Mastercard Economics Institute: Small Businesses Go Digital at Three-Times the Pre-Pandemic Levels

Small and large merchants in Latin America going online for the first time exceeded 200% in 2020.

MIAMI - October 6, 2021 - To shed light on the impact the global health crisis – and ongoing recovery – has had on small businesses globally, today Mastercard released Recovery Insights: Small Business Reset. Looking at 19 markets around the world, the report reveals that sales at small- and medium-sized businesses (SMBs) lagged behind those of larger companies by up to 20 percentage points at the peak of the crisis. However, spending has recovered in 2021. Total sales at SMBs rose 4.5% through August 2021 year-to-date compared to the same period in 2020, while e-commerce sales are up by 31.4%.

Drawing on the Mastercard Economics Institute’s new Small Business Performance Index* of aggregated and anonymized sales activity within the Mastercard network, Recovery Insights: Small Business Reset identifies several key trends:


  • Closures: Globally, small businesses that closed early in the pandemic were about three times as likely as larger businesses to remain closed long term. Around the world, one-third of small businesses that closed in April 2020 remained closed after six months, and about one-fifth were still closed after 12 months. Latin America and the Caribbean witnessed a similar effect:
    • In Mexico, 31% of small businesses that closed during the pandemic remained closed at six months, 3.6 times higher than large businesses.

In Brazil, 28% of small businesses that closed during the pandemic remained closed at six months, 1.7 times higher than large businesses.


  • E-Commerce: Following shutdowns, the number of small and large businesses going online in LAC for the first time went above 200% in 2020, which reflects increased demand for an online sales channel. Specifically, in Latin America:
    • 362% more merchants in Peru accepted e-commerce sales in 2020 for the first time vs. 2019.
    • 208% more merchants in Brazil accepted e-commerce sales in 2020 for the first time vs. 2019.


  • Entrepreneurship: Globally, one-third more small retailers launched in 2020 than in 2019, nearly 8x the number of larger firms created. This trend of considerable new SMB formation in 2020 is reflected around the world: U.K. (+101%), U.S. (+86%), Australia (+73%), Germany (+62%), Brazil (+35%), and South Africa (+13%).
    • In Latin America, the number of new SMBs in Brazil grew 35% in 2020 2019. The number of new SMBs in Mexico grew 13% in 2020 vs. 2019.

Sectors - Lodging, Restaurants & Groceries:

  • Sectors - Lodging, Restaurants & Groceries: Where people are traveling, the trend to stay local has benefited small lodging companies (and hurt big city large hotels). In Mexico, small lodging businesses outperformed large ones, showing steady performance in 2021. The restaurant sector shares a similar story with SMB’s in Brazil outperforming large businesses in 2021. In addition, SMB grocer shops have seen consistently higher performance over large businesses as well over the course of 2020 and 2021.

“Supporting neighborhood businesses has been a rallying point throughout the pandemic. However, the challenges faced have been very real, due to their dependency on local markets, local supply chains and tighter cash flows,” said Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute. “But, we see brighter opportunities ahead. The shift to digital opened the door to the pandemic's silver lining: a resurgence of entrepreneurship and innovation.”

Supporting small business owners is a continued priority for Mastercard, which pledged to bring 50 million small businesses and 25 million women entrepreneurs into the digital economy by 2025.

In Latin America, Mastercard has introduced a range of initiatives including, the launch of Mastercard’s Digital Allies, a coalition focused on accelerating the digitization of small businesses throughout the region. In July, Mastercard joined the Regional Alliance for the Digitalization of Women in Latin America and the Caribbean, a private-public multi-stakeholder partnership under the leadership the Ministry of Women and Gender Equality of Chile (supported by Mexico, Uruguay, Costa Rica, Panama, ECLAC, UN Women, and Microsoft) that aims to offer digital skills courses to 3.8 million women and create more than one million economic opportunities for women in the region throughout the next three years.  

Mastercard also works closely with governments and other organizations around the world to create environments, programs and policies so small businesses can flourish. Through our Digital Country Partnership projects within Panama and Mexico’s public sectors, we’re leveraging our global experience and technology to accelerate the region’s digital transformation, advance financial inclusion, focus on gender initiatives and continue to improve how people and businesses pay and get paid. In addition, Mastercard recently disclosed a policy paper addressing ways governments can support SMB recovery.

You can view the full Recovery Insights: Small Business Reset here. This is the fifth report in the Recovery Insights series; other reports can be found here.  


The Mastercard Economics Institute developed the Mastercard Small Business Performance Index as a more universal classification system for SMBs. The Index leverages a comprehensive AI-driven algorithm to identify unique indicators, such as number of locations, sales volume, number of transactions, within aggregated and anonymized sales activity in the Mastercard network.


This presentation and content are intended solely as a research tool for informational purposes and not as investment advice or recommendations for any particular action or investment and should not be relied upon, in whole or in part, as the basis for decision-making or investment purposes. This presentation and content are not guaranteed as to accuracy and are provided on an "as is" basis to authorized users, who review and use this information at their own risk. This presentation and content, including estimated economic forecasts, simulations or scenarios from the Mastercard Economics Institute, do not in any way reflect expectations for (or actual) Mastercard operational or financial performance.

About Mastercard Economics Institute

Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights - including Mastercard SpendingPulse™ - and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.

About Mastercard (NYSE: MA)

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.