Why Southeast Asian SMEs Must Upgrade Payment Systems

By Mikael Borres

A new IDC study reveals why Southeast Asian SMEs need to upgrade their payment systems to keep pace with digital consumer demands.

Most small and medium enterprises (SMEs) do not have the capacity to adapt to payment technologies, according to a new study by market intelligence provider International Data Corporation (IDC).

Sponsored by regional payments platform 2c2p by Antom, the May 2026 IDC study, “How Southeast Asia Buys and Pays 2026: Unlocking SMEs’ Potential,” found that most Southeast Asian SMEs report a need to make additions to their existing payment systems or switch to a new system to meet trends in payment technology.

“Southeast Asia’s businesses, and especially SMEs, are at the heart of the region’s economic growth—contributing more than 50% of GDP in major markets and employing 64.6% of the workforce—but many are still navigating the complexities of digital transformation,” said Worachat Luxkanalode, group CEO of 2C2P by Antom.

“Uneven digital maturity, especially in payment capabilities, continues to limit their ability to fully capitalize on e-commerce growth,” said Michael Yeo, associate research director of IDC's Financial Insights and Retail Insights.

The Surge of Digital Wallets in the Philippines & SEA

The key findings for the Philippine market are as follows:

Overall digital payment trends: Rapid adoption across all payment types as more consumers move online
Top SME priorities: Reducing costs (30%), strengthening supply chains (29%), building brand awareness (28%)
Key SME challenges: Transaction errors (35%), data integration issues (35%), slow settlements (32%)
Barriers to SME digitalization: Infrastructure limitations and inconsistent service availability
Outlook for SMEs: Strong growth potential, supported by increasing digital participation, but constrained by infrastructure gaps

The Philippines has 62.8 million mobile wallet users, ranking second out of six surveyed Southeast Asian countries (Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam) in terms of the highest number of mobile wallet users.

Only 36% of surveyed Philippine SMEs, however, said they feel their payment systems are ready to handle new trends over the next few years. Over a third (35%) of those surveyed also said they need to make additions, with 29% saying they need to switch systems.

Frequently Asked Questions

How many mobile wallet users does the Philippines have?

According to the 2026 IDC study, the Philippines has 62.8 million mobile wallet users, ranking second among six surveyed Southeast Asian countries — behind Indonesia, which leads with 153.9 million.

Are Philippine SMEs ready for digital payment trends?

No. Only 36% of Philippine SMEs surveyed said their payment systems are ready to handle new trends in the coming years. The remaining majority either need to make additions to their existing systems (35%) or switch to an entirely new system (29%), according to the 2026 IDC study.

What is the biggest barrier to payment digitalization for Philippine SMEs?

Limited internet and technology access is the top barrier for Philippine SMEs, cited by 52% of respondents in the 2026 IDC study. This sets the Philippines apart from other markets. Indonesian and Thai SMEs cited integration complexity as their top barrier, while Singapore and Vietnam SMEs pointed to data security and fraud concerns.

Will cash payments disappear in Southeast Asian e-commerce?

Not entirely, but offline payment methods are projected to decline sharply. According to the IDC study, offline payments will decrease from 11% of total e-commerce payments in 2024 to only 3% by 2029. Despite this, cash remains widely used in day-to-day SME transactions across the region, with Vietnam and Singapore reporting the highest cash usage rates at 33% each.

What share of the Southeast Asian e-commerce economy do SMEs account for?

Southeast Asian SMEs accounted for 57% of the region's e-commerce economy in 2024, according to the 2026 IDC study. That share is projected to grow to 59% by 2029, underscoring the central role SMEs play in the region's digital economy.

Mikael Borres

Writer

Mikael Borres is a writer for The Business Manual, authoring articles about Philippine small businesses, economics and finance. His work with the publication has a strong focus on uplifting Philippine micro, small, and medium enterprises (MSMEs) with fundamental business lessons and leadership insights.

Mikael has written pieces on evolving business trends and technology, as well as articles on branding and human resources. He also writes people-centred feature articles highlighting the work and stories of Filipino entrepreneurs and executives. He also covers events for the The Business Manual, highlighting developments in the Philippine business scene.

Mikael graduated from the University of San Carlos with a Bachelor of Arts in Political Science, majoring in International Relations and Foreign Service (IRFS).

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