MSMEs lose billions to costly cross-border payments

Filipino micro, small, and medium enterprises (MSMEs) are losing billions of pesos each year to costly and inefficient cross-border payment systems, according to new industry data.

Research shows MSMEs in the country lost an estimated P39.5 billion in 2024 alone due to foreign exchange markups charged by traditional banks and payment providers. Nearly half of these businesses continue to rely on conventional channels for overseas transactions despite delays, high fees and a lack of transparency.

The issue is pressing for the sector, which makes up 99.6 percent of all registered firms in the Philippines.

Two-thirds of local MSMEs expect their cross-border transactions to rise within the next six months, highlighting the need for more efficient solutions.

To address this gap, fintech firm Wise has launched its Wise Business account on Wednesday in Manila.

The platform allows enterprises to receive payments in 24 currencies and send money globally at the mid-market exchange rate without hidden charges. The company said more than 70 percent of transfers are completed within 20 seconds.

“For Filipino SMEs, managing international payments is critical to scaling globally,” country manager of Wise Philippines Areson Cuevas said.

MSMEs juggling multiple payment providers

“Our research reveals that more than half of MSMEs are juggling multiple payment providers just to handle their international needs, while complex processes prevent them from expanding globally. Wise Business solves these challenges with one simple account to manage all their global payments efficiently,” he added.

Beyond payments, Wise Business integrates with accounting software such as Xero and QuickBooks, supports bulk disbursements for up to 1,000 suppliers or employees, and provides debit cards for international spending with customizable limits.

Some firms have already reported savings.

Raphaela Amat Agupitan, managing director of Koru Adventures & Travel Inc., said her company reduced costs by about P280,000 in bank fees in 2024 after shifting to Wise Business. Faster settlement of overseas transactions also improved cash flow, with 60 percent of her firm’s clients now based abroad.

Wise is licensed by the Bangko Sentral ng Pilipinas and was the first global fintech to integrate with InstaPay and PESONet. It currently handles about 12 percent of inward personal remittances and is now seeking to extend that reach to MSMEs navigating international markets.