How Digital Payments Can Enable SMEs To Become More Competitive In The Post-Pandemic Era

Without a doubt, digital payments will be a key factor in enabling SMEs to become more competitive moving forward.

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By Bruno Martorano


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As early as 2017, when digital payments were in the early stages in mature markets, a World Bank report said that digital payments can be a boon for small businesses and micro entrepreneurs, especially for those in developing economies. Fast forward to 2022, when digital payments have grown exponentially across the globe with the rise of e-commerce transactions, setting up a digital payment infrastructure has become an even more compelling proposition for SMEs, given data from recent surveys and estimates by experts.

For instance, Visa's latest Global Back to Business study, which surveyed 2,250 small businesses in key markets such as Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore and the United Arab Emirates, found that 53% of the respondents said they already are, or plan to use only digital payments within the next two years. In the UAE alone, digital payment service providers estimate that 23% of total transactions in 2020 were made using digital gateways.

A PwC study, Payments 2025 and Beyond, forecasts a continued shift toward digital payments and a cashless society. In Dubai, the government launched the Cashless Dubai initiative last year that aims to develop ambitious programs and establish the necessary infrastructure to render the use of cash currency obsolete in the Emirate. For those seeking to remain in business in this part of the world, having a digital payment system is therefore an absolute necessity.

There are many digital payment service providers currently operating in the market. Entrepreneurs have a wide range of solutions or service options to choose from, depending on their budget and business objectives. The technology is essentially similar across the board, so business owners should look out for the intangibles, such as customer support and access to different payment gateways using a single platform to enable them to do business anywhere in the world.

Those who view digital payments with a cautionary look argue that security can be an issue. Indeed, data breach and privacy concerns are serious concerns, but providers have addressed these by incorporating enhanced security measures for their digital payment solutions to mitigate and even possibly eliminate the risks. As such, without a doubt, digital payments will be a key factor in enabling SMEs to become more competitive moving forward. Here are three ways entrepreneurs can leverage digital payments for future success:

1. Track performance and improve profit margins Using a digital payment system, small business owners can easily track daily sales as well as better manage inventories, thereby increasing their chances of improving profit margins.

2. Increase productivity Digital payments are part of a bigger automation initiative that large organizations are implementing to increase business agility. By automating certain business processes, digital payments save time and effort by reducing, even eliminating manual tasks such as data entry, processing paper invoices, and managing customer disputes, thereby increasing organization productivity and efficiency in the process.

3. Broaden customer reach and enhance sales potential A 2020 Mastercard study revealed that 73% of customers in the UAE shopped online, driven largely by restrictions during the COVID-19 crisis. However, experts estimate this buying behavior will continue in the post-pandemic era. Small businesses who want to reach out to more consumers, who are increasingly going online, will likely benefit from potentially better sales if they have a digital payment infrastructure in place.

Related: Go Big Or Go Home: More Middle Eastern Boldness Is Needed To Break "The Scale-Up Ceiling"

Bruno Martorano

CEO, Monty Finance

Bruno Martorano is the CEO of Monty Finance. With a solid 30 years of experience in the world of global business and management, Martorano is an expert strategic and effective leader in the field of finance and banking. As the founder and CEO of Castellamar Consulting Group in London and Kazakhstan, he has been helping in the implementation of holistic approaches and new management strategies to help drive businesses forward. He is currently a board member of MyMonty, part of Monty Group, where he is overseeing the implementation of fintech processes and strategies of the company.

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