Which digital payment will you choose today? Whether paying for government services or interacting in a purchase, UAE consumers prefer to let their smartphones and apps do the payments for them. Image Credit: Shutterstock

Dubai: More than 50 per cent of UAE’s consumers hope to ditch cash-based transactions altogether by 2024, more than 10 percentage points higher than the global average of consumers feeling the same way. Businesses in the UAE, especially those in the small and mid-sized space, plan to join the move away from cash during this period, in one of the legacies created by the pandemic in 2020.

In a survey by the payments company Visa, all small business owners surveyed in the UAE say they plan to accept some form of digital payments this year, including, of course, crypto-coins. This compares with 82 per cent of businesses that shared the sentiment globally. In addition, 35 per cent of SMEs in the UAE were willing to accept alternate currencies such as Bitcoin.

“The digital capabilities that small businesses built up during the pandemic – from contactless to ecommerce – helped them pivot and survive and by continuing to build on that foundation, they can now find new growth and thrive,” said Shahebaz Khan, Visa’s General Manager for the UAE, Bahrain and Oman.

Visa conducted the UAE survey alongside similar ones in the US and Hong Kong as well as Germany and Canada. In all, nine markets were covered under the Visa Back to Business Global Study – 2022 SMB Outlook.

  1. 93% of SMEs in the UAE said they are optimistic about the future of their businesses, up 5% since the 2021 Visa Back to Business study.
  2. A majority of small businesses in the UAE - 71% vs. 59% globally - say they already are, or plan to be, cashless in the next two years.
  3. More than half of UAE consumers (vs. 41% globally) plan to be cashless by 2024 and nearly all consumers see benefits of a cashless society.
  4. All small business owners surveyed in the UAE (vs. 82% globally) plan to accept some form of digital payments in 2022, including crypto, with 35% (vs. 24% globally) indicating a willingness to accept currencies such as Bitcoin. • eCommerce Buoyed Businesses: Of small businesses with an online presence, nearly all in the UAE (99%) attributed their survival through the pandemic to eCommerce, which accounted for an average of 58% of revenue .

Fuelling a switch

The fast-tracking seen in the move towards digital payment forms accelerated during the initial months after COVID-19 struck in early 2020 in most parts of the world. Two years on, those consumer habits are stuck in digital mode.

A staggering 94 per cent of consumers in the UAE said they will continue to use digital payment as much as - or even more than - in 2021. And 96 per cent of SMEs surveyed (against 74 per cent globally) said accepting new forms of payments is “fundamental to their growth”. In other words, it means “digital payments are no longer about pivoting and surviving, but rather finding growth in new digital realities”.

“Payments are no longer about simply completing a sale,” said Khan. “It’s about creating a simple and secure experience that reflects one’s brand across channels and provides utility to both the business and its customer.”

What’s in store

Businesses will do well to come up with some form of payment option to cash. Over two-thirds of UAE consumers say they have “abandoned a purchase” because digital payments were not accepted.

The digital payment options are proliferating, whether through third-party platforms or direct from the digital apps put out by government departments here. A whole eco-system of apps and fintech companies are intent on winning more users for digital payments.

The Visa poll also found that due to ongoing supply chain issues, 69 per cent of UAE consumers (compared to 59 per cent globally) are willing to buy internationally. “The most important factor cited to help them feel more comfortable with international commerce is positive customer reviews (55 per cent),” the survey finds.

“However, a majority (96 per cent) of UAE SMEs find it challenging to accept and process cross-border payments, demonstrating demand for faster and secure cross-border payment solutions.”