Outdated payment systems are costing businesses in Singapore approximately US$7 billion in working capital.
This is the findings of a recent researxh by Airwallex and the Centre for Economics and Business Research, revealing that challenges surrounding the ‘Global Growth Tariff’ creates significant friction for businesses in Singapore which are managing cross-border payments.
The report found that such hurdles impact cash flow, increase costs and reduce operational efficiency.
As breakdown for the US$7 billion invisible cost on B2B commerce in Singapore:
- Payment failures and repair costs drain US$420 million annually. When B2B payments fail to process automatically, they may require manual intervention. These non-straight-through processing (STP) failures generate repair fees that cascade through supply chains.
- Foreign exchange spreads and correspondent banking fees erode approximately US$6.3 billion in business capital each year globally.
- The immobilisation of slow settlement cycles cost roughly US$220 million in working capital at any given moment in Singapore. This reduces the amount of productive liquidity available to businesses for growth, investment and operations.
