Solving the SME global payments gap to unlock new markets and mitigate risk

Whilst the full impact of the conflict in the Middle East may take months, if not years, to become clear, the uncertainty it has caused has already had major economic effects across the globe. Oil prices initially jumped 10% as events gathered pace, whilst gas prices surged by around a third. As the accessibility of key international shipping trade routes, including the Strait of Hormuz, remains uncertain, global supply chain costs are likely to rise, impacting both businesses and consumers.

Even before the conflict across the Middle East ignited at the end of February, today’s business landscape was incredibly complex—especially for small and medium-sized enterprises (SMEs) with an ambitious eye on expansion. In an increasingly globalised economy, these organisations face constant pressure to keep pace with their competitors and drive growth.

Geopolitical shifts and ongoing tensions around tariffs continue—the US has suggested it could introduce a global 15% tariff—and are fuelling a volatile trade environment. These shifts remind business owners that concentration in the supply chain is risky; it can create a single point of failure for buying, building, or selling their goods and services.

A growing appetite for new markets
Apple is just one example of a company that has overhauled its supply chain, moving production of many of its products away from China to India and Vietnam. This is part of what has become known as the ‘China Plus One’ strategy, where companies are diversifying supply chains by stepping into ‘connector’ economies like Vietnam to complement existing operations in China.

SMEs follow such trends and are entering new jurisdictions in an effort to increase revenue and diversify risks. Expanding into new regions allows them to access larger customer bases, boost brand recognition, and improve profitability. It enables them to tap into new talent as well as new suppliers; in volatile periods, this agility can be key to ensuring continued access to supply chains.

Research from Mastercard reveals this appetite for agile growth, with half (50%) of SME respondents saying they have expanded internationally, while two-thirds (65%) plan to source more suppliers, partners, and workers globally to make their operations more robust.

There are also cost pressures driving the expansion into new markets. The Chartered Institute of Procurement and Supply (CIPS) has previously warned that due to the spiralling cost of transport, energy, and raw materials, consumer goods prices will soar during 2026, with over a fifth (22%) of supply chain businesses reporting that shipping costs have increased by more than 10%. Given this forecast was made before the recent conflict that has rapidly spread across the Middle East, these may end up being conservative estimates.

Understanding the payment pain points
In this landscape, securing value from suppliers and maximising margins is critical. Against a backdrop of rising expenses and shifting tariffs, having reliable access to new markets—both for suppliers and customers—has become more important than ever. Streamlined international payments play a prominent role in helping SMEs to scale and compete effectively.

Cross-border payments will provide the foundations for the future business world, with Boston Consulting Group estimating they will exceed $250 trillion by 2027, representing a $100 trillion increase over the course of a decade.

As supply chain costs rise and economic uncertainty rumbles on, SMEs need payment solutions that offer stability and certainty. They must increase their margins wherever possible in order to stay ahead of their competition, and for those operating internationally, reducing foreign exchange (FX) risks and costs is seen as a significant step. Faster, simpler, and more cost-effective cross-border payments can underpin smoother global supply chains and ensure that businesses can confidently transact in new markets.

Answering the call for new solutions
However, despite the fact that SMEs account for around 90% of businesses globally, their needs still are not being met. They are typically reliant on their banks for critical high-value transfers; however, this may not always be the best option, particularly for small businesses that rely on agility. Too often, these payments are opaque, slow, or costly, hampered by unpredictable delays and hidden fees. Slow settlement leads to lost opportunities, fast settlement means opportunities won, steady cash flow, and compounding growth.

According to the Financial Stability Board (FSB), the average cost of international retail payments remains high. For nearly a quarter of global payment corridors, costs exceed 3%. That’s $30,000 out of every million transferred, vanishing into a black hole of opaque fees. Furthermore, one-third of retail cross-border payments took more than one business day to be settled in 2024.

Solving these issues has emerged as a priority, with the FSB developing its G20 cross-border payments roadmap to address the frictions that result in high costs, low speed, and limited access. 

SMEs urgently need new propositions that align with these goals. To operate effectively at a global scale, they need to partner with payments providers who can offer a more personalised service and advice on entering new markets. They need multi-region treasury management, true local multi-currency access, and rapid and reliable settlement across borders. Recent events have made this more critical than ever.