Digitisation: How we can provide a lifeline for small businesses

It’s no secret: without small businesses, the global economy would falter. Small-to-medium-sized enterprises (SMEs) support an incredible seven out of every 10 jobs around the world¹. Yet, this vital group has suffered cataclysmic losses over the past year.

Small firms may be innovative and agile, but they lack the cash reserves and bargaining power of big corporations. And across Europe, COVID-19 continues to have a devastating impact, with 65% of owners worried about the future of their business² – a chilling figure that should concern all of us.

The road to recovery is paved with pixels

Digitisation has offered many of these pandemic-hit firms a lifeline. As lockdowns were announced across the globe, going online was no longer a ‘nice-to-have’, it became a business imperative. Ask any of the big global consultancies – from McKinsey³ to Deloitte⁴. They all say that the COVID-19 recovery will be digital-first. Visa's own research has shown that more people are buying goods and services online than ever before. In fact, more than half of today’s consumers would prefer to do all of their shopping online. And almost eight in 10 people plan to dramatically decrease the amount they spend in real-world stores over the next five years⁵. For bricks-and-mortar SMEs, this can either present a daunting challenge or an exciting opportunity.

For Nino Redruello, owner of La Ancha restaurant in Madrid, the past 12 months have been filled with great uncertainty. However, he saw the opportunity that taking orders online offered his business and launched his delivery project Escalope Armando. It has been so successful that he has opened a central kitchen exclusively for takeaway orders. Looking beyond the pandemic, he says he will continue to innovate and that “if it wasn’t for this year, it would have taken us 10 years to do it.”

At Visa, we want every small business to have the confidence to go digital. This is why we have pledged to help 8 million SMEs across Europe digitise for the first time. We have teamed up with 100 different partners, including governments, around the world, all dedicated to helping small business owners develop an online brand and start selling.

These partnerships have been bold and innovative, breaking down barriers that stand between the SME and digitisation. One way we are doing this is by growing acceptance of digital payments among small businesses by providing incentives and support. An example is our agreement with Poland’s Ministry of Finance to offer the nation’s smallest firms access to digital payments technology free of charge.

One of the 235,000 businesses to have benefited from the initiative is Karolina Kuzioła-Sierosławska’s American-style bakery Słodko in Białystok. As a result of having a mobile contactless terminal, she is able to safely accept payments both in her store and when she delivers to people’s homes – avoiding using cash wherever possible. Karolina said that contactless and mobile payments have made “a huge difference” to her business.

Crucially, our network of partners ensures that SMEs go digital in the safest, most efficient and customer-centric way possible. For example, the ecommerce platform Shopify can help with everything entrepreneurs need to start, run and grow their business. Our research shows that 80% of consumers expect a slick web presence, so we teamed up with Wix – the experts in easy-to-navigate DIY websites – to help an SME’s virtual brand to stand out. To make life even easier for time-strapped business owners, this support is all bundled into one handy online toolkit along with loads of easy-to-digest guides and resources. I’m proud to say that together we’ve now helped 2 million businesses build their digital capabilities, but we have a lot more work to do.

Small businesses have made it very clear that they don’t want handouts and loans – they want the tools to trade themselves out of this crisis.

The barriers to going digital

Going digital remains a daunting prospect for many small business owners. When you run a business, you often wear many hats: you handle the invoices, pay taxes, make sales, and even order the stationery. Going digital may seem a distraction from your day-to-day role. When building a digital strategy, there are also many things to consider, from marketing to point-of-sales technology to payments expertise. It’s a steep learning curve. We have spoken to thousands of SME owners across the region and we are now seeking to address all of their pain points, ensuring every question is met with a simple answer.

The rewards for making that leap are manifold. Our research has found that business owners who embraced digitisation during the pandemic said they were more resilient as a result, and are all prioritising digital marketing and online sales in the future.

It’s all about shopping small

Consumers are more passionate about small businesses than ever before. The pandemic reminded all of us about the value of that great bakery on the corner or trusted plumber just a few minutes up the road – not to mention the local hairdresser. We want to support this trend any way we can, which is why we created the “Where You Shop Matters” campaign. This is a long-term commitment that recognises the essential role small and independent businesses play in our communities, reminding everyone that where you shop matters, now more than ever.