Nearly all UAE SMBs now able to handle digital payments

More than eight in 10 small businesses expect customers will continue to prefer contactless payment even after vaccine rollout

The Covid-19 pandemic is encouraging businesses to deploy technologies that will boost the digital payments business from $4.4 trillion this year to $8.26 trillion in 2024, according to Statista. Courtesy NiumShow less

Ninety-seven per cent of small and medium-sized businesses in the UAE, compared to the global average of 83 per cent, adopted new forms of digital payment technology by the end of last year, according to a new report.

This trend is expected to continue in 2021 as consumers look for safer and convenient payment options due to the Covid-19 pandemic, Visa’s Back to Business report said.

More than four in five (86 per cent) of the UAE's SMBs expect customers will continue to primarily use contactless payments even after a vaccine becomes widely available.

“While there has been a sudden surge in e-commerce and digital payments due to the impact of Covid-19, our report suggests that these trends will continue to prevail in 2021, even as the vaccines become more widely available in the country and the wider region,” Shahebaz Khan, Visa’s general manager for the UAE, said.

The report, which surveyed 250 small business owners at companies with 100 or fewer employees in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, the UAE and the US in November, found that 44 per cent of UAE businesses had only begun offering contactless payments for the first time, and the same amount were offering contactless payment options more often.

SMBs are similar in terms of size and characteristics to SMEs, but differ by employment, with the former often relying on part-time workers or outsourced staff and the latter employing full-time workers.

UAE-based companies were the second-most likely globally to encounter customer concerns about fraud. Ninety four per cent encountered fears about the technology, compared to 96 per cent in Hong Kong and 70 per cent globally.

“We believe 2021 will place greater attention [on] security and fraud, and [the] trial of more emerging digital commerce tools that can help SMBs in the UAE thrive,” Mr Khan said.

Visa also surveyed more than 1,500 adults in the US, Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore and the UAE about buying habits.

Consumers in the UAE are the least likely to increase the amount of time they spend shopping in person (37 per cent, compared to 53 per cent globally) after a vaccine is widely available.

Consumers are also keen to have alternatives to handling cash, pens and keypads while shopping in-person. In the UAE, 74 per cent of consumers, compared to 47 per cent globally, said they will not shop at a store that does not offer a contactless way to pay.

Nearly 93 per cent of local customers now expect digital options when they shop in person. Tapping a credit or debit card is the preferred payment option (57 per cent), followed by payments through a mobile wallet (51 per cent) or mobile payment apps (44 per cent).

In a separate report on Wednesday, Mastercard said nearly 20 to 30 per cent of the Covid-related surge in e-commerce spending will be a permanent feature in the share of total retail spending in the Middle East and Africa region.

The company said 73 per cent of consumers in the region are shopping more online than they did before the pandemic.