Accepting digital payments essential for business growth: 87% of KSA retailers surveyed by Visa 

  • Visa’s Value of Acceptance study also reveals more than 70% of merchants surveyed in KSA saw increased revenue and higher customer footfall since accepting digital payments 
  • Nearly 80% of cash-only merchants surveyed plan on investing soon in digital payment technology 

Riyadh, Saudi Arabia, March 5, 2024: Visa (NYSE:V), a world leader in digital payments, has unveiled results of an independent study titled 'Value of Acceptance', which explores merchants’ attitudes towards digital payments and the impact of digital commerce on small businesses and retailers in Saudi Arabia.  According to the study, 87% of surveyed merchants surveyed that already accept digital payments claimed acceptance of payment methods such as cards and mobile wallets is an essential investment significantly contributing to their business growth. 

The survey gathered insights from two groups of KSA-based merchants - those who have accepted digital payments for 1-4 years, and retailers who exclusively deal in cash transactions. The top five store types represented in the survey sample include quick service restaurants, fuel stations, small grocery stores, laundry, and beauty salons/barber shops with sizes including nano (2 or less employees), micro (3-10 employees), and small (11-49 employees) businesses. 

According to the study, digital payments and cash together account for 99% of payments accepted among surveyed small businesses that accept both, with digital payments accounting for the larger portion.

Digital Payments: Business Growth Driver

The findings from Visa’s study show digital payment acceptance is an important driver in the growth of small businesses, with 75% of retailers surveyed claiming increased revenue and 74% seeing higher customer footfall from accepting digital payments. 

While digital payment-accepting merchants surveyed are aware of the associated costs with acceptance, 87% believe that the value and benefits derived from digital payment acceptance is at par with or exceed associated costs. In fact, 67% of retailers that accept digital payments are convinced of the overall value of digital payment acceptance, with 76% indicating a strong intention to further invest in new payment technologies in the future.  

Challenges with Cash Transactions 

While cash is associated with minimizing payment errors and easy refunds, more than 55% of cash-only merchants have lost a transaction because the customer was not carrying cash.  As a result, almost 80% of cash-only merchants surveyed plan on investing soon in digital payment technology so they can begin to offer consumers a better payment experience.  

Nearly 3 in 4 expect digital payment acceptance to increase both footfall and revenue. Other digital payment benefits cited by cash-only merchants include fulfilling the evolving payment needs of customers which makes businesses look more innovative.

Ali Bailoun, Visa’s Regional General Manager for KSA, Oman, and Bahrain, said: “As Saudi Arabia forges ahead with its ambitious digital commerce agenda, our 'Value of Acceptance' study underscores the transformative power of digital payments for Saudi’s retail sector. Embracing digital transactions not only aligns with the government’s Vision 2030 but also unlocks significant growth potential for small businesses as well as for the wider economy.” 

Bailoun added: “Beyond the benefits of security, speed, and convenience, digital payments also provide invaluable data insights. With more consumers turning to digital payments, this data can assist merchants in tailoring communication, targeting offers more effectively, implementing loyalty programs, and enhancing the overall customer experience, among other advantages. These aspects are instrumental in boosting business profitability, competitiveness, and efficiency.”

Merchant Expectations of Digital Payment Provider

Merchants that already accept digital payments expect a range of value-added services from their digital payments provider to enhance their payment infrastructure and offerings for customers. The most frequently cited include: (i) tips on securing payments (87%); (ii) better ways to communicate special offers to cardholders (84%); and (iii) sponsorship of local and global events to attract new customers (82%). Additionally, instalment payment options (38%), Multi-currency processing (37%), integration with accounting softwares (33%), and integration with invoicing systems (29%) were revealed as areas where payment providers can further add value to local businesses.

About the Study

Visa commissioned 4SiGHT Research & Analytics to explore the impact of digital payments on small retailers and gauge their level of openness to digital payment options among those currently accepting cash-only payments. 4SiGHT interviewed 250 nano, micro, and small retailers in December 2023 out of which 42% accepted cash payments only and 58% accepted cash and digital payments. The retailers surveyed were based in Riyadh, Jeddah, Dammam, Mecca and Madina. The face-to-face interviews took approximately 15 minutes and included a mix of nationalities and genders, representative of KSA.