Digital-savvy small businesses upbeat on a swift rebound

Three out of four small businesses in the UAE are optimistic about a recovery in 2021 from the pandemic-induced slowdown, according to a new study by Visa.

A vast majority of UAE merchants (82 per cent) surveyed said their investments in digital payments had paid off and will play a major role in their business recovery.

The study shows that 86 per cent of retailers surveyed expect e-commerce to continue to grow post-pandemic period while 60 per cent of merchants said contactless payments is their customers’ preferred payment option, up from 18 per cent at the start of the pandemic. Nearly a third of respondents (31 per cent) said they offered contactless payments as an option to respond to the growing demand for the payment option during the pandemic.

Shahebaz Khan, Visa’s general manager for the UAE, said 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 per cent) are reliant on their small business as a primary or only source of income, this urgency is palpable.”

Another significant trend that was revealed by the “2021 Small Business Recovery” study is that cash usage has dropped – only seven per cent of merchants surveyed said cash was customers’ preferred payment option, down from around 20 per cent at the start of the pandemic.

The study also revealed the top spending trends merchants claim define the Covid-19 business environment. These include increased use of contactless payments (93 per cent of merchants), takeaways (87 per cent) and home delivery (78 per cent). Merchants in UAE expect all of these spending trends to continue to grow post-pandemic.

More than half (58 per cent) 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.

Madhur Mehra, Mena head of Merchant Sales & Acquiring, Visa, said the findings of the study give Visa 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.

— issacjohn@khaleejtimes.com