MasterCard, Vcita ‘Business Unusual’ Initiative Well-Suited to These Times

A notable announcement from last week was vcita and Mastercard Europes new learning and management solution for small businesses. 

The new service is billed as a “CRM for SMBs.” One of its unique features is its connection of a learning platform to immediate action to help small business users make a sale, upsell an existing customer, and so on.

A Time of Rapid Transformation

We believe coronavirus will accelerate the digital transformation of small businesses. Further, SMBs that completed their digital transformation before coronavirus are more likely to survive the lockup storm.

This initiative by vcita and Mastercard is a smart play. The “Business Unusual” initiative involves guiding small businesses to adopt new software tools designed to help them be more effective and efficient. 

What really interests us is the partnership with Mastercard Europe. Mastercard is trying to extend the conversation it’s having with small businesses beyond traditional banking services. 

Can Banks Leverage ‘Ideal Position’ with SMBs?

We have long believed banks are in an ideal position to extend their small business relationship deeper into their SMB customers’ operations. Doing so would raise switching barriers and also buy some insurance to help their customers stay in business. 

We reached out to vcita to learn a bit more about the deal and here’s what we learned. We wondered what the breath of merchant coverage was via Mastercard. They could not provide that number but did point us to this data below which shows some 600 million MasterCard in wallets in 2014. We’d imagine this number is closer to 750 – 800 million by now. 

 

We asked about Mastercard’s European partner network. While vcita could not provide much detail, we surmise that if it’s anything like the U.S., Mastercard works with dozens if not hundreds of partners. 

One of our key questions is how influential Mastercard will be in moving merchants to utilize vcita’s solutions. We doubt MasterCard can or would work directly with the merchants to move to a more modern operations platform. We assume that Mastercard’s biggest strength in this relationship is its marketing muscle to recommend the vcita solution. 

Deal Origins Predate the Virus

We wondered if this deal arose from the coronavirus crisis. Or was it already underway? Vcita said they met Marcus O’Toole, Vice President, Head of Small Business Segment at Mastercard Europe, last year. They’ve since been working very closely with his team on this joint initiative.

The two companies share a common goal of helping small businesses succeed. In particular, by addressing their everyday needs in a digital way. This allows them to operate more efficiently and focus on what they love doing.

“Building this, we’ve relied on two of our most meaningful relationships. The first, with the entrepreneurial community that surrounds us: vcita users who rallied to offer their advice and support to their peers in navigating an uncertain economic landscape,” said Adi Engel, vcita’s CBDO. “And the second, with the like-minded team at Mastercard, who share our strong belief that by working together we can help businesses who are the backbone of our economies emerge on the other side stronger, with a solid foundation for success.”

When SMBs Suffer, We All Suffer

O’Toole said a key motivation for MasterCard’s interest in the partnership was the desire for a deeper connection to small businesses.

“This partnership builds on our desire to become a partner of choice for businesses of all sizes here in Europe and around the world,” O’Toole said. “By partnering with vcita to launch ‘Business Unusual’ we are delivering real help for small businesses as they build digital-first capabilities into their operations. When small businesses suffer, local economies suffer. Mastercard is pleased to be supporting these important pillars of our communities in a meaningful way.”

We expect more alliances will come to the forefront as companies work to supply needed oxygen to SMBs worldwide. Since local and SMB is a primary focus of Localogy we are glad to see deals like this emerging to pump energy into the sector. We are eager to see other smart alliances come together in the coming weeks and months.

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