Singapore – Inefficiencies in legacy cross-border payment systems cost businesses in Singapore approximately US$7b in working capital each year, according to data from Airwallex, conducted in partnership with the Centre for Economics and Business Research (Cebr).
The study examines what Airwallex describes as the “Global Growth Tariff,” a term the company uses to refer to the hidden costs businesses face due to outdated business-to-business (B2B) international payment infrastructure. According to the research, these inefficiencies include payment failures, foreign exchange (FX) spreads, correspondent banking fees, and slow settlement cycles.
Globally, the report estimates that around US$330b in working capital is tied up in the financial system because of these inefficiencies. Airwallex said this figure is equivalent to roughly 9% of the United Kingdom’s annual gross domestic product.
For Singapore, a major international trade and financial hub, the study suggests that inefficiencies in cross-border payments create challenges for businesses by affecting cash flow, increasing transaction costs, and reducing operational efficiency.
“Legacy payment systems are quietly draining billions from businesses that can least afford it. Payment failures, high FX fees, and slow settlement cycles don’t just hurt the bottom line — they freeze the capital businesses need to move fast in an unpredictable world. Every dollar stuck in the system is a dollar not invested in growth. Modern infrastructure fixes this: faster, transparent, and built for the way global business actually works today,” said Firdevs Abacioglu, Head of Data Science and AI at Airwallex.
According to Airwallex and Cebr, the research analysed B2B payment failure rates, foreign exchange costs across major currency corridors, and settlement timelines for international supplier and contractor payments. The study combined publicly available data on cross-border B2B payment volumes with existing research on payment system inefficiencies to estimate the amount of capital tied up within the global financial system.
The report breaks down the estimated annual cost to Singapore businesses into several components. Payment failures and associated repair costs account for approximately US$420m annually. These costs arise when payments fail to process automatically and require manual intervention, generating additional fees and administrative work across supply chains.
The research also points to foreign exchange spreads and correspondent banking fees as significant contributors to the overall cost burden, while slow settlement cycles were estimated to immobilise roughly US$220m in working capital at any given time in Singapore. According to the study, this reduces the liquidity available for business operations, investment, and growth.
“Our analysis identifies a significant and persistent set of inefficiencies within legacy cross-border B2B payment systems, which collectively impose a material drag on business activity,” said Liam Daly, Senior economist at CEBR. “For a globally connected economy like Singapore, these frictions translate directly into higher costs, reduced liquidity and less efficient capital allocation. Addressing them would support more seamless international trade and unlock capital for productive use.”
The findings come as businesses face increasing pressure to manage working capital efficiently amid economic uncertainty and evolving global trade conditions.
