FRESNOFORECLOSURE

Nagesh Devata, Senior Vice President of APAC, Payoneer

Despite ongoing tariff challenges, small and medium-sized enterprises (SMEs) continue to find new opportunities for cross-border expansion, especially in fast-growing e-commerce markets. Experts predict the e-commerce industry will grow by a staggering US$11 trillion by 2025, offering SMEs a fertile ground to expand internationally.

According to Payoneer’s latest earnings report, SMEs selling on global marketplaces reached a transaction volume of US$13.4 billion, marking a 14 per cent year-over-year increase. This growth was fuelled by strong performances from large e-commerce sellers, underscoring the continued demand for reliable cross-border trade solutions.

Nagesh Devata, Senior Vice President of APAC for Payoneer, highlights that the global shift towards digitisation is driving this trend.

Devata points out that regions such as Greater China and South Asia have emerged as priority growth markets, reflecting the rapid pace of e-commerce expansion. Payoneer’s increased revenue from these regions in 2024 signals that SMEs are successfully navigating challenges and tapping into these dynamic markets. With digital commerce gaining momentum, cross-border trade remains a powerful growth engine for SMEs across Asia and beyond.

Founded in 2005, Payoneer helps SMEs overcome cross-border payment challenges by offering virtual multi-currency accounts. These accounts allow businesses to hold, transfer, and receive payments in multiple currencies cost-effectively. This enables SMEs to operate like local businesses in global markets, improving cash flow even during trade disruptions.

In an email interview with e27, Devata shares all the details about how SMEs can tap into new opportunities with the constantly changing global business landscape.

Also Read: How Wallex is empowering SMEs with seamless cross-border payments

The following is an edited excerpt of the conversation.

How have the Trump-era tariffs reshaped the cross-border trade landscape for SMEs in Asia, and what key challenges are they now facing?

There is a broad range of outcomes related to tariffs, and the situation is evolving quite quickly. Our business is very diversified, and that diversification is across geographies, trade routes, goods, and services, with 80 per cent of Payoneer’s B2B business being in services.

Our customers are global, complex, and underserved. Our goal is to enable global operations for companies of all sizes, providing critical tools for managing cross-border financial operations. As such, current global economic conditions, impending tariffs, and overall uncertainty under the new administration make accurate forecasting more complex. Our business has proven itself to be resilient in the face of similar trade policy challenges historically.

We are monitoring developments related to US tariffs over the medium to longer term to determine how we can best support our customers. In most moderate tariff scenarios, which I think is what most observers expect at this point, we do not expect any material impact on our business.

We remain committed to maintaining access to global commerce for the businesses we serve globally.

What strategies can SMEs adopt to remain competitive and sustain cross-border growth amid fluctuating tariffs and trade tensions?

SMBs are the backbone of the global economy, accounting for most businesses worldwide and more than 50 per cent of global employment. In emerging markets especially, SMBs create 70 per cent of jobs, according to the World Bank. They are contributing significantly to employment and the digital economy.

While they might not have the same access to capital and liquidity in financing as enterprises, SMEs are increasingly adopting innovative strategies to stay competitive and navigate any headwinds. By optimising operational efficiency and maintaining strong profit margins, SMEs are finding ways to thrive in dynamic market conditions. We see more businesses partnering with cross-border payment gateways to mitigate risks and reduce dependency on only one source.

Also Read: A new insights attitude for SMEs in the era of the ‘insights engine’

In times of economic instability, steady cash flow is critical for SMEs to stay on top of their businesses. Cross-border payment platforms such as Payoneer enable SMEs to receive payments within days, compared to weeks with traditional banks, ensuring smoother cash flow and higher transparency. The efficiency can not only improve customer experience but also help businesses to cut the long wait, eventually maintaining the cash flow as well as the business.

From a payment perspective, how can SMEs navigate the complexities of cross-border transactions while managing increased costs due to tariffs?

Cross-border transactions involve navigating complex regulatory requirements, which are often time-consuming and costly for SMEs. Each client is likely to have a favoured payment method, depending on their location, business nature, banking set-up, and convenience.

Therefore, SMEs should first understand the different payment options available and choose the right partners that align with their global business strategy, streamlining transactions. Transparency in pricing could avoid unexpected costs that could erode profit margins.

Another important factor is the simplicity of the platform’s use. Delays and frustration may occur if the platform is difficult for clients to operate or requires a lot of administrative work.

The platform must also support the currencies that SMEs and their clients deal in. Software integration is an add-on. Does the platform seamlessly integrate with your existing accounting or invoicing systems? This can save time and reduce errors.

Finally, consider automatic reconciliation—will the platform manage this process automatically, or will it require manual intervention, adding to your workload? A good payment solution should address these factors by offering transparent fees, user-friendly interfaces, support for multiple currencies, seamless integration with accounting software, and automated reconciliation, making it the ideal choice for SMEs to partner with for complex transactions.

What role does technology play in helping SMEs streamline cross-border operations, from supply chain management to payments?

We live in a world where everything is at the touch of a button, and having mobile access to payments has been a key driver of business growth. Bank transfers have traditionally been the primary method for SMBs to engage in global B2B transactions, necessitating the establishment of a local account to facilitate global operations.

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Traditional banking systems have made it prohibitively complicated for SMBs to navigate changing regulatory frameworks, local and global banking infrastructure, currency conversion costs, fraud risks, cross-border supply chain payments, and ensuring seamless payment experiences for their customers or vendors worldwide.

Setting up bank accounts overseas is complex and often impossible, especially in places that mandate companies to have a local operating entity. This structure can be prohibitive for SMEs. If you are not a large global enterprise, you cannot make it to the starting gate, much less compete. By leveraging payment platforms like Payoneer, SMEs can now send and receive funds across borders in real time at a lower cost.

Payoneer serves customers in emerging markets because we have spent two decades building the financial and technical infrastructure that helps us, our customers, and our marketplace partners manage these risks effectively. Because SMBs are our core focus, we continuously invest in our product roadmap and operating infrastructure specifically to support their evolving needs.

For instance, Payoneer’s Virtual Receiving Accounts allow users to receive funds in eleven major currencies, eliminating the need for costly intermediaries and reducing FX risks.

In 2024, Payoneer processed US$80 billion in total volume, with B2B volume growing by 42 per cent year-over-year, according to data from Payoneer Annual 2024 Earnings Release. This growth highlights how SMEs are increasingly relying on technology to streamline payments and improve cash flow.

Looking forward, what trends do you foresee in global trade and cross-border payments, and how should SMEs prepare for future shifts in the geopolitical landscape?

We have seen the increased use of blockchain, AI, and automation in payment processing, and we believe that innovations will continue driving the evolution of the industry as systems get more efficient and as purchasing patterns evolve. For SMEs, it is important to embrace technology and stay ahead of the curve.

We believe that those who embrace global operations and adapt to change will emerge as the most profitable and victorious. As payment providers, we are committed to enhancing our financial stack to better accommodate the ever-changing business environment and unlock new markets.

Meanwhile, it is also key to maintain trust—between payers and receivers, customers and financial institutions, and the ecosystem of partners, regulators, and governments—while tapping into the new era.

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Image Credit: Payoneer

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