Nearly 80% of Kuwait retailers see increase in revenue and customer traffic since accepting digital payments: Visa study

Visa’s Value of Acceptance study also reveals 68% of digital payment accepting Kuwait merchants surveyed say accepting cards and mobile payments essential investment for business growth
Nearly 30% of cash-only retailers lost transaction because customer not carrying cash
Seventy percent (70%) of digital payments accepting merchants claim most customers prefer paying by card or mobile phone

Kuwait City, Kuwait March 5, 2024: Visa (NYSE:V), a world leader in digital payments, has unveiled the 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 Kuwait. According to the study, nearly 80% of Kuwait merchants surveyed claim increased revenue and higher customer footfall from accepting digital payments.

The survey gathered insights from two groups of Kuwait-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 include small grocery, fashion/apparel, mobile shops, quick service restaurants, and beauty salons/barber shops with business sizes including nano (2 or less employees), micro (3-10 employees), and small (11-49 employees).

According to the study, among digital payment-accepting merchants both digital payments and cash together account for more than 95% of payments accepted among surveyed small businesses, with digital payments accounting for the larger portion.

Digital Payments: Business Growth Driver

The findings from Visa’s study show digital payments acceptance is an important driver in the growth of small businesses, with 68% of surveyed merchants accepting digital payments claimed acceptance of payment through card and mobile wallets is an essential investment significantly contributes to their business growth. Seventy percent (70%) of these merchants also claimed that most of their customers prefer paying by card or mobile phone.

While digital payment accepting merchants surveyed are aware of the associated costs with acceptance, 93% believe that the value and benefits derived from digital payment acceptance is at par with or exceed associated costs. In fact, 68% of retailers that accept digital payments are convinced of the value of digital payment acceptance, with 79% indicating a strong intention to invest in new payment technologies in the future.

Challenges with Cash Only Acceptance

While cash is associated with minimal payment errors and easy refunds, almost 30% of cash-only merchants surveyed have lost transactions as customers often do not carry cash. As a result, 66% of cash-only merchants plan on investing soon in digital payment technology so they can begin to offer consumers a better payment experience. Nearly 60% expect digital payment acceptance to increase both footfall and revenue.

Shashank Singh, Visa’s Vice President and General Manager for Kuwait and Qatar, said: “As Kuwait forges ahead with its ambitious digital commerce agenda, our 'Value of Acceptance' study underscores the transformative power of digital payments for the retail sector. We will continue to work with our local industry partners in bringing more Kuwait businesses into the digital economy so they can offer their customers the seamless, secure payment options they seek and deserve.”

Singh added: “Beyond the benefits of security, and convenience, digital payments also provide invaluable data insights. This data can assist merchants in 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 payments infrastructure and offering for customers. The most frequently cited include: (i) loyalty programs (76%); (ii) tips on security payments (75%); and (iii) better ways to communicate unique offers to cardholders (69%). Additionally, multi-currency processing (51%), online payment gateway integration (47%), fraud detection and prevention (40%), and mobile payment acceptance (like Visa’s Tap to Phone solution) (36%) 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 40% accepted cash payments only and 60% accepted cash and digital payments. The retailers surveyed were based in Kuwait city. The face-to-face interviews took approximately 15 minutes and included a mix of nationalities and genders, representative of Kuwait.