If you’re buying from small shops and pop-up stalls in the UAE, you might have once expected to pay in cash, but this traditional approach has begun to change with the rise of digital payment apps. Increasingly, small and medium enterprises are adopting digital methods to keep up with their customers’ preferences and the changing landscape of commerce. The shift from cash to digital payments is not just a convenience but a necessity for many businesses that want to remain competitive and accessible.
Small and medium enterprises have long relied on cash or lengthy bank transfers to receive payments due mainly to limited resources. Setting up a point-of-service (POS) terminal to accept card payments comes with its challenges. Not only does it cost thousands of dirhams, but business owners must also meet specific qualifications, go through the sign-up process, and commit to recurring fees. This setup was often out of reach for many small businesses, especially those operating on slim margins or temporary setups such as pop-up stalls.
Challenges Faced by Small Business Owners
Young entrepreneurs like Shawki Zaitoun, a 20-year-old university student, have experienced these challenges firsthand. Zaitoun, who started founding small businesses as early as high school, consistently found payments to be a hurdle. According to Zaitoun, relying solely on cash payments would have made it difficult to break even at various events. Most students, his primary customers, typically do not carry cash, making digital payment solutions an essential component for successful transactions.
Running a student-operated business at events meant that Zaitoun did not qualify for the licenses needed to obtain a POS terminal for card payments. He faced the challenge of making his products accessible to a cashless generation without the traditional means of card acceptance. This situation prompted him to explore digital payment alternatives. His friends recommended trying out a digital payment app, which turned out to be a game-changer for his small venture. Customers welcomed the new payment method and were pleasantly surprised that such a small shop could accept digital payments.
Benefits of Digital Payment Apps
For many small business owners, digital payment apps have brought about significant changes in how they handle transactions. Unlike traditional POS systems, digital payment apps do not require significant upfront investments or ongoing fees, making them more accessible to small businesses with limited resources. Additionally, digital payments can enhance operational efficiency by reducing the time spent on handling and reconciling cash transactions.
Myrna Fandy, the founder of the hijab vendor Wove, faced similar payment issues. Many potential customers would inquire about card payment options, only to be disappointed when they couldn’t pay without cash. Fandy, who is also an interior designer, decided to try out several popular digital payment apps but encountered problems with long withdrawal periods and unresponsive customer support. Eventually, a friend recommended a different app, which she used during her store’s in-person pop-up events.
Initially, customers were hesitant to use the unfamiliar digital payment method. But over time, they adapted, and the app became a regular part of Fandy’s business operations. Reviewing her sales, Fandy realized she would have missed out on many customers if she had only accepted cash. She found the process of acquiring a physical card reader cumbersome due to the associated costs and maintenance.
The Future of Cashless Transactions
If you’re shopping at small stores and pop-up markets in the UAE, you might once have expected to pay with cash. However, this traditional method is evolving with the increased use of digital payment apps. Small to medium-sized businesses are turning to digital payments to adapt to customer preferences and the changing commercial landscape. The move from cash to digital payment methods isn’t just about convenience; it’s become essential for businesses to stay competitive and accessible.
Historically, small and medium enterprises (SMEs) in the UAE depended on cash transactions or lengthy bank transfers, primarily because they lacked the resources for more sophisticated systems. Implementing a point-of-sale (POS) terminal to accept card payments is costly, requiring thousands of dirhams. Business owners must also meet strict qualifications, complete a detailed sign-up process, and commit to ongoing fees. These requirements often excluded small businesses, especially those with slim profit margins or temporary setups like pop-up stalls. With digital payments, SMEs are finding new ways to thrive in a rapidly changing market.