profiles needed to allow financial institutions to make informed lending decisions – even in the absence of traditional credit scores, which has traditionally been a stumbling block for SMEs in Vietnam.
By fostering partnerships between fintechs like Experian, financial institutions, and other industry figures, we can integrate tailor-made products and drive a paradigm shift in the way SMEs operate and transact while assisting banks to convert SMEs into lending customers.
The Vietnamese economy has seen phenomenal expansion over the last two decades, and at Mastercard, we are committed to connecting businesses, financial institutions, and the government with the kinds of solutions that can contribute to this ongoing growth in a way that’s both inclusive and sustainable.
Through making digital business tools more accessible, we have an opportunity now to unlock the full potential of the country’s SMEs, and in doing so, to truly supercharge one of the country’s key growth engines.