Contactless payments were a growing trend in Qatar even before the pandemic, thanks to high smartphone penetration and a high proportion of millennials. However, since the pandemic, almost all sectors, from healthcare to finance to education and retail, have had to shift to a digital-first mindset as consumers put COVID-19 safety measures at the top of their agenda. The crisis catapulted digital commerce six years into the future in just a few months, leading contactless and other digital payment options to emerge as more popular alternatives to cash.
Currently, contactless payments account for at least one-third of all face-to-face transactions in nearly 50 countries worldwide. This shows that the way people pay for their everyday purchases has shifted towards greater convenience and touchless technology. Globally, nearly two-thirds (65%) of consumers would prefer to use contactless payments as much or even more than they do now, and only 16% say they would return to their old payment methods after the pandemic.
In the midst of this dramatic shift in consumer habits, small businesses, already hardest hit by the economic downturn due to budget constraints, decreased consumer purchasing power, and lack of crisis preparation have had to make significant changes to meet consumer demands if they were to survive. This included expanding their eCommerce presence and accepting new forms of in-store contactless payments. Globally, 82% of SMB owners have updated their business operations to meet these new demands.
As a country that is considered one of the most advanced digital countries with tech-savvy and mobile-savvy consumers, Qatar is making great strides in adopting digital payments. When COVID-19 emerged, many banks in Qatar acted quickly to raise the PIN-free limit on their contactless debit and credit cards from QR 100 to QR 300.
Banks in Qatar have also launched a number of initiatives to enable consumers to make digital payments as conveniently and securely as possible. For example, Qatar Central Bank has launched its Qatar Mobile Payment System, which uses QR code technology to enable consumers to pay using their smartphones, and Dukhan Bank has launched a new Qatar Mobile Payment Service (QMP) via the mobile app as a cashless and cardless payment service to meet the growing digitally-driven financial needs of its customers. Similarly, SkipCash, a mobile payments technology company, is emerging as a major fintech company enabling both businesses and consumers to use contactless payments. The recent launch of Apple Pay in Qatar is another step that will encourage consumers to make more frequent cashless payments.
Driving digital commerce by empowering consumers and businesses with more payment options
The pandemic has given consumers more than one compelling reason to adopt contactless payments. As more consumers become comfortable with contactless payments, such as tapping a debit card instead of swiping and entering a PIN or using a mobile wallet instead of taking out a card, businesses must be equipped with the right solutions to meet the growing needs of these consumers or their preferred payment methods.
A recent study by Qatar Chamber showed that the value of the eCommerce sector exceeded $2.2 billion in 2020, up 47% from $1.5 billion in 2019. However, when looking at eCommerce payments, 75% of them are made by cash on delivery, 19% by credit card, and 6% by PayPal, which is a huge missed opportunity for small businesses that are not enabled to offer multiple payment options. That's why it's important to support small businesses with programs and solutions that help them increase efficiency and revenue. These include solutions for businesses that are making the transition to digital, improving their digital offering and accepting digital payments both online and in-store.
Consumers are becoming savvier with digital payments and have high expectations of merchants when it comes to providing them with the kind of experience they want. According to Visa findings, when shopping online, consumers prefer eCommerce sites that offer customer reviews, seamless refunds and a variety of payment options. For example, if eCommerce merchants could offer mobile point-of-sale (POS), more customers would conveniently and securely pay with their mobile wallet or card, and that would result in more sales for the merchant.
Since Visa's inception in 1958, Visa has been facilitating payments between consumers and businesses. Today, we have evolved into a global company that provides payment solutions for everyone, everywhere, as a trusted engine of commerce.
In Qatar, we are working closely with banks, fintechs, exchange houses and teclos to introduce low-cost digital payment acceptance, including solutions that do not require POS systems and can turn a merchant's mobile phone into a payment terminal. We are working with fintechs to co-develop digital solutions for businesses that they need to survive the COVID -19 crisis and thrive beyond.
As the country prepares to host one of the world's biggest sporting events, which will attract an influx of visitors from around the world, it is imperative that Qatar is equipped with a strong digital payments infrastructure to meet the expectations of local and global consumers for frictionless and secure payments. As a network that works for everyone, we are working closely with various players in the financial ecosystem to drive digital commerce for the benefit of consumers, businesses and the economy alike.
