Over half of Asia-Pacific SMEs rely on bank transfers

Instant payments reach 55% usage whilst debit cards account for 52% of spending.

Asia-Pacific’s (APAC) small and medium enterprises (SMEs) use electronic bank transfers the most for business expenses out of four other payment methods, despite demand for more options expanding.

Mastercard’s Dreamonomics Report found that SMEs use an average of four payment methods for business expenses, including electronic bank transfers used by 59%, instant payments by 55%, debit cards by 52% and credit cards by 47%.

Having multiple payment methods can give businesses more flexibility, but managing different accounts and funding sources can make cash-flow management and reconciliation more difficult.

“Businesses don’t think in terms of payment rails or funding sources. They think about paying suppliers, managing cash flow and keeping operations moving,” said Anouska Ladds, executive vice president, Commercial & New Payment Flows, APAC, Mastercard.

“Every business decision today has a financial dimension. SMEs need payment experiences that fit how they actually operate, giving them the flexibility to stay in control of their working capital, pivot faster to change and adapt to new trends and their customers’ needs,” Ladds said.

Whilst SMEs are adopting more digital tools, payment methods and artificial intelligence (AI), the growing number of systems is increasing demand for simpler and more integrated ways to manage their businesses, according to Mastercard.

The report further showed that 74% of APAC SMEs are optimistic about their business prospects, whilst 61% frequently experiment with new ideas. At the same time, 69% prioritise predictability and stability, close to the global figure of 68%.

APAC SMEs use an average of five business tools, with 94% interested in adopting at least one tool they do not currently use, compared with 89% globally. About 74% said integrated tools are critical to managing their day-to-day operations.

Demand for flexible payment options is particularly evident in India. Some 63% of Indian SMEs are interested in real-time payments, compared with 51% across APAC. 

Another 45% are interested in flexible digital payment solutions, whilst 39% are interested in a combined credit and debit business card with controls.

As businesses become more reliant on digital systems, security is also becoming a greater priority. 

Some 70% of APAC SMEs said protecting their businesses from cyber threats is a high priority, although only 39% currently use cybersecurity tools.

AI is also moving into routine business operations. Nearly three-quarters, or 74%, of SMEs said they are excited about its potential, with fraud and security protection the AI-powered capability most sought from financial providers, cited by 47%.