Nine in 10 UAE small businesses refine business models to cope with Covid-19

Nearly 44% have facilitated contactless payments for the first time, Visa survey finds

More than 90 per cent of the UAE merchants still have concerns about shifting their business online. Courtesy: Visa

Ninety-four per cent of small and micro businesses in the UAE, compared to 67 per cent globally, have reformed their business models since the Covid-19 outbreak began, according to a new survey by Visa.

Businesses in the Emirates have shown an “incredible willingness to evolve” in the face of the challenge, it added.

Nearly 44 per cent of the local businesses, more than double the global average, have facilitated contactless payments for the first time. Six in 10 businesses, compared to 33 per cent of global SMBs, reported their business has either accepted less  cash or stopped accepting it during the pandemic, the report showed.

“Historically, we have seen behaviour change at the point of sale as a gradual shift over time,” Shahebaz Khan, Visa’s general manager for the UAE, said.

“But Covid-19 has created an immediate need for safer, more efficient shopping experiences both online and offline as consumers rapidly migrate to digital commerce,” Mr Khan said.

However, despite their willingness to adapt to new trends, more than 90 per cent of UAE merchants still harbour concerns about shifting their business online (compared to 74 per cent globally).

The Visa report, which surveyed 250 small business owners at companies with up to 100 employees in the US, Germany, Canada, Ireland, Hong Kong, Singapore, Brazil and the UAE in June, said smaller businesses needed additional support to transition to digital channels.

The report found that businesses in the UAE are most concerned about data privacy and security (48 per cent), as well as keeping their employees safe and healthy (48 per cent).

Despite the unpredictable nature of the pandemic, almost 94 per cent of local businesses (67 per cent globally) feel optimistic about the future.

The California-based payments technology firm also conducted a separate survey in June – polling 1,500 individuals globally –  to assess the shift of consumers to digital commerce in response to the pandemic.

The survey found that nine out of 10 UAE consumers, compared to 63 per cent globally, would switch to buying from a store that has installed contactless payment systems.

Nearly 72 per cent of UAE respondents (48 per cent globally) said they would not shop at a store that only offers traditional payment methods.

Almost 90 per cent of UAE consumers have changed payment methods – including shopping online when possible (59 per cent), using contactless payments (52 per cent) and not using cash as much (40 per cent cent).

“Consumers are putting Covid-19 safety measures at the top of their shopping agenda and favouring businesses that do the same,” Mr Khan said.