Kuwait City, Kuwait, 29 June 2020: The Kuwait Banking Association (KBA), and the world’s leader in digital payments, Visa (NYSE: V), today released findings of a survey on the impact of COVID-19 pandemic on the payment behavior of consumers in Kuwait. The survey also looks at consumers’ general views, preferences and concerns related to digital payments and offers key insights for merchants.
The survey release corresponds with the launch of Visa and KBA’s third annual “Stay Secure” social media campaign on Facebook (@VisaMiddleEast) and Instagram (@visamiddleeast and @KBAOnline) to promote safe digital payment practices. This year’s campaign comes at a time when more consumers in Kuwait increase their use of digital payments, and many opting to shop online for the first time to get what they need during this health crisis. The Stay Secure webpage has tips and educational videos, and information on security features of digital payments.
COVID-19: Impact on Consumer Shopping and Payment Behavior
Half of respondents surveyed in Kuwait have reduced shopping in-store since the outbreak of the pandemic and 44% are shopping online more. When they do shop at stores, 65% of respondents surveyed are using digital payments over cash with the majority using contactless cards (33%) and mobile wallets (38%) more. For respondents shopping more online, more than half (51%) use cards or digital wallets more to pay online over COD. Increased trust in the security of the payment technology, speed, convenience, wider acceptance and limited human contact, were the top reasons cited for their increased preference for digital payments.
The New Normal?
These shifts in consumer behavior caused by the pandemic are expected to be the “new normal” as more consumers gain confidence in digital payments. Fifty percent of consumers surveyed believe they will continue to use contactless payments more in-store post the pandemic and 46% said they will continue to opt for paying online with card or digital wallet more over COD.
Dr. Hamad al Hasawi, Secretary General of KBA, said: “The study shows that consumer behavior changes due to the pandemic – such as shifting online and increasing use of digital payments, are likely to continue even after the pandemic – an important take-away for businesses developing strategies for the post-COVID-19 consumer and market overall. We are pleased to partner with Visa on the ’Stay Secure’ campaign - a much needed and timely initiative - to help consumers protect themselves and offer merchants important insights for navigating the new normal of cashless commerce, which is a significant step forward in Kuwait’s digital transformation.”
Data Privacy, Biometrics and Mobile Wallets: General Attitudes and Concerns
On an average, up to 36% of respondents were comfortable sharing personal data with banks, travel agencies, and government owned entities and services. Contact information, name, official id, and demographic data were cited as data that needs to be protected the most. Fifty-nine percent find biometrics secure and for 53% biometrics is convenient to use. With regards to mobile wallets, 53% trust paying with them. Mobile wallets - such as Apple Pay and Samsung Pay - use Visa’s tokenization technology, which replaces sensitive card data, including the 16-digit card number, with a random number, also known as a “token”, to protect cardholders’ account information when paying in store or online.
Neil Fernandes, Visa’s Head of Risk for Middle East and North Africa, commented: “The pandemic has changed how consumers shop and pay as more rely on and prefer digital commerce. With increased usage both among experienced and first-time users, cybercriminals too are keen to capitalize on the increased activity and vulnerability, especially of first time online shoppers. That is why educating consumers about safe payment behavior is critical not only for the moment but as we move forward and adapt to the new normal. We are delighted to partner with KBA for another year to continue our mission of empowering consumers to continue using digital payments and online channels with full confidence.”
Gen Z vs The Rest
Interestingly, the findings also revealed significant differences in the behaviors of Gen Z (18-22 years) compared to the general population. For example, compared to non-Gen Z consumers (50% or less), a significantly higher proportion of Gen Z (more than 80%) consumers trust contactless cards as well as digital wallets payments. Also, a higher proportion of Gen Z consumers (63%) have abandoned their cart when faced issues related to authentication delays or failures versus non-Gen Z consumers (48%). And, to win trust of Gen Z consumers, it is essential for eCommerce websites to provide security icons on the browser, while for non-Gen Z consumers, verified customer reviews are required. With Gen Z entering the job market and their purchasing power expected to increase in the future, insights into their views and behavior are useful for businesses looking to cultivate long-term relationships with them.
Enhancing Online UX and Reducing Cart Abandonment: Key Insights for Merchants
More than half (51%) of Kuwait consumers surveyed have abandoned their online shopping cart because of authentication delays or failure. Of those who abandoned their carts, 44% try again after some time, 32% dropped the idea of purchasing the product altogether and 31% purchased from a nearby store. For 59% of respondents, an authentication process that doesn’t require them to enter one-time-passcode (OTP) for standard and recurrent transactions would be more convenient; 57% would trust a more seamless process.
Merchants seeking to deliver an enhanced online experience for customers can now adopt Visa Secure (previously known as Verified by Visa), an updated program to help make online payments more secure and seamless. It uses the latest EMV 3-D Secure (3DS) specification, which leverages fraud-detection intelligence working behind the scenes to verify cardholder identity and block unauthorized transactions.
The survey provides further insights on how merchants can build trust in eCommerce sites. The following emerged as the top “confidence builders” by consumers surveyed: displaying verified customer reviews (48%); offering a wide range of payment options (36%); offering payment options in local currency (33%); trust badges/security icons (33%); and ease of refunds (32%).
About Visa’s MENA research on Consumer Attitudes and Behavior Towards Card Security, 2020
Over 589 consumers comprising 81% Gen Z (18-22 years) and 19% non-Gen Z (23 years and above) were interviewed for 15 minutes each between April and May 2020. The respondents include Kuwaitis (67%), expat Arabs (20%), expat Asians (11%) and others – including Western expats (2%). 65% of the respondents were men and 35% were women. Respondents lived in Hawalli (32%), Al Ahmadi (22%), Al Farwaniyah (18%), Kuwait City (14%), Sabah as Salim (11%), and others (3%). Each had a banking relationship in Kuwait. The survey was conducted by 4SiGHT Research & Analytics.