By Julienne Loh

Around the world, small- and medium-sized enterprises (SMEs) are the mainstay of nearly every economy. The Asia-Pacific (APAC) region is no different.

SMEs here comprise 95 percent of all businesses, employ half the workforce, and account for as much as 50 percent of the GDP of wealthy nations and about 20 percent of that of poorer countries.[1] In emerging markets, the World Trade Organization says, SMEs generate 80 percent of new jobs.[2]

SMEs are therefore critical for growth and prosperity, which is why addressing the many challenges they face – from regulations and taxation to access to finance, talent and technology, to name just a few – is crucial.

Above all of these, however, the key factor limiting SME growth is cash flow management. Take Singapore, for instance, where a late 2017 survey showed a sharp rise in SMEs facing financing troubles – up from 22 percent to 35 percent over a year.[3] Another survey around that time found nearly two-thirds of SMEs were dealing with delayed payments from customers, with that factor cited by SMEs as their chief difficulty.[4]

Cash crunch

Central to SMEs’ cash management problems is the typical payment matrix, which is not conducive to reliable cash flow: while customer revenue is low-value and high-volume, supplier payments are low-volume and high-value.[5]

What SMEs need is access to a range of speedier payment options, particularly digital solutions such as cards, digital payments and peer-to-peer transfers. Digitizing payments across the supply chain can improve accounts receivables, boosting cash flow.[6]

Currently, banks can provide some options, and these are broadly broken down into three areas:

  • Solutions to accelerate receivables: banks typically do offer these, and they include e-invoicing, receivables financing, card acceptance and rapid settlement.
  • Data solutions to track cash flow and manage liquidity: banks typically don’t offer these – they include cash flow visibility, analytics and forecasting tools tied to accounting packages, and decisioning support.
  • Solutions to stretch payables: SME credit cards and virtual cards are products that banks can offer; alternative solutions are generally not available.

Real-time payments

What SMEs need is the speed, data-richness and reliability inherent to Real-Time Payments (RTP). RTP is a 24/7 electronic payment solution that solves a range of issues faced by SMEs around cash management and visibility. RTP can help SMEs to:

  • Manage cash flow by providing rapid access to funds on the receipts side, an accurate position of cash holdings, easier reconciliation, and insights into payment performance;
  • Manage payments by controlling the timing and certainty of payments, providing instant confirmation of payments, and initiating urgent payments;
  • Manage operations by providing reliable, 24/7 system access, a wider choice of payment methods, and improving customer satisfaction.

But RTP isn’t perfect yet: there is still a risk that parties exchange transactions erroneously, and the irrevocable nature of transactions means they can’t be cancelled as easily as other methods allow.

In the past, RTP lacked rich-data capability, anti-fraud and anti-money laundering protections but that is no longer the case. At Mastercard through Vocalink, we offer the core RTP switch (called IPS) which is supported by a multi proxy service (MPS) that allows for more user-friendly identifiers for bank accounts such as government ID or mobile phone number. Both services are built on the data-rich ISO 20022 messaging standard. The switch includes the core Credit Transfer message supported by approximately 20 other payment and non-payment messages including “Request to Pay.” Also, our AML solutions and account and transaction risk scoring tools assist in reducing SME targeted fraud attempts by enabling banks to identify payment requests that are suspected to be CEO or invoice-redirection fraud.

As a result, RTP is already proving to be a potent payment tool for individuals – and increasingly for small businesses. Take Thailand, where an RTP system called PromptPay was launched in January 2017.[7] It lets individuals send money, and allows small businesses to accept payment for work or goods via mobile devices, providing a safe, secure and reliable platform, and eliminating transaction fees for smaller merchants on what are often low-value purchases.[8] In just two years, PromptPay was used for 765 million transactions worth more than US$110 billion.[9]

How to make RTP a solution for all businesses

Mastercard’s technology underpins RTP solutions like PromptPay, and makes RTP a viable, safe and secure global payment option: funds are instantly accessible, the service runs 24/7, it has a core emphasis on security, it is data-rich, it incorporates dynamic messaging, and using IS020022 provides a foundation for global interoperability.[10]

The success of PromptPay shows how expanding RTP across APAC would have a profound effect on SMEs and cash flow management. A typical example in the SME context is Payment on Delivery (POD). In the POD scenario, SMEs deliver goods and receive payment in cash from their customers. As deliveries are made throughout the day the volume of cash being held by the delivery driver increases. This presents a few issues for the SME; 1) Cash in transit throughout the day is unavailable for other business needs. 2) There is the inherent security risk of cash being lost or stolen. 3) It is difficult and time-consuming to reconcile the payments made in cash with the goods delivered, particularly in the event of a shortfall. RTP provides a solution to each of these challenges, but it requires a concerted effort to make bank accounts accessible to a much wider audience than today

Realising the promise of RTP, therefore, is not a certainty. Getting there requires that governments invest in the right infrastructure, regulators encourage adoption, banks advocate for it, and SMEs focus on digitizing their payments. Yet all of that is looking increasingly likely – and with it the chance that with the help of RTP APAC’s SMEs can put their cash management problems behind them.

Julienne Loh is Executive Vice President, Core Products, Asia Pacific, Mastercard.


[1] The digitalisation of SME Finance in Asia: Expanding the rewards and assessing the risks, Mastercard and the Economist Intelligence Unit (2019)

[2] Crossing the Digital Border: Four Ways to Transform the SME Global Market, Mastercard (January 2018). See:

[3] Round-up: SMEs and cash flow management, (March 22, 2018). See:

[4] Ibid.

[5] The digitalisation of SME Finance in Asia, op cit.

[6] Ibid.

[7] Thailand’s main interbank payments provider, National ITMX, worked with Vocalink, a Mastercard company, to launch PromptPay.

[8] How Real-Time Payments Is Empowering Thailand’s Small Businesses And Entrepreneurs, Mastercard Newsroom (April 30, 2018). See:

[9] PromptPay – Two Years of Transforming Thai Payments, Vocalink (January 29, 2019). See:

[10] Real-time payments: Modernizing bank account-based payments, Mastercard (2018). See:



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