Banks vs Fintechs: Who's Winning SME Cross-Border Payments Right Now?

Quick Summary

Pratik Khowala, Executive Vice President, Global Head of Transfer Solutions at Mastercard, says the real winner in SME cross-border payments is the SME itself, since every provider now has to raise its game. On market share, banks still hold over 40% of SME flows against roughly 30% for fintechs, but fintechs are growing faster. He sets out what each side needs to do to win.

Who is winning SME cross-border payments, banks or fintechs?

Khowala's first answer is that SMEs are winning, because their expectations are raising the bar for every provider. On raw market share, banks are still dominant: over 40% of SME flows run through banks, compared with around 30% for fintechs. But he says fintechs are growing faster, because they deliver on the user experience, speed, cost and transparency that SMEs increasingly demand.

What is at stake for a bank that doesn't keep up?

Banks hold one structural advantage: the trust of their existing customers, a foundation fintechs still have to build. Khowala argues that if banks evolve to match fintechs on speed, transparency and cost-effectiveness, on top of that trust, "you will see a much more level playing field." The player that evolves fastest and serves the need best will be the eventual winner, even though flows remain highly bank-dominant today.

FF NEWS TAKE:

A 40/30 split sounds like a comfortable lead for banks, but Khowala's framing, trust as a starting asset rather than a permanent moat, is a warning as much as a compliment. Fintechs are closing the gap on the metrics SMEs say they care about most; the incumbents' advantage has a shelf life unless it is actively defended with better experience, not just brand history.