Holding the reins on AI: Emerging lessons from small business solutions

At face value, “jineteo” is a straightforward word, translating to “horse riding” in Spanish. But in some places, the word means much more. For restaurants in Colombia, jineteo refers to the improper handling of money, typically by waitstaff, such as charging a customer for a coffee they didn’t order and then pocketing their payment in cash. In this case, jineteo takes on a figurative meaning: riding money for personal gain. Nuances like these are often overlooked when artificial intelligence (AI) is developed without a local perspective.

For small businesses, ensuring these local nuances and perspectives are embedded within AI solutions is crucial, enabling them to gather meaningful insights about their operations and make informed decisions. And it’s one of the key insights that Mastercard Strive is using to support small businesses with AI-enabled solutions.

Across the globe, our partners are building and testing AI-powered solutions to support small business owners to get capital, go digital, and grow networks and know-how:

• In Colombia, our partner Datasketch is equipping Colombian small businesses with tools to harness the power of their own data, such as the data that is captured in their point-of-sale systems. Delivered via an AI chatbot, Datasketch’s solution offers real-time visual dashboards with key business metrics so small businesses can make informed decisions, like understanding whether their waitstaff are pocketing restaurant funds.
• In the Philippines and Cambodia, our partner Boost Capital is developing AI-enabled solutions that support financial onboarding and know-your-customer processes, streamlining the credit application process for small businesses.
• In the U.S., our partner Accessity’s SmartLend solution utilizes historical lending data and AI tools to simplify and expedite the loan application and underwriting process for entrepreneurs.
• In the EU, our partner Planethon has built Ragna, a conversational AI-powered guide for all things sustainability, guiding small business owners in sourcing best practices, preparing for climate risks, and understanding regulatory demands.

These are just a few examples of how Mastercard Strive and our partners are equipping small businesses with innovative solutions that drive inclusive growth. While many of these AI-enabled solutions are relatively new in our portfolio, external evidence suggests that AI has the potential to drive some positive outcomes for small business users.

For instance, in the US, small businesses report that the use of AI is leading to enhanced resilience and increased efficiency. In one survey, small business respondents reported that AI has had a positive impact on their cybersecurity capabilities (48%). In another, small businesses using AI were 12 percentage points more likely to experience profit growth and 7 percentage points more likely to experience sales growth compared to non-AI users. In China, research on AI-enabled training on e-commerce platforms found positive impacts on small business revenues.

However, without the right support, AI tools may contribute to disparities between small businesses. For example, in Kenya, while research on AI-generated advice for entrepreneurs found no average effect, high performers in their sample improved by over 20% with AI advice. By comparison, low performers did about 10% worse, depending on how they applied the advice. High performers utilized the AI tool to identify tailored and specific changes that benefited their businesses, whereas low performers were more likely to implement generic advice. There’s also growing concern about the global gender gap in AI use and its effects on women.

Insights on developing AI-powered solutions for small businesses

A responsible, inclusive approach to developing AI solutions for small businesses is essential for Mastercard Strive and the Center for Inclusive Growth more broadly. Our partners are being cautious, going slow, keeping humans in the loop, and sharing what they are learning, including:

• Enabling the localization of AI solutions better supports small business users. AI solutions that incorporate local languages, contexts (hello jineteo!), and needs into their development increase their relevance in the daily lives of small businesses and foster trust. For example, in the Philippines, Boost Capital identified a local challenge due to the large variety of government-issued IDs that can be used for Know Your Customer purposes. To address this, Boost Capital built a custom AI solution for ID verification so all types of IDs can be verified.
• Simple, user-centered AI solutions are necessary for small businesses. Our partners have found that small businesses’ needs and feedback must be factored into AI solution development. A simple design, coupled with a clear use that is valued by small businesses — such as a clear return on investment and a solution that is directly relevant to their work — tends to drive greater adoption. However, a simple front-end for small businesses often requires a great deal of sophistication on the backend architecture and UI-UX.
• To build trust with small businesses, keep a human engaged and be transparent about AI use. For example, our partner &frnds use their local network of trusted sales agents to support their AI-enabled ordering solution for women micro-retailers in the Philippines, delivered via a chatbot. &frnds’ AI chatbot interacts with micro-retailers to clarify the products she requires and submits the order into the wholesaler’s ordering system. The local sales network plays a key role in “teaching” the large language model by designing approval flows whereby AI-generated messages that do not pass &frnds confidence levels are manually confirmed or corrected before they are sent onwards to the micro-retailer.

As we continue to explore the potential of AI for small business growth, the path forward requires more than just rapid innovation. Local understanding, human-centered design, and a commitment to inclusive practices are necessary. By maintaining a localized, responsible approach that keeps humans at the center of our AI development, Mastercard Strive and our partners are working to ensure every small business can effectively leverage AI-enabled solutions.