Digital investment pays off for most UAE merchants, Visa survey finds

The majority of UAE merchants (82 percent) said their investments in digital payments had paid off and will play a major role in their business recovery.

The 2021 Small Business Recovery study surveyed small and medium businesses in the UAE, Saudi Arabia, Egypt and Pakistan to understand how they have evolved in the way they do business to manage the impact of the coronavirus on their bottom line.

The study also revealed the top spending trends merchants claim define the Covid-19 business environment – these include increased use of contactless payments (93 percent of merchants), takeaways (87 percent) and home delivery (78 percent).

Merchants in the UAE said they expect all of these spending trends to continue to grow post-pandemic.

When asked about payment habits during the pandemic, more than half of UAE merchants polled (60 percent) said contactless payments were the preferred payment option among their customers, up from only 18 percent of merchants who at the start of the pandemic said contactless payment was customers’ preferred option.

Nearly a third of respondents (31 percent) said they offered contactless payments as an option to respond to the growing demand for the payment option during the pandemic.

More than half (58 percent) of merchants surveyed said they began offering home delivery and pickup services during the outbreak.

More than half of UAE merchants polled (60 percent) said contactless payments were the preferred payment option among their customers

More than a third of retailers (38 percent) in the UAE that were surveyed said they have established an online presence in response to Covid-19 while 86 percent are confident that online shopping will remain a preference well after the crisis.

Shahebaz Khan, Visa’s general manager for the UAE, said: “It is encouraging to see that merchants feel optimistic about business recovery in 2021 and the swift adoption of digital payments and recognition of what their customers want – whether it is offering a range of digital payment options, home delivery or promotions – has been pivotal in them shifting gears from survival mode to recovery.

“UAE retailers are leading the way in showing how to translate insights into action and considering half of business owners (54 percent) are reliant on their small business as a primary or only source of income, this urgency is palpable.”

Shahebaz Khan, Visa’s general manager for the UAE

The experience of the pandemic has highlighted the need to future proof. In order to prepare for future uncertainties, 20 percent of UAE merchants surveyed who currently do not have an online presence said they are planning to build an e-commerce platform and a third are planning to offer contactless payments and digital prepayment options to customers.

Half (51 percent) of the merchants surveyed said they believe accepting digital payments is likely to increase their sales and 8 out of 10 (82 percent) said that accepting digital payments is an investment. In fact, merchants who only accept cash are planning to set up POS terminals within the next two years (28 percent) and invest in new digital payment technologies (31 percent).