By Anouska Ladds
IT’S NO surprise that rising costs, fragile supply chains, and cooling demand are forcing Philippine businesses to rethink their future strategies. But economic slowdowns don’t just test resilience — they expose inertia. Limited understanding of financial tools, poor line of sight into finances, and constant exposure to theft and operational inefficiencies are daily battles to overcome. In the Philippines, where around 995,000 micro, small, and medium enterprises (MSMEs) make up 99.5% of all businesses in the country, many still operate in cash-dominated environments, which could further hold them back from fully embracing digital tools and scaling.
CAPITALIZING ON CARDSIn today’s tight-margin environment, effectively managing working capital is the key to navigating financial pressures and seizing new opportunities. Eight in 10 SMEs fail due to ineffectively managing their cash flow. Even as financial institutions embrace digital and data-driven ways to assess SME credit risk and unlock tailored support in the digital economy, card adoption stands out as a simple yet powerful solution to deliver flexibility, security and control to key processes like vendor payments.
Businesses that accept cards are 14 percentage points more efficient at maximizing working capital than those who don’t. This is especially critical in volatile economic conditions, where liquidity and responsiveness are essential for resilience. Beyond checkout, integrating cards into unified API-driven platforms enable SMEs to automate reconciliation processes, reduce manual errors, and gain real-time visibility into cash flow. Research estimates that by simply digitalizing the expense process businesses can save as many as 30,000 hours a year and boost productivity by more than 70% — a crucial opportunity for Philippine small businesses that contribute roughly 63% of jobs and 36% of gross domestic product and play a key role in the economy. With enhanced financial control and forecasting accuracy, SMEs can prioritize innovation and growth.
WHEN PROGRESS PAYS OFFFor SMEs navigating uncertainty, your instinct may be to slow down investments in favor of stockpiling. But standing still poses a bigger risk. Around the world, we see a robust ecosystem of digital platforms transform how SMEs launch, operate, and scale their businesses. In markets like the US and Chinese mainland, marketplaces have enabled small businesses to reach global customers. Several other platforms have also provided small players with access to financial services, logistics, and other capabilities once reserved for large enterprises. In the Philippines, e-commerce platforms like Shopee and Lazada have expanded the reach of MSMEs across the archipelago and simplified the digitization process for business owners. Card transactions through electronic fund transfer services like InstaPay, which are available on these platforms, have helped the country surpass its retail digital payments target for 2024.
It’s clear that modernizing your payments infrastructure can bring critical value during this period of flux. However, it can also be a daunting undertaking — one with plenty of unknowns, a plethora of partners to choose from and murky regulatory complexities to overcome. But the path forward is clearer than you think. Getting started is as easy as A-B-C:
• Audit – Audit current payment and reconciliation touchpoints to identify automation opportunities that reduce risk and delays. When combined with unified payment platforms with global reach, open APIs, and built-in reconciliation tools, your operations move from fragmented to focused.
• Bridge – The right partner doesn’t just provide the tech; they’re the bridge to operational excellence and sustained growth. They’re a trusted guide that minimizes risk and recognizes that small steps lead to big changes. Together, you’ll solve real challenges and drive meaningful change every step of the way.
• Checkout – In an increasingly digital-first era, your checkout is the last — and often most decisive — touchpoint with a customer. A frictionless payment journey boosts conversions and cements loyalty: when every tap, scan or click feels effortless, customers come back.
Card-based solutions may not be the cure-all, but they can be the catalyst for transforming working capital and operational pain points into competitive advantages. Ultimately, progress does pay off — especially for those who move first.
Anouska Ladds is the Mastercard Executive Vice-President, Commercial and New Payment Flows, Asia-Pacific
