Non-bank payment institutions capture growing share as fintech innovation drives SME cross-border payment volume.

Singapore SME Cross-Border Payments: A Billion-Dollar Market

Singapore SMEs channeled SGD 32.1 billion in cross-border payment flows through non-bank payment institutions in 2024, a figure that underscores the accelerating shift from traditional banking channels to fintech-driven platforms in the city-state’s role as a global trade hub. The SGD 32.1 billion figure represents flows handled exclusively by non-bank institutions, a segment that has grown at a compound annual growth rate (CAGR) of 18.3% from 2020 through 2024, according to industry estimates. For context, the global B2B cross-border payments market totaled $27.8 trillion in 2023, with banks still handling 92% of that value, per FXC Intelligence data. Singapore, as Southeast Asia’s premier trade and financial center, has become a bellwether for how quickly SMEs are embracing non-bank payment rails as alternatives to traditional correspondent banking.

The sheer scale of SME cross-border trade flows through non-bank channels in Singapore reflects both the city-state’s trade intensity—SMEs account for roughly 99% of Singapore’s enterprises and employ about 71% of its workforce—and the growing readiness of these smaller firms to move beyond incumbent banking relationships for international payments. While the SGD 32.1 billion represents only a fraction of Singapore’s total cross-border payment volume, the 18.3% CAGR signals a structural shift, not a cyclical one.

The Rise of Non-Bank Payment Institutions in B2B Flows

Globally, non-bank institutions accounted for 6% of B2B cross-border payment value in 2023, split roughly 2:1 between corporate flows and SME flows, according to FXC Intelligence. This share, while modest in absolute percentage terms, is growing quickly and is predominantly taking business from banks rather than from other non-bank players. As FXC noted in its September 2024 report, “many non-bank B2B-focused players [are] taking much of their new business from banks, rather than other competitors.” That dynamic is reshaping the competitive landscape in corridors critical to Singaporean SMEs, including trade lanes to China, India, Indonesia, and Malaysia.

The drivers are well-documented. SMEs have historically been underserved by traditional banks in cross-border payments, facing high costs, opaque fee structures, and slow settlement times. A 2024 analysis highlighted that Mexicans lost approximately $446 million in hidden fees on cross-border transfers that year—a pain point fintechs are addressing head-on by offering transparent fee structures and local currency accounts tailored to SME needs. Fintechs such as Wise Business and PayPal for Business enable small exporters and importers to transact internationally with pricing that is often more predictable than bank wire transfers.

%Source: Orionmano Industries

SME Segment: The Fastest Growing Frontier

The SME cross-border payments segment is projected to grow at the fastest CAGR in the cross-border payments market over the coming years, driven by fintech innovation and the proliferation of e-commerce platforms that enable small exporters and importers to transact globally with ease. Grand View Research identifies SMEs as “historically underserved in cross-border payments due to cost and complexity,” but notes that they are now “a focus of fintech innovation,” with platforms like Shopify, eBay, Wise Business, and PayPal for Business lowering barriers to entry.

Regulatory and infrastructure developments are reinforcing this trend. The migration to the ISO 20022 messaging standard is accelerating: as of August 2024, 26% of payment instruction traffic had shifted to ISO 20022 messages, with adoption gaining momentum globally. By the end of 2025, 80% of high-value settlements are expected to operate on ISO 20022, according to EY analysis. Singapore’s own payment infrastructure, MEPS, has already migrated to ISO 20022, mandating certain enhanced data fields that will improve straight-through processing and reduce manual intervention for SME payments. This standardization directly benefits SMEs by reducing transaction friction and enabling richer data exchange across payment chains.

At the same time, the G20’s cross-border payments roadmap continues to drive improvements in cost, speed, access, and transparency. The Financial Stability Board’s October 2024 annual progress report tracks specific KPIs for retail payments (including SME-relevant P2B and B2P payments) across speed, cost, and transparency, with weighted averages calculated based on IMF trade data. These targets include reducing the cost of cross-border payments to below 1% and ensuring that most payments settle within one hour—ambitions that, if met, would disproportionately benefit SMEs that lack the treasury infrastructure of large corporates.

The outlook for Singapore’s SME non-bank cross-border payment segment is therefore strongly positive. With a historical CAGR of 18.3% through 2024, the SGD 32.1 billion figure could double by 2028 if current growth trajectories hold, supported by continued fintech innovation, ISO 20022 adoption, and G20-driven improvements to the cross-border payment ecosystem. Banks will remain dominant in aggregate volume, but the SME frontier increasingly belongs to specialized non-bank institutions that have built infrastructure around the specific pain points of smaller traders.