The Digital Evolution of Small Businesses: Innovation, Trust and Cyber Inclusion

The pandemic left many brick-and-mortar businesses with a stark choice for their future: Go digital or go home.

As consumers clamored for touch-free transactions, curbside pickup and more online shopping and payment options, entrepreneurs embraced the opportunity as a way to not only survive the pandemic, but thrive in an increasingly cashless world. The Mastercard Economics Institute estimates that e-commerce adoption in the U.S. jumped ahead two years in 2020 alone, and the nation is now on track to reach 1.1 trillion non-cash transactions a year by 2023.

Small businesses have found that embracing digital enables them to move faster, for less capital, and achieve unprecedented reach. But, as small businesses follow the money online, so do fraudsters and criminals. While ransomware attacks on critical infrastructure and data breaches of major retailers make the headlines, the truth is that small businesses, which typically don’t have robust cybersecurity resources, are particularly vulnerable to cybercriminals; 28% of data breaches in 2020 involved small businesses. What’s more, smaller firms often suffer the largest losses relative to the size of the business, and are particularly vulnerable to certain types of attacks, such as phishing.

These attacks can leave them exposed to loss of income, lost data and system costs, cyber extortion, third-party liability and defense costs, and identity theft. Any one of these could put a small business out of business—for good.

The importance of small businesses is often overlooked. The reality is that they are the backbone of the global economy—fostering growth and innovation, providing jobs and supporting local communities. Small businesses (under 500 employees) in the U.S. comprise over 99% of all businesses and employ approximately 47% of private-sector workers, while in the U.K., that figure is 61%.

At Mastercard, we believe that the digital economy belongs to everyone, and we are committed to providing a safe and inclusive experience for all. With this in mind, we created The Mastercard Trust Center, dedicated to helping small businesses defend their most important assets—their business and their reputation—through free online access to trusted cybersecurity research, education, resources and tools. One area of focus is understanding risk, and how to mitigate it.

Like any business, small businesses rely on a network of third-party suppliers. Ensuring that these suppliers are not going to put the business at risk of an attack is not easy—but it’s essential. Recent reports show that around half of breaches can be attributed to the failings of third parties. Automating processes that identify and quantify risk, such as vendor risk assessments—which would take weeks if not months to complete manually—greatly reduces the burden on small businesses.

The surest way to create a trusted digital economy is for infrastructure providers and small businesses to collaborate to help protect all participants and allow innovation to thrive. For our part, Mastercard is committed to bringing 50 million micro and small businesses into the digital economy by 2025. Through our collaborations with governments, businesses and other organizations, we are building a network that provides small businesses with the secure platform they need to create a future that will ultimately benefit everyone.

— Ajay Bhalla, President, Cyber & Intelligence, Mastercard