By Pooja Sharma
today
UAE B2B SME Alternative Investment Bank
The study reveals the key trends shaping the UAE SME market and how issuing banks can tailor business solutions to address SME financing needs.
Around 49% of UAE SMEs identify contactless payment adoption as a key area of investment to meet consumer expectations.
New research from Visa, the SME Megatrends report, takes a closer look at the ever-changing landscape of small and medium-sized enterprises (SMEs) in the United Arab Emirates (UAE). As SMEs undergo major transformation, particularly in the digital and financial realms, the report identifies how issuing banks can leverage the needs and challenges facing businesses to unlock new revenue opportunities, gain competitive advantage and impact the outlook for SME growth and scalability.
Regulatory policies, funding and digital transformation initiatives are strengthening the local business environment and creating new opportunities for UAE businesses. In this dynamic environment, SMEs are quickly embracing digital possibilities, by expanding their online presence to attract new customers, adopting contactless and digital payments to stay competitive, and incorporating digital business tools to optimize their business operations.
The rapid acceleration of digitization in the region’s SME sector provides a wealth of new revenue opportunities for issuing banks. By facilitating access to critical financial products and services, banks can capitalize on this potential, leading to a broader customer base, increased transaction volumes and improved revenue prospects. By partnering with Visa, issuing banks can offer bespoke financial products tailored to the unique needs of SMEs, actively fostering inclusive economic growth.
Salima Gutieva, Vice President and Country Manager, UAE, Visa said: “At Visa, supporting SMEs is not just about enabling transactions, it’s also about enabling transformation. SMEs are the backbone of economies around the world and play a critical role in driving growth, innovation and jobs. In a rapidly changing environment, it is imperative that issuing banks have a deep understanding of their needs and develop targeted solutions that drive the SME sector forward.”
“We believe the SME Mega Trends Report will help issuing banks tailor their offerings to better meet the needs of SMEs in the market. By identifying ways in which issuing banks can provide important financial products and services to SMEs, Visa is working together to foster economic growth. This effort will not only help SMEs thrive, but also contribute to new pathways to prosperity, delivering significant benefits to the economy as a whole.”
In the UAE, the following have been identified as key SME megatrends:
Increasing desire for streamlined banking experience: UAE banks have taken significant steps to enhance the bank account opening process for SMEs, but it can still be difficult and costly. Need for easier access to credit to boost and optimize cash flow: Obtaining funding from banks can be a hurdle for SMEs due to short credit history, difficulty in providing collateral, interest rates, and administrative hurdles. The government has been proactive in supporting SMEs through regulatory changes and development funds in line with the UAE’s 2030 vision. Integration with social media platforms: SMEs are increasingly leveraging social media and e-commerce platforms to build their marketing presence and enter the digital economy. Contactless payments play an increasingly important role in the digitization of SMEs: As mobile payments and digital wallets expand in line with changing consumer behavior and payment patterns, 49% of SMEs in the UAE have accepted contactless payments as a key investment area to meet customer expectations. The UAE has seen a significant increase in the use of digital payments, with the penetration rate of in-store digital contactless transactions exceeding 90%. Increasing shift from cheques to digital payments: While cheques are still commonly used in the UAE, SMEs are moving towards lower-cost, faster digital payment options, driving demand for solutions such as Tap to Phone and Visa Direct for cross-border transactions. Increasing investment in SME digitisation tools: SMEs are increasingly digitising their financial processes and digital accounting software with invoice and expense management platforms, but 74% of SMEs still rely on manual processes and basic communication tools.[3]
Increased interest in improving employee benefits: In the UAE’s competitive market, 86% of companies would offer additional employee benefits if they were more affordable, to attract and retain top talent.[4]
Strengthening the ecosystem and facilitating growth
Visa recognizes the critical role that small businesses play in driving economic growth and is committed to integrating them into the digital economy. Visa offers a number of payment services designed to help small businesses make and receive payments, including a range of solutions, including Visa Business credit and debit cards, rewards programs, business and payment management tools (including virtual cards), fraud and security services and product solutions such as Tap to Phone. Digital payment technology is considered fundamental to business growth.[5]95% of SMBs agree that adopting digital payments gives them as much or more value than they pay for it, and more than seven in 10 retailers consider such an investment to be critical to their business.
Leveraging its extensive expertise and partner network, Visa has already helped approximately 67 million small businesses globally digitize, exceeding its three-year goal of helping 50 million small businesses globally. This achievement underscores Visa’s deep expertise and the strength of its partnerships. Visa supports small businesses through platforms such as She’s Next, a global enablement program for women entrepreneurs, the Visa Everywhere Initiative for fintech startups, as well as financial education and business skills training, such as Practical Business Skills, a global digital platform that provides free educational resources.
Understand how issuers can capitalize on new opportunities in the UAE’s SME sector by expanding and customising financial products and services for businesses. Read Visa’s UAE SME Megatrends report here.
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