Payment players benefited from Southeast Asia's digital economy exceeding USD300 billion GMV, driving demand for cross-border and digital payment services.

Auxiliary financial services in Singapore expanded 5.0% in 2025, according to industry estimates, as payment companies capitalised on robust regional spending fueled by Southeast Asia's accelerating digital economy. The growth places the sub-sector at the upper end of the Monetary Authority of Singapore's (MAS) Financial Services Industry Transformation Map (ITM) 2025 target of 4.0% to 5.0% value-added growth per annum for the overall financial services sector, underscoring the auxiliary segment's outsized contribution to Singapore's financial centre strategy.

Auxiliary Financial Services Growth in 2025

The 5.0% expansion in auxiliary financial services—encompassing payment processing, clearing and settlement, and related support activities—reflects sustained demand for non-bank financial intermediation services. This growth rate is closely aligned with broader financial sector metrics: bank lending to consumers and businesses grew 6.2% in 2025, while money supply as measured by M2 rose 9.5%, both indicative of an active credit and payments environment.

Annual Growth (%) (%)Source: Orionmano Industries

The auxiliary financial services segment's performance is notable given that the overall ITM target was set pre-pandemic and the sector has navigated a period of elevated interest rates and geopolitical uncertainty. The 5.0% figure suggests that non-bank payment infrastructure and service providers are capturing structural growth from digitalisation trends that extend beyond traditional banking cycles.

Payment Players as the Primary Driver

Payment gateway and aggregation companies were the busiest and most competitive segment within Singapore's payments ecosystem in 2025, according to market observers tracking activity, investor interest, and regulatory direction. The space saw heightened activity from global entrants including Stripe, Adyen, and Checkout.com, alongside regional players such as Xfers (Fazz), Nium, HitPay, and Thunes, all targeting small-to-medium enterprises and enterprise-grade merchants across Southeast Asia.

The underlying demand driver is unmistakable: Southeast Asia's digital economy is on track to exceed USD300 billion in gross merchandise volume (GMV) by 2025, creating significant transaction volumes that require payment orchestration, local acquiring, and cross-border settlement capabilities. Payment gateways serve as the critical infrastructure linking merchants to multiple payment methods across fragmented regional markets.

MAS policy initiatives have reinforced this growth trajectory. Project Nexus, a multilateral initiative to interconnect real-time payment systems across ASEAN and beyond, is advancing interoperability for cross-border transactions. Separately, MAS-led efforts on cross-border QR payment standardisation are lowering integration costs for payment aggregators and enabling merchant onboarding at scale. These regulatory tailwinds have made Singapore a natural hub for payment companies seeking to serve the broader region.

Regional Spending and Cross-Border Payment Trends

Real-time and cross-border payments are increasingly operational realities in Asia, supported by both public-sector collaboration and private-sector execution. Project Nexus represents a structural attempt to link domestic instant payment systems—such as Singapore's PayNow, Thailand's PromptPay, and India's UPI—into a seamless network, reducing friction for remittances and business-to-business payments.

Corporate initiatives are accelerating adoption. Visa's efforts to enable QR code payments across borders further drive uptake, allowing consumers and merchants to transact using familiar interfaces while settlement occurs in real time or near-real time. Such interoperability is critical in a region where digital wallet penetration continues to rise.

PwC's analysis indicates that enhanced availability and convenience of digital payments will see the bulk of the regional population leveraging mainstream digital financial products such as e-wallets, further expediting the expansion of financial services. This creates a virtuous cycle: as more consumers adopt digital payments, the addressable market for auxiliary financial services expands, justifying continued investment in payment infrastructure. PwC further notes that fostering merchant inclusion by lowering barriers to digitalisation is key to driving financial inclusion, particularly given that the majority of Southeast Asian businesses are small and medium-sized enterprises lacking digital readiness.

Broader Financial Sector Context

The auxiliary financial services growth of 5.0% occurred against a backdrop of easing monetary conditions in Singapore. The 3-month Singapore Overnight Rate Average (SORA) declined from 3.59% in Q3 2024 to 1.72% in Q3 2025, a reduction of 187 basis points. This loosening supported credit expansion: bank lending to consumers and businesses grew 6.2% for the second consecutive year, while M2 money supply expanded 9.5%, according to the MAS Financial Stability Review 2025.

The declining rate environment has dual implications for auxiliary financial services. Lower borrowing costs can stimulate consumption and business investment, increasing transaction volumes that generate fee income for payment processors. Conversely, net interest margin compression for banks may incentivise lenders to seek fee-based revenue streams, potentially intensifying competition in payments-adjacent services. For non-bank payment players, the key challenge remains managing cybersecurity risks and regulatory compliance costs as transaction volumes scale. PwC reports that only 21% of Singaporean companies have real-time detection capabilities for financial crime, indicating a clear gap that will require investment as digital payment adoption deepens.

Looking ahead, sustained growth in auxiliary financial services will depend on the continued expansion of regional trade and Southeast Asia's digital economy, as well as effective management of cybersecurity risks and regulatory costs for non-bank payment players. MAS targets for financial services value-added growth of 4.0%–5.0% per annum are ambitious but achievable if the region's digital infrastructure continues to mature and cross-border payment integration accelerates.