KSA consumers go cashless as trust in digital payments surges amid COVID-19: Visa-mada survey

Riyadh, Kingdom of Saudi Arabia, 14 June 2020: The Saudi Payments Company – Mada, and Visa (NYSE: V), the world leader in digital payments, today released results of a survey on the impact of the COVID-19 pandemic on payment behavior of consumers in Saudi Arabia. The survey also looks at consumers’ general views, preferences and concerns related to digital payments and offers key insights for merchants.

The survey release corresponds with the launch of Visa and mada’s third annual “Stay Secure” social media campaign on Facebook (@VisaMiddleEast) and Instagram (@visamiddleeast and @mada_payments) to promote safe digital payment practices. This year’s campaign comes at a time when more consumers in Saudi increase their use of digital payments, and many opting to shop online for the first time to get what they need during this health crisis. The Stay Secure webpage has tips and educational videos, and information on security features of digital payments.

COVID-19: Impact on Consumer Shopping and Payment Behavior
Sixty-six percent of respondents in Saudi have reduced shopping in-store since the outbreak of the pandemic and 48% are shopping online more. When they do shop at stores, 77% are using digital payments over cash with the majority using contactless cards (56%) and mobile wallets (60%). For respondents shopping more online, the majority (62%) use cards or digital wallets to pay online over COD. Increased trust in the security of the payment technology, speed, convenience and limited human contact, were the top reasons cited for their increased preference for digital payments.

The New Normal?
These shifts in consumer behavior caused by the pandemic are expected to be the “new normal” as more consumers gain confidence in digital payments. Fifty-four percent of consumers believe they will continue to use contactless payments in-store post the pandemic and 44% said they will continue to opt for paying online with card or digital wallet over COD.
Ziad Al Yousef, Managing Director of Saudi Payments, said: “The study shows that consumer behavior changes due to the pandemic – such as shifting online and increasing use of digital payments, are likely to continue even after the pandemic – an important take-away for businesses developing strategies for the post-COVID-19 consumer and market overall. We are pleased to partner with Visa on the ’Stay Secure’ campaign – a much needed and timely initiative – to help consumers protect themselves and offer merchants important insights for navigating the new normal of cashless commerce, which is also a significant step forward in the Kingdom’s digital transformation journey as part of Vision 2030.”

Data Privacy, Biometrics and Mobile Wallets: General Attitudes and Concerns
Up to 50% of respondents were comfortable sharing personal data with banks, telecom operators, and government owned entities. Name, demographic data and contact information were cited as data that needs to be protected the most. 68% find biometrics secure and for 64% biometrics is convenient to use. 69% trust paying with mobile wallets such as Apple Pay and mada Pay. These wallets use Visa’s tokenization technology, which replaces sensitive card data, including the 16-digit card number, with a random number, also known as a “token”, to protect cardholders’ account information when paying in store or online.
Neil Fernandes, Visa’s Head of Risk for Middle East and North Africa, commented: “The pandemic has changed how consumers shop and pay with increased reliance on and preference for digital commerce. With increased usage both among experienced and first-time users, cybercriminals too are keen to capitalize on the increased activity and vulnerability, especially of first time online shoppers. That is why educating consumers about safe payment behavior is critical not only for the moment but as we move forward and adapt to the new normal. We are delighted to partner with mada for another year to continue our mission of empowering consumers to continue using digital payments and online channels with full confidence.”

Gen Z vs The Rest
Interestingly, the findings also revealed significant differences in the behaviors of Gen Z (18-22 years) compared to the general population. For example, Gen Z are less inclined to share their personal info with eCommerce sites with only 26% saying they would, compared to almost 46% of the rest. With regards to biometrics, only 55% of Gen Z respondents find it secure versus 74% of the rest. With Gen Z entering the job market and their purchasing power expected to increase in the future, insights into their views and behavior are useful for businesses looking to cultivate long-term relationships with them.
Enhancing Online UX and Reducing Cart Abandonments: Key Insights for Merchants
Almost half (48%) of Saudi consumers have abandoned their online shopping cart because of authentication delays or failure. Of those who abandoned their carts, 43% purchased from other sites, and 31% dropped the idea of purchasing the product altogether. For 70% of respondents, an authentication process that doesn’t require them to enter one-time-passcode (OTP) for standard and recurrent transactions would be more convenient; 67% would trust a more seamless process.
Merchants seeking to deliver an enhanced online experience for customers can now adopt Visa Secure (previously known as Verified by Visa), an updated program to help make online payments more secure and seamless. It uses the latest EMV 3-D Secure (3DS) specification, which leverages fraud-detection intelligence working behind the scenes to verify cardholder identity and block unauthorized transactions.

The survey provides further insights on how merchants can build trust in eCommerce sites. The following emerged as the top “confidence builders” by consumers: Ease of refunds (51%); displaying verified customer reviews (50%); offering a wide range of payment options (42%); trust badges/security icons (40%); offering payment options in local currency (37%); and, SSL certificate (34%).