SMEs forecast to shift cross-border payment business toward fintechs

SMEs cross-border payment providers could shift markedly over the next two years, according to Mastercard survey findings reported by Finextra. The report projects that fintechs will be the main provider for 48% of surveyed small and medium-sized businesses by 2028, while banks will be the main provider for 28%, compared with 30% and 42% respectively in 2025.

Finextra said Mastercard’s Money in Motion report surveyed SMEs in 11 countries and found that most businesses trading internationally expect to change their current cross-border payment provider within two years. The published account does not provide the survey’s sample size, fieldwork dates, country list or full methodology, limiting conclusions about all SME markets.

The 2028 figures are projected provider preferences, rather than observed market shares. They also do not establish that SMEs are ending their banking relationships. More than nine in 10 respondents already use several payment providers, Finextra reported, indicating that a change in a main provider can coexist with continued use of banks or other firms.

Why are SMEs changing cross-border payment providers?

Trust and speed were the leading considerations in choosing a provider, cited by 35% and 34% of respondents respectively, according to Finextra’s account of the Mastercard research. Cost and transparency were each named by 28%. Among companies that had recently moved provider, two-thirds cited quicker transactions and more dependable settlement.

McKinsey’s 2024 surveys across North America, Europe and emerging Asia offer separate evidence of current use. Between 35% and 50% of SMEs, with substantial variation by geography, said they had used a fintech or other nontraditional provider for cross-border payments in the prior year, McKinsey said.

McKinsey said executives at SMEs and mid-sized companies pointed to pricing, access to straightforward foreign-exchange hedging tools, and tailored disbursement options to wallets, accounts and cards as factors in provider decisions. Finextra reported that payment tracking and fraud detection were the most sought-after additional services in Mastercard’s survey, selected by 43% and 42% of respondents.

Why can cross-border payments be slow and costly?

A cross-border payment is a financial transaction in which payer and recipient are in different countries, according to the Bank of England. Where banks lack a direct relationship, they may rely on a correspondent bank. The central bank says each additional intermediary can add time and cost, particularly in lower-volume currency corridors, alongside foreign-exchange and processing fees, financial-crime checks and differences in domestic payment-system hours.

Banks remain central to international payments and trade finance for large companies, McKinsey said. Its research describes nontraditional providers as gaining ground in lower-value small-business and person-to-person flows. Lower-value payments accounted for about 10% of the roughly $179tn in global cross-border payments in 2024, but close to one-third of the revenue pool, according to McKinsey.

Policymakers are also seeking to reduce longstanding frictions. The Bank for International Settlements says the G20’s cross-border payments work focuses on connecting payment systems, legal and regulatory arrangements, and data and message standards. Yet the Financial Stability Board said in its 2025 progress report that completed roadmap actions had not produced tangible global improvements for end users and that satisfactory progress by the 2027 target date was unlikely.

This story draws on original reporting from Finextra Research.