What’s the Key to Boosting SME Success in the UAE?
Visa's recent SME Megatrends report takes a deep dive into the changing landscape of SMEs in the UAE, especially in the digital and financial realms. The report highlights how issuing banks can capitalise on the needs and challenges faced by these businesses to unlock new revenue streams, gain a competitive edge, and boost SME growth and scalability.
In the UAE, regulatory policies, funding, and digital transformation initiatives are creating a fertile environment for businesses. SMEs are quickly embracing digital technologies to expand their online presence, attract new customers, adopt contactless and digital payments, and incorporate digital tools to streamline operations.
This rapid digitisation presents a huge opportunity for banks. By providing essential financial products and services, banks can tap into this potential, leading to an expanded customer base, increased transaction volumes, and better revenue prospects. Visa, in partnership with issuing banks, is focused on delivering customised financial products that meet the unique needs of SMEs, fostering inclusive economic growth.
Salima Gutieva, Vice President and Country Manager for Visa in the UAE, emphasised that empowering SMEs goes beyond enabling transactions—it's about driving transformation. SMEs are vital to economies worldwide, driving growth, innovation, and employment. In a rapidly evolving landscape, banks must understand SME needs and develop solutions that support their progress.
The SME Megatrends report aims to help banks tailor their offerings to better serve SMEs. By identifying how issuers can provide SMEs with vital financial products and services, Visa is working to support economic growth collaboratively, benefiting both SMEs and the broader economy.
Key trends identified in the UAE include:
Streamlined Banking Experience: While banks have made progress, opening a bank account for SMEs can still be challenging and expensive.
Easier Access to Credit: Financing remains a hurdle for SMEs due to short credit histories, collateral issues, interest rates, and administrative challenges. The government is supporting SMEs through regulatory changes and development funds aligned with the UAE’s 2030 vision.
Integration with Social Media: SMEs are leveraging social media and e-commerce platforms to enhance their marketing and tap into the digital economy.
Growing Role of Contactless Payments: With changing consumer behaviours, 49 percent of UAE SMEs are investing in contactless payments to meet customer expectations. Digital payment usage has surged in the UAE, with over 90 percent penetration of in-store digital contactless transactions.
Shift to Digital Payments: While checks are still used, SMEs are moving towards faster and low-cost digital payment options like Tap to Phone and Visa Direct for cross-border transactions.
Investment in Digitisation Tools: SMEs are increasingly using invoicing, expense management platforms, and digital accounting software, although 74 percent still rely on manual processes and basic tools.
Better Employee Benefits: To attract and retain top talent, 86 percent of UAE businesses would offer more benefits if they were affordable.
Visa recognises the crucial role of SMEs in economic growth and is committed to integrating them into the digital economy. Visa offers a range of payment services designed to help SMEs manage their finances, including business credit and debit cards, rewards programs, payment management tools, and fraud and security services. Digital payment technology is seen as essential for business growth, with 95 percent of SMEs acknowledging its value.
Globally, Visa has digitally enabled nearly 67 million SMBs, surpassing its goal of 50 million. This success highlights Visa's expertise and the strength of its partnerships. Visa supports SMEs through various platforms like She’s Next for women entrepreneurs and the Visa Everywhere Initiative for fintech startups, providing financial education and business skills training through the Practical Business Skills platform.
