RIYADH: Eight out of ten small-business owners in Saudi Arabia are optimistic for a recovery in 2021, following rapid digitalization during the coronavirus disease (COVID-19) pandemic, according to a new study by the global payment technology company Visa.
The majority of Saudi merchants (71 percent) surveyed said their investment in digital payments last year will play an important role in their business recovery. Eighty percent of small merchants said they intend to invest in new digital payment technologies.
The “2021 Small Business Recovery” study by Visa surveyed small and medium businesses in Saudi Arabia, the UAE, Egypt, and Pakistan to understand how they have evolved how they do business to manage the impact of COVID-19.
When asked about payment habits during the pandemic, 84 percent of the Saudi merchants surveyed indicated that contactless payments were now their customer’s preferred payment option, compared to 68 percent of merchants at the beginning of the pandemic.
Just under half of merchants surveyed (48 percent) said mobile wallets such as STC Pay, Mada Pay, and Hala Pay were the most preferred contactless payment options.
More than half (58 percent) of merchants surveyed said they are now offering home delivery services, while 60 percent are offering a pickup option. Fifty-four percent of respondents are implementing in-store self-help signage to meet the needs of safety-conscious customers and encourage social distancing.
When it comes to marketing activity, 53 percent of the merchants ran offers and promotions to attract and retain more customers. The majority of retailers (62 percent) established a digital presence in response to COVID-19 and almost two-thirds are confident that online shopping will remain a preference after the crisis has passed.
These findings highlight the shift of merchants to digital commerce and is consistent with recent figures from the Saudi Ministry of Commerce stating that, in the last year, more than 36,000 online stores were established, an increase of 171 percent over the previous year.
Ali Bailoun, Visa’s general manager for Saudi Arabia, said: “It’s encouraging to see that merchants are optimistic about business recovery in 2021 and the swift adoption of digital payments and recognition of what their customers want, whether it’s establishing a digital presence, offering a range of digital payment options, home delivery, or promotions has been pivotal in them shifting gears from survival mode to recovery.”
In January, official figures showed that digital payment transactions in the Kingdom jumped by 75 percent in 2020. As consumers turned to online and digital non-contact payments during the pandemic, the number of cash withdrawals carried out in 2020 across the Kingdom dropped by more than 318 million, or about 30 percent year-on-year. Non-cash transactions are expected to make up to 70 percent of all transactions by 2030.
Saudi anti-concealment law to protect consumers and small businessesDigital payments in Saudi Arabia surge by 75% amid pandemic