Securing the digital frontier: Mastercard is helping fortify trust in Africa’s growing digital economy

South Africa’s nearly 3 million small and medium enterprises (SMEs) make up more than 60% of the country’s employment and roughly 34% of gross domestic product. These businesses are the backbone of the nation, supporting families and communities, yet they face significant challenges in accessing the financing they need to grow.

The International Finance Corporation (IFC) estimates a $5.7-trillion credit gap globally for micro, small, and medium enterprises (MSMEs), rising to $8-trillion when informal businesses are included. In emerging markets, 70% of MSMEs lack adequate financing, leaving businesses vulnerable and hindering economic growth.

Mastercard is taking steps to empower these businesses by providing acceptance and tailored products. By enabling merchants to receive digital payments through various methods such as cards, phone taps, or QR codes, Mastercard helps businesses transition into the formal economy and gain a verifiable financial history. This, in turn, makes them visible to lenders, suppliers, and new customers, bridging the gap between informality and opportunity.

According to Mastercard’s SME Confidence Index, 90% of South African SMEs have adopted digital payments. The advantages of digital payments are clear, with businesses citing seamless supplier payments, more efficient multichannel transactions, and quicker access to revenue as the most significant benefits. Digital acceptance not only replaces cash at the till but also enables SMEs to track expenses, build transaction histories, and encourage card spend, reducing cash dependence and hastening the formalization of the informal economy.

However, accepting payments alone is not enough for SMEs. They need solutions that meet their needs halfway. Mastercard’s Tap on Phone technology allows small merchants to turn any smartphone into a payment terminal, coupled with real-time SME account and card issuance. This enables merchants to accept payments and manage their business finances in one step, building a financial track record and opening the door to accessing capital in the medium to long term.

For SMEs to thrive, trust in the system is crucial. Mastercard’s investment in security infrastructure, including its tokenisation service, MDES, powers 30% of all Mastercard transactions globally and processes one billion tokenised transactions weekly. Tokenisation not only secures acceptance at the point of sale but also underpins virtual cards and tokenised credentials for secure online payments and powers digital wallets like Apple Pay and Samsung Pay.

Combined with AI-driven fraud detection, this layered security makes digital payments convenient and widely regarded as a secure way to transact, providing SMEs with the protection they need to go digital.