Southeast Asia’s SMEs are often portrayed as needing a push into the digital economy, as though the main problem were mindset.
The latest payment data suggests the opposite. The ambition is already there. What is missing, more often than not, is the infrastructure to support it.
That is the central message running through How Southeast Asia Buys and Pays 2026: Unlocking SMEs’ Potential by IDC and 2C2P. The study shows that SMEs across the region want to grow, digitise, improve customer experience, expand into new markets, and adopt new payment trends. But many remain constrained by outdated systems, weak integration, patchy infrastructure, and payment providers that do not keep pace with business needs.
Also Read: Why Southeast Asia’s SMEs are falling out of love with bank-led payments
In that sense, Southeast Asia does not have an SME demand problem. It has an execution problem.
The growth ambition is obvious
The headline numbers alone make that clear. Across Southeast Asia, 66 per cent of SMEs now sell online. The region’s e-commerce market is expected to rise from US$156.3 billion in 2024 to US$289.8 billion by 2029, with SMEs already accounting for 57 per cent of total e-commerce and projected to contribute 58 per cent by the end of that period.
Cross-border appetite is strong too. Only 48.5 per cent of SMEs currently sell overseas, but among those that do not, 75 per cent plan to start within two years. If those ambitions are realised, IDC estimates the region could unlock an additional US$20.8 billion in ecommerce sales by 2029.
That is not the profile of a reluctant business base. It is the profile of a business segment trying to move faster than its systems allow.
The readiness gap is now the real bottleneck
The most important figure in the report may be this one: 63 per cent of SMEs say they do not have the technology to support new payment trends.
That readiness gap breaks down in revealing ways. Across the region, 32 per cent say they will need to make additions to their existing payment system to keep up, while 31 per cent say they will need to switch to a new one entirely. Only 37 per cent say they are ready for the next few years.
In Indonesia, the pressure is particularly intense. 74 per cent of SMEs say they either need to add to or replace their existing payment setup. In Malaysia, the equivalent figure is 71 per cent. Even in Singapore, often taken as the region’s most mature digital market, 53 per cent still say their current systems are not enough.
That should reframe how the regional startup ecosystem thinks about SMEs. These businesses are not just potential users of digital tools. They are already confronting the limits of first-generation digitisation.
Each market is trying to solve a different problem
One reason the readiness gap persists is that Southeast Asia’s SME landscape is not moving along a single path. Business priorities vary sharply by market.
Also Read: Southeast Asia’s digital payments boom has a dirty secret: SMEs still love cash
In Indonesia, SMEs are focused on enhancing digital presence, strengthening supply chains, and expanding into new customer segments. In Malaysia, the top concerns are reducing operational costs, increasing sales, and improving payment solutions. The Philippines is shaped more by cost control, supply chain resilience, and branding.
Singapore’s SMEs prioritise customer experience, new products and services, and talent retention. Thailand is more expansion-focused, with businesses prioritising new markets, better payment solutions, and stronger financial management. Vietnam stands out as particularly upgrade-oriented, with 30 per cent of SMEs naming launching new products and services, 30 per cent upgrading digital technology and tools, and 30 per cent improving payment solutions as top priorities.
These are not minor variations. They imply that SME infrastructure cannot be treated as a standard regional problem with a standard product answer.
Payments are becoming a proxy for broader operational maturity
The report is framed around payments, but its deeper insight is about operational readiness.
When SMEs complain about payment systems, they are often really describing wider weaknesses in their business stack. Slow settlements affect cash flow. Poor integration creates manual work. Missing payment methods depress conversion. Limited international support constrains expansion.
Country-level pain points make this visible. In Indonesia, the top complaints are slow payouts or settlements, weak support for international payments, and high fees. In Malaysia, the biggest issues are fraud worries, the inability to offer the payment methods customers want, and poor systems integration. In the Philippines, transaction errors, data errors with other systems, and slow settlements are the main issues.
Singapore’s businesses complain most about high fees, slow settlements, and a lack of mobile optimisation. In Vietnam, the top frustrations are security or fraud worries, weak international support, and data errors with other systems.
None of these is a narrow checkout issue. They sit at the intersection of finance, customer experience, and systems design.
Legacy trust is starting to collide with future needs
Another reason the readiness gap remains unresolved is that SMEs often stay with familiar providers even when those providers are no longer a good fit.
Also Read: SEA’s SMEs are global in ambition but stuck at checkout
The study finds that 79 per cent of SMEs still use banks as their main online payment solution provider. Yet 88 per cent are considering switching providers or adding new payment solutions. That is an extraordinary mismatch between usage and satisfaction.
It suggests the market is still held together, at least in part, by inertia. SMEs trust banks because they already know them, use them, and associate them with safety. But as customer payment behaviour becomes more fragmented and more digital, trust alone is no longer enough.
The friction begins even before go-live. 61 per cent of SMEs say they encountered onboarding issues with payment providers, including confusing sign-up processes, excessive documentation, poor support, slow approvals, and unclear fees.
A digital economy cannot scale smoothly if the businesses powering it are still tripping over activation and integration.
The opportunity now is less about demand creation than capability building
For founders, investors, and policymakers, the implications are fairly blunt. Southeast Asia’s SMEs do not primarily need to be convinced that digital transformation matters. Most already know. Many are already selling online, exploring new payment trends, and planning regional expansion.
What they need are better catalysts for transformation.
That means products that are easier to integrate, faster to onboard, more flexible across markets, and more aligned with vertical-specific needs. It also means recognising that payment infrastructure is not merely a feature layer. For many SMEs, it is the operating backbone through which revenue, cash flow, customer experience, and expansion all pass.
The region’s SME story, then, is not one of low ambition. It is one of the ambitions running ahead of infrastructure.
Also Read: One size fits none: Why SEA’s SMEs need vertical payment stacks
And in fast-growing markets, that gap can either become a drag or a major opportunity for whoever can close it first.
The post SEA’s SMEs aren’t lazy, but their payments infrastructure is appeared first on e27.