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Tag: systems

  • Singapore Loses $7 Billion Annually due to Inefficient Cross-Border Payment Systems: Study

    Singapore Loses $7 Billion Annually due to Inefficient Cross-Border Payment Systems: Study

    The antiquated systems of cross-border payments are imposing a substantial financial burden on businesses in Singapore, confining billions of dollars in operational capital and diminishing economic efficiency. This is according to recent research conducted by the financial tech firm, Airwallex, and the Centre for Economics and Business Research (Cebr).

    The research suggests that Singaporean companies lose roughly $7 billion per year owing to inefficiencies inherent in the traditional global payment infrastructures. The losses mainly come from payment failures, foreign exchange spreads, correspondent banking fees, and slow settlement processes that plague a vast portion of the global business-to-business (B2B) payment realm.

    Airwallex has termed this occurrence as the “Global Growth Tariff,” defining it as the economic pullback instigated by outdated cross-border payment systems. The report estimates that globally, a staggering $330 billion in working capital is stalled within the financial system due to these inefficiencies, an amount that is roughly equivalent to 9 percent of the United Kingdom’s annual gross domestic product.

    The Business Capital Drain

    For Singapore, one of the most internationally linked trade and financial hubs globally, the impacts are especially notable. Businesses involved in cross-border operations encounter higher transaction costs, delayed access to funds, and increased administrative workloads, all of which can influence cash flow and investment decisions.

    According to the study, payment failures and manual repair measures account for about $420 million in annual costs for Singaporean businesses. When transactions fail to process automatically, companies often suffer additional operational expenses and delays as payments are manually fixed and resubmitted.

    Simultaneously, foreign exchange spreads and correspondent banking fees remain the dominant source of friction. As per the research, these costs annually account for roughly $6.3 billion in lost business capital worldwide.

    The report also emphasizes the impact of settlement delays. At any given time, about $220 million in working capital is essentially frozen in Singapore as businesses await the clearance of international transactions. This capital could otherwise be used for investments, recruitment, or daily business operations.

    The Push for Efficiency

    The report’s findings come at a time when businesses are under increasing pressure to optimize liquidity amid economic uncertainty, higher financing costs, and ongoing changes in global trade patterns.

    “Legacy payment systems are quietly depleting billions from businesses that can least afford it. Every dollar stuck in the system is a dollar not invested in growth,” said Firdevs Abacioglu, Head of Data Science and AI at Airwallex.

    The research was founded on an analysis of cross-border B2B payment volumes, payment failure rates, significant currency corridor foreign exchange costs, and international supplier and contractor payment settlement timelines.

    Liam Daly, Senior Economist at Cebr, stated that the findings spotlight the structural inefficiencies that persistently obstruct international commerce. He added that addressing these frictions would promote seamless international trade and free up capital for productive use.

    Questions & Answers

    What is the “Global Growth Tariff”?
    The Global Growth Tariff is a term coined by Airwallex, referring to the economic drag created by outdated cross-border payment systems.

    How much do payment failures and manual repair processes cost Singaporean businesses annually?
    Payment failures and manual repair processes cost around $420 million each year for Singaporean businesses.

    What is the estimated amount of working capital trapped within the financial system due to inefficiencies in cross-border payment systems?
    According to the report, around $330 billion in working capital is effectively trapped within the financial system due to these inefficiencies.

  • Singapore and India to Link Real-Time Payment Systems

    Singapore and India to Link Real-Time Payment Systems

    The link will facilitate instant, low-cost fund transfers directly from one bank account to another between Singapore and India.

    Singapore will be linking its national e-payments system PayNow to India’s Unified Payments Interface (UPI) by mind-2022, according to an announcement by the Monetary Authority of Singapore on Tuesday.

    This means that users in Singapore will be able to make fund transfers to users in India using a UPI virtual payment address. Transfers from India to Singapore can be made using the user’s mobile phone number.

    The linkage will provide for increased volumes of remittance traffic, multi-entity participation, automation of capital control rules, and enriched message formats to accommodate future innovation by linkage participants, the announcement said.

    As the cost and inefficiencies of remittances between Singapore and India is expected to be substantially reduced, MAS said the link will further anchor the substantial trade, travel and remittance flows between the two countries.

    Earlier this year, Singapore and Thailand connected their payments infrastructures to enable cross-border peer-to-peer transactions of up to S$1,000 or THB25,000 using just their mobile numbers.

  • Hansen Technologies acquires Sigma Systems for $117m

    Hansen Technologies acquires Sigma Systems for $117m

    Australia’s Hansen Technologies has agreed to acquire catalog-driven software vendor Sigma Systems for C$157 million ($116.8 million).

    Found in 1996, Sigma provides enterprise catalog-driven software products to the communications, media and high-tech sectors.

    The Toronto-based BSS firm has over 70 customers in 40 markets, including  Tier 1 telcos such as Vodafone, Liberty Global, Telstra (Australia), Altice, Cox Communications (USA), Ziggo (Netherlands), Telkomsel (Indonesia), J:Com (Japan), Inmarsat (UK), Telmex (Mexico), Tiscali (Italy), Telus (Canada), Sky (UK), EWE TEL (Germany) and ViaSat (USA).

    It has 480 employees with offices located in Toronto, London and Wales (UK) and Pune, India.

    Andrew Hansen, chief executive officer of Hansen Technologies, said the acquisition is a strategic move to enhance the company’s proposition to the telecoms, pay TV and energy verticals.

    Hansen said the company has driven an exceptional growth strategy through acquisitions over the past 10 years, achieving a compound annual growth rate of 28% over the last four years.

    “Bringing Sigma Systems onboard further strengthens our ability to provide valuable solutions to our customer base and creates new expansion opportunities to cross-sell Sigma’s software solutions into our broad base of energy customers,” he said.

    In 2018, Sigma reported revenue of C$73.1 million and an EBITDA of C$18.8 million.

    Through the acquisition of Sigma, Hansen Technologies expects to “significantly” expand its scale and scope in the telecoms sector.

    “Sigma’s proprietary products sit within or adjacent to the company’s core business of billing and customer management, and are well designed to capture growth opportunities from the rollout of new telecommunications services such as 5G,” the company said.

    The acquisition is set to close on May 31. Hansen Technologies said the acquisition will increase its pro-forma basis share of revenue from the telecoms sector to 38% from a reported 17% in 2018.

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  • Philippines ranked among most vulnerable to retail systems hacking

    Philippines ranked among most vulnerable to retail systems hacking

    The Philippines ranked among the countries in the region most vulnerable to hackers who target electronic retail systems, cybersecurity company Trend Micro’s Philippine unit said on Wednesday in a media briefing.

    Point-of-sale (POS) system malware incidents, affecting purchases made through a credit card or a debit card, are among the most prevalent cyber crimes in the Philippines.

    In the Asia-Pacific, the Philippines had the fifth highest rate of POS attacks at 6% while the United States topped the list at 31%. Countries in second to fourth place were Australia (10%), Taiwan (9%), and Brazil (8%).

    The study covers the first half of 2015.

    POS systems are becoming increasingly available to even small to medium enterprises due to the influx of card-swiping devices employing cheap hardware, it sad.

    “It’s not just the cards, but the system server where the data is stored or the gadget being used to swipe the card is also vulnerable,” said Myla V. Pilao, Trend Micro Philippines’ Director of Marketing Communications said.

    Meanwhile, online banking was also an area of concern, as the Philippines had the fourth highest number of attacks in the region. There were over one million malware detections in the Philippines for the third quarter alone, Trend Micro said.

    As Filipinos become more accustomed to make their purchases through e-commerce, Trend Micro noted that local banks still do not use the most modern security practices for their credit and debit cards.

    Financial institutions in the Philippines still do not employ EMV cards that come with embedded chips as an added security feature to the personal identification number.

    “Anything that is connected to the Internet, we have to assume that it is a target,” said Ms. Pilao.

    “It would take us years to put up regulation (against cybersecurity threats), that is the biggest hurdle. We also need capacity building. Our law enforcement, they are used to investigating crimes on the street but to get them to investigate online won’t be easy because it’s not their habit,” she said.

    The country’s e-commerce law, which Ms. Pilao pointed out, is outdated based on what is happening in real world attacks. — Nicolo Paolo A. Pascual

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