The pandemic has taught one major lesson to SMEs in the UAE – resilience through digital technology. Had they not adopted digital during the time of crisis, then the realization to set priorities for the year 2021 and beyond would have been impossible now. As per a detailed study done by VISA, almost 97 percent of the total Small & Medium Enterprises (SMEs) in the UAE were swift to adopt several new digital technologies in the past year, especially during the pandemic crisis. These companies mainly nailed the drastic changes in consumer behavior, hence, quickly adapted to the requirement, especially towards digital payments. Amazingly, this percentage has been against the global rate of 83 percent which shows how the COVID-19 reshaped the way businesses operated and are designed to operate in the coming years. It’s all about online businesses and digital mode of transactions B2B or B2C, all are gearing up for a big shift in their functional attributes. Taking a leaf from their own experience, SMEs in the UAE have set their priorities to move forward in their business goals. Surprisingly, they say that payments technology needs major attention as this is where the customers meet.
Let’s analyze their priorities towards roads to recovery in 2021
1. E-Payments or Contactless- Payments
As per the VISA survey, it was by June 2020 only that 44% of SMEs in the UAE started offering contactless payment transactions for the first time. Also, a similar proportion of SMEs is forthright about their choice for contactless mode of payments which they are rather using frequently even now. 73% of their total are confident to use it minimum for the coming three months. Worth mentioning is the part of the survey saying that more than four out of the five SMEs are very sure that their customers will prefer contactless mode of payments even though Corona vaccines will be readily available in the market. 37 percent of consumers will not choose to go shopping in-person even after vaccine becomes readily available, and this data stands against the 53% of global data for the same. The entire scenario shows that consumers and businesses, both, have realized the real potential of digital payment where technology plays the core role.
2. Meeting Consumers Where They Are
What a good sign of digital awakening? There’s been a significant 97 percent of the SMEs in the UAE who has undergone updated operations towards contactless payment transactions during the last three months, as compared to that of 94 percent of them during summer the previous year. Interestingly, these updations were required to meet the entirely new demand in the digital payment segment! On the Consumers’ side, they are also now more concerned about their safety protocols after having seen the wrath of COVID-19. They now prefer the contactless payment system like e-wallets, online payment like a credit card, debit card payment, and put safety as their topmost priority. Compared to the 65 percent of consumers worldwide, in the UAE alone 77 percent of consumers want to go for a contactless payment system only. They prefer touchless commerce now. In the last quarter of 2020, 62 percent of the total consumers had used digital payment for their requirements. This figure definitely reshapes the priority for SMEs to go for contactless payment to attract more customers.
3. Fraud Handling
Small & Medium Businesses in the UAE are very much concerned about the fraudulent activities in the digital mode of payment. They are prioritizing this part to look into rather seriously to gain customers’ confidence. About 94 percent of the SMBs have faced questions about fraudulent-scope and activities by customers directly. Although customers are very keen on adopting contactless payment, they are equally apprehensive, too, when it comes to the use of digital technologies. Hence, SMBs have made this issue the topmost priority for 2021 and beyond. They are confident to face this challenge with some strong cyber-security measures and data handling aspects.
Digital is the Only Answer & the New Normal
As Shahbaz Khan, General Manager, VISA, the UAE, speaks, “ Our report suggests that these trends will continue to prevail in 2021, even as the vaccines become more widely available in the country and the wider region. We believe 2021 will…….. trial of more emerging digital commerce tools that can help SMEs thrive.” Thus, we see how SMEs in the UAE have leveraged the power of digital technology to meet the consumers’ demand during the pandemic when all were confined to their homes respectively. These SMEs were the ones who invested in digital means and tools to sustain as well as to thrive despite challenges. They have directly seen, and experienced, the transition phase of consumers towards digital payment, and their wide preference for contactless payments even vaccines becomes common in the market. Basis all this, SMEs in the UAE have devised the above top three priorities thereby creating a new era for the consumers in the UAE.
It is good to see that many SMEs are taking a lead in digital adoption and discovering new models of business. We are keen to collaborate with SMEs in the UAE who are interested in exploring and scaling the new age digital payments solution for business growth.