Mastercard Dreamonomics Report Finds Smaller Businesses Prioritizing Stability

Mastercard's Dreamonomics report reveals that smaller businesses prioritize stability and predictability over rapid growth. When surveyed across 18 countries, 68% of the 6,000 SMEs polled said they prioritize stability and predictability more than fast growth, while 54% actively avoid unnecessary financial risk. Mastercard's global head of small and medium enterprises, Mark Barnett, acknowledges that this preference for stability over speed is a shift from the belief that all entrepreneurs strive for scale.

He attributes this change to the uncertain economic environment but remains cautious about declaring it a permanent shift. Barnett, who co-owns a winery in southern France, exemplifies this preference as they aim for stability and deep customer relationships rather than unlimited growth. The report also highlights that stability extends beyond financials, with 61% of SMEs valuing deeper customer relationships over reaching a larger customer base.

For financial service providers, this shift towards stability and deeper relationships means they need to offer more integrated financial services and products tailored to specific industries and business needs. Currently, the SME market is highly fragmented, with businesses relying on a mix of bank services and specific business software tools.

While 89% of SMEs surveyed want more digital tools, 78% emphasize the importance of integration. To meet this demand, financial providers are developing broader small business offerings that integrate more financial functions, such as payments and accounting, within existing banking apps or business software. However, these offerings must provide a compelling reason for owners to switch from their existing products.

For instance, financial products designed for specific industries or businesses with unique needs, like those in the creative sector or agriculture, can be more valuable than generic offerings. Regional differences also play a significant role in SME preferences. For example, in Brazil and Mexico, digital payments are highly adopted, while in Eastern Europe, the Middle East, and Africa, emerging payment methods like cryptocurrency and stablecoins are gaining traction.

Europe presents another unique scenario, with both international and domestic card networks and account-to-account payment systems coexisting. Thus, the Dreamonomics findings present financial providers with a dual perspective: SMEs across countries share common demands for stability, closer customer relationships, and simpler technology, but the specific products and payment infrastructure required to meet these needs must be designed with the unique characteristics of each business and market in mind.