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Inside Mastercard’s push to move LATAM’s small retailers beyond cash

Mastercard's Walter Pimenta on Tearshet Podcast about Latam payments

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Across Latin America, we’re witnessing a massive shift as regions traditionally dominated by cash transactions begin embracing digital financial tools. This transition represents more than just technological adoption—it’s creating new economic opportunities, enhancing financial inclusion, and building resilience against growing cybersecurity threats.

The numbers tell a compelling story: a $448.4 billion digital payment opportunity exists across Latin America, the Caribbean, and the U.S. With nearly 12 million small retailers processing $362 billion in B2C sales — 43% still in cash —a nd 90% of B2B transactions between small retailers and suppliers handled through traditional methods, we’re looking at a financial transformation that’s just beginning.

Today, I’m joined by someone at the forefront of this transition. Walter Pimenta serves as Executive Vice President of Commercial and New Payment Flows for Mastercard Latin America, where he’s leading initiatives to expand SME acceptance solutions, scale enablement through strategic partnerships, and strengthen cross-border payment capabilities.

Walter’s team is also tackling another critical trend: the growing cybersecurity challenges facing SMEs, with recent research showing 46% of small businesses have experienced cyber-attacks, resulting in bankruptcy for nearly 1 in 5 affected companies.

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Diverse markets, Diverse needs

The LATAM region is not a single, uniform market. Mastercard operates across 44 different markets in Latin America. Each country brings its challenges and opportunities. “PC and digital penetration vary widely—from high levels in Brazil and Chile to lower levels in places like Mexico,” Pimenta notes.

This means small business digitization cannot take a one-size-fits-all approach. Some SMEs need basic tools to begin accepting digital payments. Others are already looking for ways to optimize global supply chains and expand their e-commerce footprint. Mastercard addresses this spectrum by providing region-specific SME solutions. It also enables local financial institutions to better serve their markets.

Meeting SMEs where they are

Small businesses in LATAM fall into distinct categories. From individual entrepreneurs and micro merchants to more complex middle-market enterprises, each group has unique financial and operational needs.

Micro merchants often struggle with digital literacy and the cost of accepting digital payments. For them, solutions like Tap on Phone, which turns a smartphone into a payment terminal, can be a game changer. “We’ve eliminated the need for expensive hardware,” says Pimenta. “Now, any NFC-enabled phone can become a secure payment device.”

At the other end of the SME spectrum, middle-market businesses often need support for cross-border payments. It also includes ERP integration and advanced cash flow management tools. “These companies behave like large corporations. And they need systems to manage suppliers, inventory, and payments with scale,” he explains.

CPG partnerships as an on-ramp to digital

Consumer Packaged Goods (CPG) companies are becoming a vital entry point to financial inclusion. Pimenta explains how Mastercard is working with major CPG players. The aim here is to digitize their distribution and payment systems, streamlining the value chain.

Many of these CPGs sell directly to mom-and-pop stores that still rely heavily on cash. This creates inefficiencies for both parties. “The inefficiencies of cash fraud, security are costly for everyone involved,” Pimenta says.

Mastercard is digitizing order placement (through platforms like WhatsApp). It also enables digital payments via smartphones. And, it issues prepaid cards through fintech partners like Migo. “We’re digitizing both the sales and the settlement process,” he adds.

Navigating cybersecurity challenges

The move to digital opens LATAM SMEs to new threats, particularly around cybersecurity. Mastercard research shows that 46% of small businesses in the region have experienced cyber attacks. Many of them face devastating consequences.

To address this, the company is rolling out tools like My Cyber. It is a solution designed to help businesses identify and resolve vulnerabilities in their digital storefronts. “Cybersecurity cuts across all SME segments. We have a responsibility to protect them as we digitize them,” says Pimenta.

Education is also a core focus. Mastercard is building tools to help small businesses go digital. These platforms focus on keeping their operations secure.

Cross-Border Payments fueling growth

LATAM businesses are becoming more globally connected. Cross-border payments also play a crucial role. “Small businesses today want to buy from suppliers overseas. Sometimes it’s cheaper, sometimes better quality,” Pimenta says.

However, traditional international payment systems can be slow, opaque, and expensive. Mastercard’s Move platform aims to streamline this process by enabling faster, more transparent cross-border payments — through local rails, supporting transactions to over 200 markets globally. “We can now deliver transactions to almost any endpoint, account or card,” he says.

The Big Ideas

  1. Small businesses are the economic core of LATAM. “In LAC, 99% of the businesses are small businesses… the economic engine.” Small businesses are not a niche—they are the foundation of the region’s economy.
  2. Digitization looks different across LATAM. “It’s a very diverse region… from a cultural and financial point of view.” Each market requires tailored SME solutions based on digital readiness.
  3. CPG companies are natural partners for driving change. “CPGs have a direct relationship with micro merchants… and share the pain of cash.” By digitizing CPG supply chains, Mastercard helps both vendors and retailers benefit.
  4. Cybersecurity must grow with digital adoption. “We have a responsibility… and we have the technology to help them.” Tools like My Cyber are helping SMEs protect themselves as they move online.
  5. Cross-border capabilities are essential to SME growth. “Small businesses today want to buy from suppliers overseas.” Solutions like Mastercard Move reduce friction in global transactions.
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Self Financial’s approach to expanding credit access through product innovation with Julie Szudarek

Julie Szudarek secured credit cards

Financial inclusion remains one of the most pressing challenges in today’s economy. Millions of Americans struggle to access basic financial services simply because they lack a credit history or have damaged credit. This gap in our financial system doesn’t just create inconvenience – it perpetuates cycles of financial inequity that can last generations.

In my latest episode of Tearsheet, I sat down with Julie Szudarek, CEO of Self Financial, a company working at the forefront of this challenge. Julie took the helm at Self just over a year ago, bringing over 20 years of leadership experience from companies like Groupon and Atida. Though fintech is a new arena for her, Julie’s expertise in building customer-focused businesses is exactly what’s needed to tackle financial inclusion at scale.

“I’ve never done fintech before,” Julie told me candidly. “But what I bring to the table is a deep understanding of how to build customer-focused businesses that are sustainable over time.” Her mission at Self aligns well with the broader movement toward more accessible financial services: “We are only here to make outcomes for our customers better than before they started working with Self.”

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Expanding Access to Credit: Why Decoupling Secured Credit Cards Matters

For many, the road to improving their credit scores starts with tools that are often out of reach. One of Self’s flagship products, the secured credit card, used to require customers to open a credit builder account, but that has changed.

“We saw so much demand from customers who maybe didn’t want this credit builder experience but wanted a secured card,” Julie explains. “So we found a way to make that available directly.”

Now, Self’s secured credit cards are accessible without a prior credit builder account, requiring only a $100 deposit and no hard credit check. “As far as we can tell, our deposit is the lowest in the industry,” she adds. This move aims to make credit builder apps more flexible and financial inclusion more achievable.

Customer Journey: Meeting People Where They Are

Julie emphasizes that building credit is not a one-size-fits-all process. “Our customers are on a journey,” she says. Julie explains how many arrive at Self through word of mouth, traditional marketing, and partnerships.

“More than 25% of our customers say they came to us from word of mouth,” she shares. She highlights how real customer success stories drive organic growth. Self also collaborates with affiliate partners. Such as lenders who redirect applicants denied for an auto loan due to poor credit scores, offering them a way to rebuild credit.

Beyond products, education plays a key role. “Sixty-five percent of our customers say they had no financial education growing up,” Julie notes. Self responds with resources aimed at demystifying credit, interest rates, and savings strategies.

Building a Fintech Product Suite for Long-Term Customer Needs

Since becoming CEO, Julie has focused on broadening Self’s product offerings. Especially beyond secured credit cards and credit builder accounts. “One of the things I noticed when I started was that we were limited in the number of products we had,” she says.

Customers who completed their credit-building journey had nowhere else to go. “We were just saying goodbye to customers,” Julie reflects. Now, Self is working on graduation products, like unsecured credit cards. The aim is to serve customers as they move forward financially.

“We should be keeping customers on our platform forever,” Julie states. This approach also aligns with fintech solutions focused on lifetime customer value.

Partnerships and Fintech Collaboration for Broader Access

The collaboration with traditional banks and organizations is essential to expanding Self’s reach. “We have partnerships with banks like Regions Bank, which offers our rent reporting solution to their customers,” she says.

Julie says that organizations like Pathway Homes found a connection between homeownership success and Self’s products. Customers who succeeded in homeownership often had Self’s products on their credit reports. This demonstrates the positive impact of Self’s products on financial outcomes. “They reached out to us because they kept seeing Self show up in their customers’ credit files,” Julie recounts.

These partnerships extend Self’s mission of financial inclusion. They do so by embedding credit-building tools into larger ecosystems.

The Big Ideas

  1. Decoupling Secured Credit Cards for Easier Access. “We decoupled the secured card so customers don’t need a credit builder account first. It’s about reducing barriers.”
  2. The Power of Low Deposit and No Credit Check. “Our deposit is $100, and for many, there’s no hard credit check. That makes it much less intimidating for people facing rejection.”
  3. Customer Education as a Core Focus. “About 65% of our customers say they had no financial education. So we focus on teaching them about interest, compounding, and managing credit.”
  4. Expanding Product Offerings to Keep Customers Engaged. “We were limited in what we offered. Now we’re focusing on products that meet customers where they are and help them keep growing financially.”
  5. Partnerships to Reach More Communities. “Regions Bank and Pathway Homes are some of our key partners — together, we’re helping more people build credit who might otherwise be left out.”

 

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Can cryptocurrency and blockchain drive fintech innovation? Stanford’s Lisa Nestor weighs in

cryptocurrency lisa nestor

Could cryptocurrency be the key to bridging financial gaps? Can it create a more inclusive global economy?

Digital assets like stablecoins and blockchain technology are reshaping how we think about money. Their potential to level the financial playing field is becoming clearer. In today’s episode of the Tearsheet podcast, I sit down with Lisa Nestor, Research Director at the Stanford Future of Digital Currency Initiative to discuss how fintech innovation is paving the way for broader financial inclusion.

Lisa’s expertise spans blockchain technology, cryptocurrency, and fintech innovation. This makes her a leading voice in understanding the intersection of these fields.

Lisa’s career reflects a deep commitment to financial inclusion. 

“When I started researching Stellar,” Lisa shares. “It brought together what I had seen [and demonstrated] the power of providing open-source financial infrastructure.” This passion for creating accessible financial systems has guided her work. It also included her current research on stablecoins and digital dollar adoption.  

Lisa explains how cryptocurrency, stablecoins, and blockchain can make finance fairer. Her insights show how these innovations affect cross-border payments and financial inclusion. She also discusses their role in the evolving fintech landscape.

Cryptocurrency and Financial Inclusion  

Cryptocurrency has the potential to address the uneven access to financial services worldwide. Blockchain technology allows people in underserved regions to access digital wallets and stablecoins.

With new financial tools, more people can save, transact, and even earn. “Access to financial services is not an even playing field,” Lisa notes. “Distributed ledger technology can help level that field. It can do so by providing accessible and stable financial options.”

Stablecoins: Beyond Trading to Real-World Impact

Stablecoins are already impacting cross-border payments and savings in regions with unstable economies. Lisa highlights Argentina as a case study. She says, “Argentina’s economic situation has created a huge demand for digital dollars, with stablecoins playing a crucial role in hedging inflation and providing financial security.”

Digital Dollar Economy and Cross-Border Payments 

Lisa emphasizes how digital dollars simplify cross-border payments, especially for regions with limited traditional banking infrastructure. “Being able to hold a stablecoin in a digital wallet and earning some yield on it is a small but significant step towards democratizing finance,” she says.

Tokenization of Real-World Assets

Another emerging trend Lisa identifies is the tokenization of real-world assets (RWA). Blockchain makes traditionally illiquid assets, like real estate and art, more liquid.

This opens up global markets. “This approach improves liquidity. It makes these assets move seamlessly across the globe,” Lisa explains.

Fintech Trends in Digital Asset Adoption  

Lisa explores CBDCs (Central Bank Digital Currencies) and private stablecoins. She looks at how governments and businesses are adopting digital assets. She also discusses the opportunities and challenges they face. “Most central banks are researching how to launch CBDCs without negatively impacting their banking industry,” she says. Lisa highlights a cautious yet growing interest in these tools.

The Big Ideas

1. Open financial infrastructure creates a global ledger accessible to all. “The idea is to create a ledger that every financial institution in the world can operate on but can’t buy. It is open and available to everyone.”

2. Stablecoins provide financial security in unstable economies. “In emerging markets like Argentina, stablecoins offer a way to hedge inflation. They secure savings amidst economic instability.”

3. Tokenizing real-world assets improves liquidity and global accessibility. “Tokenizing existing assets brings improved liquidity and global accessibility to traditionally illiquid markets.”

4. Governments explore CBDCs to complement existing banking systems. “Central banks are focused on introducing CBDCs that complement. Rather than compete with, existing banking systems.”  

5. Digital dollars empower individuals in the gig economy. “More individuals are earning in digital dollars through online work. This is creating new economic opportunities without physical migration.”  

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