Small Merchants, Big Opportunity: The Forgotten Path to Financial Inclusion

Realizing the potential of cashless and digital payments for micro and small merchants

Micro and small merchants (MSMs) represent a forgotten path to financial inclusion, as well as a significant commercial opportunity. As an economic linchpin across the developing world, MSMs can help spur the growth of cashless ecosystems by encouraging customers to adopt and use digital payment accounts—which are an ideal first step towards broader financial inclusion. Merchants themselves also stand to benefit as cashless acceptance can be a stepping-stone to more sophisticated financial products. Given that fewer than 10% of MSMs in the developing world currently accept digital payments, they represent USD 35 billion in missed revenue every year for financial service providers.

This report intends to encourage dialogue and collaboration among global stakeholders to realize the potential to increase financial inclusion for, and through, micro and small merchants. It is also a call to action for financial service providers to bolster the merchant value proposition and provide small businesses with a suite of products designed to fit their needs. In this report, the authors explore the following topics:

  • The imperative to expand digital payments;
  • The critical gap in the cashless ecosystem for MSMs;
  • The path forward towards financial inclusion for MSMs and their customers.

About this Publication

By Carlberg, T., Lien, Y., Gomez, M.P., Nayar, A. , Dougherty, J.