Banks risk being sidelined in the SME payments ecosystem over the medium term by software vendors unless they form partnerships with them.
In early-stage markets — or markets where vendors account for less than 10% of SME payments volume — the opportunity for vendors is significant. First movers can shape technical standards, commercial frameworks, and customer segmentation, according to a January 2026 report by McKinsey & Co.
However, banks in these markets face the threat of losing direct relationships with SME customers. They often lack partnerships with vendors or end up competing directly with them.
“By partnering early, banks can continue to anchor SME financial flows while allowing independent software vendors (ISVs) to control the customer interface,” McKinsey said in its report, Decoding ISV Maturity: A Global Playbook for Payments Growth.
In Asia Pacific, more banks are teaming up with fintech firms to enhance services at lower cost.
“For something as basic as enabling instant cross-border payments, banks realise they need a partner,” said Samarth Bansal, general manager at Wise Platform, in an earlier interview.
Bansal added that many banks focus on keeping customers’ deposits and financial activity within their own apps, believing this is key to driving revenue.
Separately, consultancy YCP Solidiance expects more fintech–bank partnerships across Southeast Asia to accelerate innovation and financial inclusion.
Beyond payments, digital lending is expected to become a major growth engine for financial services in the region, YCP Solidiance said. Automated loan processes are speeding up approvals and expanding access to underserved segments.
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