ASEAN’s evolving trade landscape is creating significant financial challenges, with a new report from Payoneer revealing that businesses across Vietnam, Thailand, Malaysia, Indonesia, and the Philippines are losing an estimated $2.5b annually due to inadequate payment infrastructure. As tariffs on China-origin goods reshape trade flows, these countries have become key manufacturing and export hubs, leading to complex cross-border payment needs.
The report highlights two major pressure points contributing to this financial leakage. Firstly, foreign exchange (FX) conversion and payment costs account for approximately $1.6b of the total exposure. Secondly, settlement delays and working capital drag result in an additional $930m in annual exposure, as funds can be tied up for extended periods.
Nagesh Devata, SVP of APAC at Payoneer, noted, “Trade diversification has opened a real growth opportunity for ASEAN SMBs, but many are still running it through payment infrastructure built for a single corridor.”
For Singapore businesses, which often serve as regional hubs, this issue is particularly pressing. The complexity of managing multiple currencies and payment corridors is a growing challenge. As ASEAN’s trade map is redrawn, Singapore’s small and medium-sized businesses (SMBs) are urged to adopt integrated financial infrastructure to mitigate these challenges.
Payoneer’s platform, designed to support multi-currency collection and faster disbursements, offers a potential solution. With Singapore’s robust financial ecosystem, local businesses are well-positioned to lead this shift. The future will depend on whether their payment systems can adapt to support new trade corridors effectively.
