Spending-shifts away from legacy pandemic-driven business survival and digitalization measures this year could indicate how regional SMEs may proact in 2025

According to an inaugural payments landscape barometer of small- and medium- sized enterprises (SMEs) in Australia, Malaysia and Singapore*, some trends have been discerned from how respondents have been investing in technology, infrastructure, and talent to adapt to an evolving economic landscape.

First, export payments during the survey period had increased 6%, driven by Australia and Malaysia in the data. Data from Singapore SMEs showed a 27% year-on-year decline in export payments. 

Second, data showed a 29% increase in spending on information services compared to the same period in 2023. SMEs in the Malaysia and Australia data led the charge in IT investments, with sectors such as  F&B (+120%), IT and software services (+66%), and business consultancy (+59%) registering the biggest gains. 

Other findings

Third, many SMEs interviewed cited turning to digital tools, AI, and automation to address rising costs and improve efficiency. They had been adopting workflow automation, AI-driven fraud detection, and advanced data analytics, among other solutions to streamline operations, minimize manual work, and optimize resources. Also

  • SMEs in the financial services and business services had been cutting their information services spending by 42% and 4%, respectively.
  • After around three years of embracing hybrid or remote work, SMEs analyzed cited reinvesting in physical infrastructure, reflecting in a 16% growth in office expenses. Sectors such as retail and wholesale, as well as business services, had seen office expenses rise by nearly 150% and 70% respectively.
  • An increase in demand in commercial real estate could explain the more-than-doubling of transaction volumes in real estate and leasing (+107%) from the analysis periods of 2023 and 2024. This was contrasted by negative real estate spending growth in some sectors such as industrial manufacturing and construction (-48%), online retail (-44%) and telecommunications (-28%).
  • Amid broader economic pressures, SMEs in the analysis showed a 7% rise in salary payments.
    • In the Singapore data, salary investments stayed flat, with some sectors, including media and marketing (+13%) and business services (+3%) increasing their spending on third-parties (external advisors) to drive growth.
    • In Australia, salary payments among SMEs had risen modestly (+3%), in line with the country’s Wage Price Index and the National Minimum Wage increase of 3.75%.

According to Yogesh Sangle, Global Head, Instarem, the firm sharing its findings, managing costs has been a top priority for SMEs analyzed, particularly in critical areas like talent and expansion. “Thinking strategically about payments can not only help to reduce high cross border fees and improve cash flow — it can free up crucial resources for growth and set SMEs up for long-term success,” he added.

Such trends in SMEs could guide organizations in their business expansion and digital transformation strategies, amid ongoing challenges such as fluctuating exchange rates and high processing fees. Sangle noted: “Expanding overseas allows SMEs to tap into broader customer bases and unlock market opportunities to achieve scale and growth. While a degree of caution is understandable in today’s climate, we anticipate that SMEs will continue to identify and seize opportunities that align with their goals.”

*based on data from a sample of 700 SMEs and some qualitative interviews with customers on their spending patterns from January 2023 to August 2024