Dubai: More than 50 per cent of consumers in the UAE hope to eliminate cash-based transactions entirely by 2024, more than 10 percentage points higher than the global average for consumers who feel the same way. Companies in the UAE, especially those in small and medium-sized spaces, are planning to join in moving away from cash during this period, in one of the legacies brought about by the pandemic in 2020.
In a survey conducted by payments company Visa, all small business owners surveyed in the UAE said they plan to accept some form of digital payment this year, including, of course, cryptocurrency. That’s compared to 82 percent of companies globally who shared the same sentiment. In addition, 35% of SMEs in the UAE are willing to accept alternative currencies such as Bitcoin.
“The digital capabilities small businesses have developed during the pandemic – from offline to e-commerce – have helped them pivot and survive, and by continuing to build on that foundation, they can now find new growth and prosperity,” said Shahbaz Khan, General Manager of Visa for Visa. Emirates, Bahrain and Oman.
Visa conducted the survey for the United Arab Emirates along with similar studies in the United States and Hong Kong as well as Germany and Canada. In total, nine markets were covered under Visa Back to Business Global Study – SME Predictions for 2022.
- 93% of UAE SMEs said they are optimistic about the future of their business, up 5% since the Return to Business 2021 study.
- The majority of small businesses in the UAE – 71% versus 59% globally – say they are already, or plan to be, cashless in the next two years.
- More than half of consumers in the UAE (versus 41% globally) plan to be cashless by 2024 and almost all consumers see the benefits of a cashless society.
- All small business owners surveyed in the UAE (versus 82% globally) plan to accept some form of digital payment in 2022, including cryptocurrency, with 35% (versus 24% globally) indicating they are willing to accept currencies such as Bitcoin. E-commerce-supported businesses: Among the small businesses with an online presence, almost all businesses in the UAE (99%) attributed their survival during the pandemic to e-commerce, which accounts for an average of 58% of revenue.
The fast-track pace of the move toward digital payment models accelerated during the early months after COVID-19 hit in early 2020 in most parts of the world. Two years later, those consumer habits are still stuck in digital mode.
94 per cent of consumers in the UAE said they would continue to use digital payment as much – or even more – in 2021. 96 per cent of surveyed SMEs (versus 74 per cent globally) said they accept new forms of payment Payments is “fundamental to their growth”. In other words, this means that “digital payments are no longer about pivoting and survival, but rather finding growth in new digital realities.”
“Payments are no longer simply about completing a sale,” Khan said. “It’s about creating a simple and secure experience that reflects an individual’s brand across channels and delivers a benefit to both the business and its customers.”
What’s in store
Companies would do well to come up with some form of cash payment options. More than two-thirds of consumers in the UAE say they have “abandoned” because digital payments are not accepted.
Digital payment options proliferate, whether through third-party platforms or directly from the digital applications that government departments roll out here. There is an entire ecosystem of apps and fintech companies bent on winning over more users for digital payments.
The Visa survey also found that due to ongoing supply chain issues, 69% of UAE consumers (compared to 59% globally) would like to purchase internationally. The survey found that “the most important factor cited for helping them feel more comfortable with international trade is positive customer reviews (55 percent)”.
However, the majority (96 percent) of SMEs in the UAE find it difficult to accept and process cross-border payments, which indicates the demand for faster and secure cross-border payment solutions.