Accepting digital payments essential for business growth: 86% of Bahrain retailers surveyed by Visa

Visa’s Value of Acceptance study also reveals more than 80% of merchants surveyed in Bahrain that accept digital payments saw increased revenue and higher customer footfall since accepting cards and mobile payments
Over 60% of cash-only merchants plan on investing soon in digital payment technology
Seventy-six percent (76%) of digital payments accepting merchants claim most customers prefer paying by card or mobile phone

Manama, Bahrain, 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 Bahrain. According to the study, 86% of surveyed merchants accepting digital payments claimed acceptance of payment through card and mobile wallets is an essential investment significantly contributing to their business growth.

The survey gathered insights from two groups of Bahrain-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, small grocery stores, mobile shops, tailors/shoe repair shops, and fuel stations 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 over 95% of payments accepted among 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 84% of retailers surveyed claiming increased revenue and 82% seeing higher customer footfall from accepting digital payments. Seventy-six percent (76%) of these merchants 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 digital payment acceptance, 63% believe that the value and benefits derived from digital payment acceptance exceed associated costs. In fact, 86% of retailers that accept digital payments are convinced of the overall value of digital payment acceptance, with 51% indicating a strong intention to further invest in new payment technologies in the future.

Challenges with Cash Only Transactions

While cash is associated with convenience, wide acceptance, and easy refunds, nearly 50% of cash-only merchants surveyed claim they lost sales opportunities due to customers not carrying cash. As a result, over 60% of cash-only merchants plan on investing soon in digital payment technology so they can begin to offer consumers a better payment experience.

Nearly 65% of cash-only merchants surveyed expect digital payment acceptance to increase both footfall and revenue as a result. Other digital payment benefits cited by merchants include making merchants look modern and innovative.

Malak Alsaffar, Visa’s Country Manager for Bahrain, said: “As Bahrain forges ahead with its digital commerce agenda, our 'Value of Acceptance' study underscores the transformative power of digital payments for Bahrain’s retail sector. Embracing digital transactions not only aligns with the Bahrain government’s cashless vision but also unlocks significant growth potential for small businesses as well as for the wider economy.”

Alsaffar added: “Beyond the benefits of security, speed, and convenience, digital payments also provide invaluable data insights. With more Bahrainis turning to digital payments, local merchants can tailor client communication with relevant offers, implement loyalty programs, and enhance the overall customer experience. This is vital information that can increase business competitiveness, profitability, 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) more secure and convenient B2B payments (75%); (ii) security tips (73%); and (iii) local & global event sponsorships (73%). Additionally, ¬ mobile payment acceptance (like Visa’s Tap to Phone solution) (68%); fraud detection and prevention (66%); multi-currency processing (59%); and online payments acceptance (55%) were revealed as key 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 the 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 38% accepted cash payments only and 62% accepted cash and digital payments. The retailers surveyed were based in Manama, and Riffa. The face-to-face interviews took approximately 15 minutes and included a mix of nationalities and genders, representative of Bahrain.