What do SMBs in Asia Pacific need to sell across borders?

Asia Pacific’s small and medium-sized businesses (SMBs) are setting their sights on international expansion. Across the region, 88 per cent of SMBs view cross-border sales as a top growth opportunity.¹ SMBs seek global growth for various reasons. By expanding internationally, they reach more consumers and drive economies of scale, tapping new sources of revenue and improving cost efficiencies. By venturing into multiple markets, SMBs may also help mitigate risk during economic downturns, helping them stay agile despite unpredictability.

As digital technology and consumer cross-border shopping trends evolve, the allure of global expansion for SMBs will only grow. By 2027, cross-border e-commerce in Southeast Asia, South Korea, and Japan will hit a combined value of US$148.1 billion.² However, despite the promising prospects, SMBs encounter several hurdles when venturing into international markets.

What’s stopping SMBs from going global

One of the most challenging aspects for SMBs going global is regulations. In a survey of Asia Pacific SMBs, 35 per cent cited a lack of legal, regulatory, compliance, and tax support as a major issue in overseas expansion.³

Payment regulations can also vary widely across markets including licensing requirements and anti-money laundering regulations. SMBs need a certain level of expertise when navigating these regulatory differences. 

In addition to regulations, SMBs also need to navigate diverse payment systems and preferences in multiple markets. Each market has its preferred payment methods, from traditional bank transfers to digital wallets, which can make it hard for SMBs to optimise payment processes. This challenge is often compounded by a lack of knowledge or access to information about new markets, a concern expressed by 34 per cent of Asia Pacific SMBs surveyed.⁴

In global markets, the fragmentation of international B2B payments can also impact SMBs, especially those involved in global supply chains. Inefficient payment processes, such as manual invoicing, paper-based transactions, and lengthy payment cycles, disrupt the flow of goods and services. This leads to delays, errors, and increased operational costs. Moreover, the prevalence of cash transactions in certain markets exacerbates these issues. In 2023,  cash was used in over half of B2B payments in the Asia Pacific region.⁵ SMBs in industries with high transaction volumes or high-value transactions frequently encounter difficulties when manually handling these payments.

How the digital payment ecosystem can help SMBs break international barriers

To help SMBs, the digital payment ecosystem, particularly fintech companies, governments, and financial institutions, can offer support and spur global expansion.  

Fintech companies, including multi-national digital platforms often have the capabilities to help SMBs enter new markets rapidly and securely through well-developed merchant platforms. These platforms accommodate diverse payment options, from digital wallets to cards, enabling SMBs to cater to consumers' preferences across the globe. Payments are safeguarded by robust fraud prevention tools, which means that confidential consumer information stays safe. Moreover, digital platforms often offer integrated logistics solutions and built-in marketing tools, ensuring timely order fulfilment and effective marketing campaigns that drive traffic and making it very easy for SMBs to get up and running in international markets. 

SMBs also have the potential to reach more consumers by harnessing global payment networks like Visa. These networks offer widely accepted cards and payment solutions, ensuring seamless transactions at home or abroad. This wide acceptance not only enlarges SMBs' consumer base but also elevates their visibility and credibility. With the established global presence of payment networks, SMBs can inspire trust with consumers worldwide, fuelling international growth.

Take Visa B2B Connect , a multilateral payment platform, as an example.⁶ Backed by Visa and supported by financial institutions, it speeds up global B2B transactions among banks, boosting payment transparency and predictability for SMBs. Another case is Visa teaming up with SAP  in 2023 to incorporate embedded finance solutions into SAP’s platforms  for B2B payments, making it more efficient for businesses including SMBs to transact digitally.⁷ This move automates payments further, making it easier for businesses to trade internationally with confidence.

Making selling as easy globally as it is locally

Governments and regulators also play a key role in supporting SMBs as they expand from local to global markets. Policies and regulations, such as ASEAN’s Regional Comprehensive Economic Partnership (RCEP), can help streamline cross-border commerce. Launched by ASEAN nations, China, Japan, South Korea, Australia, and New Zealand in 2022, the partnership optimises digital trade, data localisation, and cybersecurity frameworks, shaping a more conducive digital trade environment for SMB e-commerce and digital payments adoption.⁸

Additionally, financial incentives and digital infrastructure investments facilitate cross-border payment innovation. These unlock more resources for financial institutions and fintech companies to develop solutions that meet SMB expansion needs. Innovative solutions will enhance cross-border payments for SMBs, thus paving the way for international success and fulfilling their growth aspirations.

¹ Visa, Unlocking growth opportunities for small and medium-sized businesses (SMBs) with digital payments, 2024.

² Visa, Unlocking growth opportunities for small and medium-sized businesses (SMBs) with digital payments, 2024.

³ UOB, UOB Business (SME & Large Enterprises) Outlook Study 2023, 2023.

⁴ UOB, UOB Business (SME & Large Enterprises) Outlook Study 2023, 2023.

⁵ Atradius, B2B payment practices trend, Asia 2023, 2023. 

⁶ Visa, Visa B2B Connect – Global payments through a single connection, 2019.

⁷ Visa, Visa and SAP join forces to make enterprise payments more efficient, 2023. 

⁸ Tech for Good Institute, How the world’s largest FTA will impact Southeast Asia’s digital economy, 2022