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Leaders In Payments
Leaders In Payments
DE&I Special Series: Jane Prokop, EVP and Global Head of Small & Medium Enterprises, Mastercard | Episode 308
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Unlock the potential of women entrepreneurs across the globe with insights from Jane Prokop, Mastercard's dynamic leader for SMEs, who joins us to shed light on the unique obstacles women in business face. Discover the sweeping impact of small and medium enterprises and grasp the specific challenges that hold back women founders, from the limited access to venture capital to the intricate labyrinth of securing bank loans. Jane doesn't just expose the issues; she shares Mastercard's robust toolkit of digital resources and educational programs that are leveling the playing field and fostering success for women in business.
Learn about the groundbreaking initiatives, including the Hello Alice Small Business Mastercard and the Women by Design program, that are tailoring support to the needs of these trailblazing women. Revel in the stories of resilience and innovation as Jane paints a picture of a future where women's business ventures flourish, supported by a network of mentorship, state-of-the-art digital tools, and collaboration among governments, nonprofits, and private sectors. And for the small businesses reeling in a post-pandemic economy? Jane unveils how Mastercard's innovative products are not just a lifeline but a launchpad into a thriving digital-first future.
Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape. We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments. We will also hear stories from our guests about their journeys to the top.
Speaker 2Hi everyone and welcome to the show. Joining me today is Jane Prokop from MasterCard. Jane is the executive vice president and global head of small and medium enterprises. Jane leads MasterCard's development of high value, easy to use products that meet SME's key needs, that help close the racial wealth and opportunity gap and that help bring small businesses everywhere into the digital economy. Today, we discuss how MasterCard is helping women-owned businesses succeed. We also talk about some of the barriers women-owned businesses face and several programs and initiatives that MasterCard has in place to help these women-owned small businesses around the world. We've got a great episode ahead, so let's get started. Hi Jane, Thank you for being here and welcome to the Leaders in Payments podcast.
Speaker 3Hi Greg. Thank you very much for having me. I'm excited about our conversation.
Speaker 2Yeah, me too. So this is the third of four episodes in March about diversity, equity and inclusion. It happens to align with International Women's Day, which was March 8th, and March is also Women's History Month. So let's just start out by talking a little bit about you and your role at MasterCard, and then we'll dive into the meat of the conversation. So, Jane, tell us a little bit about yourself and your professional journey.
Speaker 3Perfect. Well, greg, I've got over 20 years of experience, primarily in the financial service sector. I've been in various areas of financial services and really for the more than 10 years prior to coming to MasterCard, I was very deeply immersed in the small business space, particularly in financing of small businesses, and that's really what got me excited about small and medium businesses, because in that role where I ran a company doing financing, I saw both the challenges that these businesses face in standing up their business and growing successfully and sustaining that growth, and also the tremendous promise of the sector that there's just so much farther we can grow by working with these businesses and serving their needs. I've been obviously involved in inclusive leadership and financial services In the past. I've been a board member for the Women's Bond Club of New York, I've been a mentor for American Corporate Partnership and, of course, here in MasterCard, I work closely with our Center for Inclusive Growth, which drives inclusion as its primary goal.
Speaker 2Okay, can you talk a little bit about your role there at MasterCard?
Speaker 3Absolutely. I'm in the MasterCard's global strategy for supporting the small and medium enterprise segments and, just for context, I think it's important to understand that the role of the SME segment globally. Small and medium-sized businesses account for, on average, over 90% of actual business entities and more than half of employment worldwide, and typically contribute more than half of GDP in almost every market. So it's important for us to support these SMEs, both for supporting broad-based and equitable growth and for driving additional digitization and, I would say, the move away from cash-based economies into digital payments.
Speaker 2Great. So today we're going to dive deep into how MasterCard is helping women-owned small businesses succeed, and I think everyone knows the importance and you mentioned it of small businesses not only to our economy in the US but economies around the world. But women-owned businesses often face unique barriers for success. So what are some of those barriers?
Speaker 3Yeah, Great question For background on this. We need to think about the major problems that are faced by SMEs, and so all of our research, and others' research as well, shows that there are. You can bucket these into kind of three categories, Mr. Capital is a major pain point for SMEs globally. Most SMEs struggle to get the financing they need, either to get financing at all or to get it in the sums, the amounts that they need to expand their businesses and to meet their expenses. In addition, they need support with cash flow. They need to have tools that enable them to manage payments, manage their accounting, control spend, do better forecasting. So that's another area where we can lean in to improve their prospects. And third, this ties a little bit to the cash flow, which is operating efficiency. Smes currently are using a lot of different solutions which are provided by many different providers and that are not well-nitted together. So getting tools that are well-integrated, that enable them for a single sign-on to really access different functionality and also to bring their data together on the back end of that in a holistic way, that's a strong need that SMEs have.
Speaker 3So, within that context, there are certain barriers that women-owned businesses face and I think, if we talk about access to capital, we know that it's female owners of businesses are particularly challenged because they have trouble raising venture capital when they're starting their firms.
Speaker 3Those firms that are trying to go for high growth almost always require venture funding, and we know that female founders raise just about 2% only of venture funding in the US, and so this is a barrier to those fast growth companies right off the bat.
Speaker 3But historically they're also less likely to get approved for bank loans, and when they do get approved they're subject to higher interest rates, smaller loan amounts, so they're really not getting the type of capital that is enjoyed by other firms in their sectors. So I think part of that is attributable to the fact that women entrepreneurs often have a less developed network than male entrepreneurs. They're less integrated into the finance and business communities, and that's a big barrier that we seek to address with some of the programs we have in place. But they also need just better access to education about financial services and digital tools. So, if you think about globally, statistics from the World Bank show that about 13% of the world adults, that's about 750 million women still don't have a bank account or a mobile money account. So, kind of starting with the basics. We need to work on getting better coverage for women entrepreneurs.
Speaker 2Okay, so are all of these challenges? Are they regionally specific, or do women own small businesses around the world face the same set of challenges?
Speaker 3It definitely varies by region. So we see that the rate, for example, of business ownership by women ranges quite a bit. In South Asia, it's just 18%. In Latin America, where it's at pretty much the highest level, about half of small and medium businesses are run by women. So that's a huge spectrum and I think that we are very careful to really look at the specific challenges that they face in different regions. So if we take Latin America, where again, about half of the small businesses are run by women, our research indicates that they're really looking for tailored solutions that provide benefits that help them in being able to run the business better. So, for example, they value health benefits offered as a benefit with their payment solutions wrapped around the payment solution health benefits for themselves and their families, mentorship opportunities and continuing education. Now, if you take North America, for example, we do see big disparities in access to capital. There, Women own about a third of small businesses, but only 2% as I mentioned earlier of venture capital funding goes to them. So that's kind of an area that needs greater attention in the US.
Speaker 3In Europe it's a little bit of a different profile. So family-run businesses are a mainstay of Europe's small and medium enterprise sector and what happens when you have family-run businesses is often the women founders or owners are still carrying the bulk of the burden for childcare and it impedes their ability to really devote as much attention to the work. So they're kind of overworked. They're struggling to keep up with the demands on both sides. So we found that in Europe, out of the women entrepreneurs, only about a third of them feel prepared actually to operate in the digital economy. So it really varies quite a bit. But we do very detailed research on a fairly frequent basis as well as our regional teams do this, and we really don't treat it as sort of one-size-fits-all. It's very specific to regions and to countries within those regions.
Speaker 2Okay, great. So the next question is kind of a two-part question. One is why is investing in women-owned small businesses so important? That's the first part, and the second is what are the upsides for the lenders, for the financial institutions and basically for the economy as a whole?
Speaker 3Yeah, great question. There have been many different estimates about what the economic upside could be in terms of GDP for teeny economic parity for women, and one of the stats that I found I find just staggering is that the World Economic Forum estimated that if economic parity for women were reached, it would add about 12 trillion to the world economy. If women were able to participate in entrepreneurship, starting up companies, at the same rate as men, the global GDP would rise by 3% to 6%. So it's very important to invest in women and empowering women to start and successfully run and grow firms, because we also see that when they do that, they are very successful at it.
Speaker 3So in the US, women-owned firms grow at more than double the rate of all other firms. So investing in women is a good investment. Effectively. That's the message there, and I think that the upside is for all of the financial institutions and those who look to serve the small and medium segments is fairly straightforward, which is that by tailoring solutions in a way that make them attractive and supportive to women entrepreneurs, you greatly increase the span of your business. So you're able to increase your customer base within the small and medium sector and you're able to increase it with companies that are going to be quite successful and are going to grow well and that are going to contribute to your bottom line, if you're a lender.
Supporting Women Entrepreneurs
Speaker 2Right Makes a lot of sense. So in 2020, MasterCard made a pledge to help 25 million women entrepreneurs with solutions to help them grow their business. So can you speak to that initiative?
Speaker 3Absolutely. That was a very important initiative that we undertook during the pandemic, and that was the goal by 2025, to provide 25 million women entrepreneurs with solutions that help them grow their businesses. The good news on that is that we have reached that milestone already at this point, through both combination of our commercial and philanthropic efforts to support small businesses, and those are along the lines of digital acceptance of payments, increasing that, increasing access to credit and mentorship, and access to networking for women entrepreneurs as well. So we're incredibly proud of having reached that.
Speaker 2So what are some of the programs that MasterCard launched that help minority owned small businesses?
Speaker 3Yeah, we. Well, I would start with our core card products and, as you know, we have credit, debit, prepaid cards and a variety of services around those cards. So we have a few examples where we have tailored these products to women entrepreneurs. One in the US is the Hello Alice Small Business MasterCard, and that that card offers access to tools and services, including expert business advice, a variety of business insights, a cashback program and a very unique awards program that helps women entrepreneurs specifically, 63% of their portfolio of small business owners are female within Hello Alice, so we're very proud of that program and, generally speaking, we have been, over the past couple of years, really looking to diversify the range of merchant offers and loyalty rewards that we have globally. So we have a couple of programs easy savings and another one called easy savings specials. We actually have looked within markets to add not just global offers that are tailored towards small businesses, but local offers that provide business product activity tools for some of the businesses owned by women and that helped to educate and provide protection for the businesses with regard to cybersecurity and business productivity. So those are some of the ways in the on the core card side, we have really baked in, you know, an awareness and a specific support for female entrepreneurs. But we also have a range of other programs. We've got in Latin America a program called women by design, and this is a very interesting program which enables issuers to customize solutions for women entrepreneurs so that they can, literally on an issuer by issuer basis, provide differentiated packages of solutions and they're able to use our insights and our research insights, our gender data analyses, to create new portfolios, to enhance their existing propositions. And some of the resources that are available. There are the in K virtual accelerator, which is part of our entrepreneurs Odyssey program, which looks to enhance their digital skills.
Speaker 3Strive, e commerce toolkits, strives. It is a very broad program with a mastercard that's active in dozens of countries today, which is basically a combination of a few different aspects its business capacity building and digitization training. It also involves mentorship, and mentorship is a very important thing for women entrepreneurs in particular and networking. So in a few examples here are in in India, we have a business capacity building program that is targeting bringing, enabling a million women SMEs To succeed in the digital economy. In Ukraine, we really work hard to support displaced Ukrainian women entrepreneurs to help them find optimal locations to set up and establish their businesses when they were displaced into other European economies and build new lives. So that Equipping about fifty thousand women with tools, when, with this data, that helps them again, you know, create a new life and a new business in their adopted location. And in UK we've got a very strong programs in strife UK which focuses on mentoring and training. So that program has already reached more than a million small businesses. More than half of those are led by by women.
Speaker 2Okay, I've definitely heard some themes across all these programs that you've talked about. So, when you do look across them and you look across the globe, what are some of the key takeaways, or maybe phrase differently, best practices?
Speaker 3Yeah, I think that there are few, from a very high level. One is really for players in financial services and those related ecosystems to invest in understanding the unique needs of women owned SMEs. So, again, as we mentioned earlier, they're not all created equal and in different economies and in different industry segments and at different stages of growth, they need different types of support. So we continue to conduct in depth research studies and we really encourage our partners to do the same so that they can pinpoint, you know, where they need to adjust their offerings to be able to bring more of them into the economy.
Speaker 3Also, ease and digitization you know we've mentioned that for small businesses, it's very important to have tools that are easy to access, and that really holds true Especially for entrepreneurs, because it's really important for them to be able to easily access these sorts of tools.
Speaker 3So it's, you know, we need to scale acceptance of digital payments. We need to make sure that digital tools are incorporated into the workflows of female founders, and that's critical to help them compete and to succeed in a digital first world. Then I would say a third big one is that it really requires cooperation and coordination across governments, across nonprofit organizations and private industry to address the full array of barriers that prevent women-owned businesses from reaching their potential and to being able to reach their highest level of contribution to the economy. For example, we mentioned that women disproportionately get pulled into childcare caring for elders, so a lot of work can still be done on the government side to provide support there, while industry players and nonprofits work on expanding access to capital for women entrepreneurs, providing them with mentorship and networking opportunities and with those digital tools. I think by bringing all that together, there is a real opportunity to move the needle.
Speaker 2Okay, yeah, that makes a lot of sense. Obviously, you have these programs and initiatives that MasterCard has launched and done an exceptional job globally. You've also designed products and services that support small businesses, so can you speak to some of those too?
Speaker 3Sure, I think too that I would highlight which are important given the change in the small business environment post-pandemic. What we've seen is, during the pandemic, many businesses who had not been online have gone online. They were kind of compelled to go online. It was to survive. They also have. Many of them have broadened their horizons beyond their local markets. Once they went online they found I can source internationally and, by the way, I can also sell my product or service internationally.
Speaker 3We designed, together with our transfer solutions team within MasterCard, we designed a program called Cross-Order Services Express. That program is a very easy lift program that we can provide through our partners, so through financial institutions, through fintechs, that allows them to streamline international payments experiences for SMEs. The main pain points that SMEs tend to face small and medium businesses for international transfers is lack of transparency in terms of the costing. What is it going to cost them to move $10,000 from Mexico to China? The timing of getting those transfers done, the exact amount that is going to be received on the other side. This program, which is built on our cross-border services that MasterCard offers, enables financial institutions to set up an offering very quickly and efficiently. That gives that transparency. It's a front end, paired with all the nuts and bolts of getting international transfers done, but the front end effectively allows a small business to go in and say I need to make this payment to this counterparty. Here's the timing in which I need to make the payment. Let me see what is going to cost me and let me see how quickly it can be done. When will they receive the money? It's very transparent, it's very easy to use and it allows these small businesses to get access to our network of more than 100 markets that cover 90% of the world's population. Small businesses who are reached through this can reach practically everywhere in the world from a single connection and get the transparency and the service level that they need. That's one another one again.
Speaker 3Following that, the spirit of the times is how do we leverage the newest tools coming out To help small businesses, and jenai and a I in general tools are very well suited to meet the needs of small businesses, because one of the issues that small business owners Executive space is really being able to gather and process the vast amounts of data that are now available publicly, and so this is the idea here and this is a new solution that we're in the process of developing mastercard small business a I. The idea here is to be able to utilize, you know, diverse and inclusive content from a curated global media coalition, so we know the quality, the data that's being fed into it to create a small business a I tool that will help them quickly get answers to common questions they may have. So, typically, somebody looking to, let's say, they're looking to open a small business, they have capital and they're looking to open a small business in a particular market, it could take months for them and they would need to work with external consultants to get an understanding of the economics and the degree of competition in different segments where they're thinking of opening the business industry segments. This tool they'll be able to pull together data very, very quickly to understand where opportunity may lie For them and where they should focus their efforts. So the tool, you know, will have it ready to go probably by the end of this year, but the idea is that it'll be it will be kind of a prompt to driven tool, so it'll prompt them where to start, you know, in using the tool and they can ask questions and it comes back with relatively customized advice and pretty much real time On a whole range of topics.
Speaker 3So it's a conversational chat bot interface and we're very excited about this because we think that you know, over time will be able to expand on this type of tool and apply it to a wide range of Both internal and proprietary data sets, as well as external data sets for a wide range of use cases. So we're very excited about that. And the third thing I would mention is we do have a program called start path, which is just a fantastic program for early stage companies. It's a global startup engagement program. So last year we began launching SME waves within start path. That is going out to say we want to find startups in a small business space and bring you into the start path program to provide you with mentoring, to provide co-innovation opportunities with both us and with our customers. You know our financial institutions, our fintech partners, are digital enablers in a wide wide range of other partners of Mastercard that can help these start path companies scale their businesses quickly.
Speaker 2Okay, that AI product sounds interesting to me. As a small business owner, I think I would be interested in that, so I'm looking forward to seeing that come out later in the year. Yes, so much so, jane. We've covered a lot of ground about, obviously, all the great work that Mastercard is doing across the globe to help women owned businesses. Is there anything else you'd like to add before we wrap up the show?
Speaker 3Yeah, I would just say that small business, small and medium business, is really in a sweet spot In the sense that by our investing into these segments, we can not only, you know, create a very thriving business model, but also help global economies thrive, and so it meets both the goals of, you know, being A sustainable sort of profitable segment, but also driving inclusivity and leveling the playing field. So that's very important to us and will remain important over the coming years and decades.
Speaker 2Okay, great, I think that's a great way to end the show. So, jane, thank you so much for your time today. I know your time is very valuable, so I really appreciate you being here. Thank you, greg, it's been a pleasure, and to all you listeners out there, I thank you for your time as well, and until the next story.
Speaker 1Thank you for joining us this week on the Leaders in Payments podcast. Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes. If you enjoyed listening, please share on your social channels as well.