Small and medium-sized enterprises (SMEs) in South Africa, numbering nearly three million businesses, play a key role in the country's economy, accounting for over 60 percent of employment and about 34 percent of the gross domestic product, according to industry estimates.
These enterprises include spaza shop owners in Soweto, hairdressers in Durban, and fresh produce sellers in Limpopo, whose daily trade supports families and community functioning.
Nevertheless, there is a significant gap between the contribution of these companies and what they receive in return. IFC data from 2024 suggests a global credit deficit of $5.7 trillion for micro, small, and medium-sized enterprises (MSMEs), which rises to $8 trillion when informal businesses are included.
In developing markets, 70 percent of SMEs lack sufficient financing. For South Africa, with its high unemployment rates, this is not just a lack of funds but a structural barrier for enterprises that are best positioned to absorb workers and create income sources.
Mastercard believes that one of the most transformative factors for SME growth is the ability to accept payments and access tailored products, specifically simple and secure digital payment acceptance for traders.
When a business can accept cards, contactless payments, or QR codes, it goes beyond a simple transaction. It facilitates the gradual entry of the business into the formal economy, the formation of a verifiable financial history, and increased visibility for lenders, suppliers, and new customers. Comprehensive payment acceptance solutions and customized issuance solutions can serve as a bridge between informality and opportunity.
Mastercard has tripled the number of payment acceptance points globally, reaching over 150 million points both in stores and online. In Africa, Mastercard's payment network grew by 45 percent in 2025, integrating millions of consumers and small businesses into the continent's rapidly growing digital economy.
Although South Africa has a high level of banking penetration, daily operations, especially in the informal sector, remain predominantly cash-based. This situation is beginning to change, and the shift is already noticeable in South Africa. According to Mastercard's SME Confidence Index, 90 percent of surveyed SMEs in South Africa reported adopting digital payments.
Businesses consider the most important benefits of digital payments to be seamless payments to suppliers (89 percent), more efficient multi-channel transactions (87 percent), and faster access to revenue (72 percent).
Digital payment adoption does more than just replace cash at the till; it allows SMEs to track and manage expenses, create verifiable transaction histories, and encourage card usage, reducing reliance on cash and accelerating the formalization of the informal economy. However, payment acceptance should not remain the prerogative of large retailers with dedicated terminals.
Solutions that assist businesses are critically important. Mastercard's Tap on Phone technology, available in over 115 countries, allows small traders to turn any smartphone into a payment terminal. Combined with real-time SME accounts and the issuance of physical or virtual cards, this enables traders to accept payments and manage their business finances in one step.
A trader who can accept cards, pay suppliers digitally, and separate personal and business expenses builds a financial track record, and with it, a path to obtaining capital in the medium and long term. For a street vendor in Johannesburg or a tour operator in Cape Town, this is the difference between participating in the digital economy and being excluded from it.
Growth based on digital payments is only possible with people's trust in the system. Here, Mastercard's investment in security infrastructure is critical. Mastercard's tokenization service, MDES, now secures 30 percent of all Mastercard transactions worldwide, processing a billion tokenized transactions weekly.
However, tokenization goes beyond ensuring security during payment acceptance. It underpins virtual cards and tokenized credentials, allowing SMEs to securely pay suppliers online, and powers digital wallets like Apple Pay and Samsung Pay, which consumers increasingly expect traders to accept.
Combined with AI-based fraud detection, this multi-layered approach to security ensures that digital payments are not only convenient but also a widely recognized safe way to conduct transactions. For SMEs, where one fraud incident can have devastating consequences, this level of protection directly influences the business owner's decision to switch to digital methods or stick with cash.
Click to Pay, Mastercard's simplified online payment experience, is available in many countries and supported by a wide range of payment activators. By combining tokenization and payment keys, it makes the online shopping process as simple as paying in a store, opening e-commerce to small businesses that previously found it too complex or risky.
Payment acceptance is just the starting point. Sustainable growth requires more. SMEs need access to working capital, financial management tools, and connections to broader markets. This is where the real work of economic integration happens, and it requires cross-sector collaboration.
Comprehensive acceptance and issuance solutions unlock real value. When a trader accepting digital payments also receives an SME Mastercard with integrated expense management and access to working capital, the entire financial lifecycle of that business becomes visible. Acceptance generates revenue, and issuance allows that revenue to be managed and reinvested.
Together, they create financial transparency that opens doors to credit. Mastercard offers a wide range of comprehensive payment solutions designed to help SMEs manage expenses, control card spending, and optimize operations, tailored to diverse business needs, from startups to growing companies.
Mastercard's collaboration with the African fintech service SAVA within the Mastercard Strive SME support program empowers African small businesses through financial management technologies designed for the realities of operating in emerging markets, where a reliable accounting tool can be as valuable as a line of credit.
The partnership with BoxCommerce to launch a Mastercard-based prepaid card provides SMEs with fast, secure, and direct access to their earnings. These cards, available in virtual and physical forms and fully integrated into the BoxCommerce trader dashboard, allow payouts almost in real time, helping SMEs manage cash flow more effectively and reinvest earnings directly into inventory and operations without relying on traditional banking systems.
Mastercard Move enables financial institutions to provide fast, secure cross-border payments via mobile platforms with lower costs and greater transparency. For a South African SME importing goods from Kenya or exporting handmade items to Europe, this ability to send and receive international payments without exorbitant fees is the key differentiator between local activity and global engagement.
For a long time, the narrative around African SMEs focused on survival. Resilience is valued, but it should not be the limit. The question is not whether small businesses can withstand the test, but whether systems are designed around them to support and help them thrive in the digital age.
The projected African digital payments market of $1.5 trillion by 2030 represents a massive opportunity, but this figure will only become a reality when spaza shops, small traders, and cafes in settlements can participate equally in this economy.
Over time, as payment acceptance becomes more universal, it can broaden the tax base, support employment formalization, and help reduce economic isolation. Mastercard's role in this evolution is intentional. Empowering SMEs is a strategic priority not only for sustaining business but also for enabling it to grow with purpose.
This commitment is reflected in Mastercard's goal to connect and protect 500 million people and small businesses on the path to financial well-being by 2030. By providing access to the right tools, technologies, and financial solutions, SMEs are better equipped to move beyond sustainability and move towards meaningful impact.
The future will be shaped by those who create it. For South Africa, this means three million small businesses—and the ecosystems ready to support them.