Outdated Payments Cost Singapore $7 Billion
Legacy cross-border payment systems are imposing a hidden tax on Singapore's businesses, tying up billions of dollars in working capital and reducing economic efficiency, according to new research released by financial technology firm Airwallex and the Centre for Economics and Business Research (Cebr).
The study estimates that companies in Singapore lose approximately $7 billion annually due to inefficiencies embedded in traditional international payment infrastructure. These costs stem from payment failures, foreign exchange spreads, correspondent banking fees and slow settlement processes that continue to characterise much of the global B2B payments ecosystem.
Airwallex has labelled the phenomenon the «Global Growth Tariff», describing it as the economic drag created by outdated cross-border payment systems. Globally, the report estimates that around $330 billion in working capital is effectively trapped within the financial system due to these inefficiencies – an amount equivalent to roughly 9 percent of the United Kingdom's annual gross domestic product.
A Hidden Drain on Business Capital
For Singapore, one of the world's most internationally connected trade and financial centres, the impact is particularly significant. Businesses operating across borders face higher transaction costs, delayed access to funds and increased administrative burdens, all of which can affect cash flow and investment decisions.
According to the study, payment failures and manual repair processes account for around $420 million in annual costs for Singaporean businesses. When transactions fail to process automatically, companies often incur additional operational expenses and delays as payments are manually corrected and resubmitted.
Meanwhile, foreign exchange spreads and correspondent banking fees remain the largest source of friction. Globally, these costs account for approximately $6.3 billion in lost business capital each year, according to the research.
The report also highlights the impact of settlement delays. At any given moment, roughly $220 million in working capital is effectively immobilised in Singapore because businesses must wait for international transactions to clear. That capital could otherwise be deployed for investment, hiring or day-to-day operations.
Growing Pressure for Efficiency
The findings arrive at a time when companies are facing increasing pressure to optimise liquidity amid economic uncertainty, higher financing costs and ongoing shifts in global trade patterns.
«Legacy payment systems are quietly draining billions from businesses that can least afford it,» said Firdevs Abacioglu, Head of Data Science and AI at Airwallex. «Every dollar stuck in the system is a dollar not invested in growth.»
The research was based on an analysis of cross-border B2B payment volumes, payment failure rates, foreign exchange costs across major currency corridors and settlement timelines for international supplier and contractor payments.
Liam Daly, Senior Economist at Cebr, said the findings point to structural inefficiencies that continue to hinder international commerce.
«For a globally connected economy like Singapore, these frictions translate directly into higher costs, reduced liquidity and less efficient capital allocation,» he said. «Addressing them would support more seamless international trade and unlock capital for productive use.»
Modern Infrastructure Gains Momentum
The report reflects a broader trend in the payments industry as fintech firms seek to challenge legacy banking infrastructure with faster, lower-cost alternatives. Real-time payment networks, local clearing systems and multi-currency platforms have become increasingly important as businesses expand internationally and demand greater transparency around costs and settlement times.
Airwallex plans to publish a second phase of its research later this month, examining how the so-called Global Growth Tariff varies across industries and company sizes. The analysis will include sectors such as software-as-a-service, tourism and e-commerce, where cross-border transactions play a central role in business operations.
