Three out of four small businesses in the UAE say they feel optimistic about business recovery in 2021, according to a new study by Visa (NYSE: V), the world leader in digital payments. The majority of UAE merchants (82%) 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 (SMBs) in the UAE, KSA, 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% of merchants), takeaways (87%) and home delivery (78%). Merchants in UAE 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%) said contactless payments were the preferred payment option among their customers, up from only 18% of merchants who at the start of the pandemic said contactless payment was customers’ preferred option. Nearly a third of respondents (31%) 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%) of merchants surveyed said they began offering home delivery and pickup services during the outbreak. The study found that 4 in 10 retail merchants surveyed also implemented in-store self-help signage to meet the needs of safety-conscious customers and 1 in 2 merchants ran offers and promotions to attract and retain more customers.
More than a third of retailers (38%) in the UAE that were surveyed said they have established an online presence in response to COVID-19. Nearly 9 in 10 (86%) are confident that online shopping will remain a preference well after the crisis.
Commenting on the findings of the “2021 Small Business Recovery” study, 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%) are reliant on their small business as a primary or only source of income, this urgency is palpable. At Visa, we continue to work in lockstep with our bank and industry partners to support local merchants’ recovery needs.”
The experience of the pandemic has highlighted the need to future proof. In order to prepare for future uncertainties, 20% of UAE merchants surveyed who currently do not have an online presence said they are planning to build an eCommerce platform and a third are planning to offer contactless payments and digital prepayment options to customers. Half (51%) of the merchants surveyed said they believe accepting digital payments is likely to increase their sales and 8 out of 10 (82%) 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%) and invest in new digital payment technologies (31%). While the majority of merchants recognize the importance of digital acceptance, more than half (51%) of surveyed merchants showed interest in low cost acceptance solutions.
Madhur Mehra, MENA Head of Merchant Sales & Acquiring, Visa, said: “At Visa, our top priority is to help small businesses keep pace and adapt to operate in a world that is rapidly evolving. These findings give us insight into what the barriers are for merchants as they transition to digital and reinforce our strategy to provide practical help for SMBs to access a trusted pool of educational tools and technologies such as low-cost acceptance solutions. As a trusted engine of commerce, Visa intends to continue to roll out new programs and resources that address the pain points of SMBs and help them embrace digitization and thrive in the new normal.”