The headline figure representing total payments volume is impressive but the big story is not the scale. It is what scale reveals. Violas Xiao tells EPI that the majority of the world’s trading SMEs are still stuck with opaque FX, slow settlement and onboarding that was never built for them.
With good cause, Xiao comes out of the recent Money20/20 Europe event in good heart with highlights including news of partnerships agreed with BBVA and Société Générale. Such deals are proof positive that institutional-grade cross-border infrastructure is finally being extended to businesses that aren’t multinationals. Violas explains what that actually means in practice – particularly for SMEs moving money through emerging market corridors where informal channels still dominate. And looking ahead, she flags up where the next wave of SME trade finance infrastructure is being built – and who’s being left behind.
EPI: XTransfer moved more than $60bn last year across 200+ countries. What does that scale tell us about the state of cross-border payments for the world’s trading SMEs?
Violas Xiao, XTransfer, Latin America and Singapore CEO
SME demand for cross-border payments is already large, and it’s growing fastest in corridors linked to emerging markets. Traditional infrastructure was built around the idea that SMEs mostly trade domestically or through a handful of familiar routes, but that’s no longer how they operate. Sourcing has diversified, nearshoring and friendshoring are reshaping supply chains, and e-commerce has pulled small exporters into markets they’d have not reached 10 years ago.
The volume we moved last year demonstrates how fragmented and inefficient the traditional rails still are for SMEs. SMEs want something faster and more transparent, and they want it easier to get into in the first place. They’re not just looking for one corridor done brilliantly. What they need is breadth across many corridors, and they need it to hold up reliably. What they’re really asking for, underneath all of that, is trust. Clear fees and certainty about when money will land matter most, alongside a compliance process that doesn’t derail a payment halfway through.
EPI: What’s really happening on the ground for an SME trying to move money through an emerging market corridor today, and what needs to change?
Violas Xiao:
A payment can pass through several intermediaries in practice, each running its own manual checks against its own set of bank requirements. Because of this, instead of flowing, it stops and starts. There’s often no visibility at all. Plenty of SMEs don’t know their total fees, don’t know the FX spread they’re getting, and have no real idea when the money will arrive, which makes it hard to even trace a delay once one happens.
Documentation causes problems too. Invoices, customs paperwork, beneficial ownership details, purpose-of-payment, these get asked for late, often after the business has already assumed the transaction was moving. And in some corridors banks have simply pulled back their coverage as a way of de-risking, so payments get rejected outright or businesses get pushed onto routes that cost more.
When we speak to SMEs we’re hearing the same demands being mentioned consistently. They want end-to-end visibility on fees, FX, ETA and tracking, and they want compliance checks that happen upfront rather than as a last-minute hold. Stronger local payout capability and smarter routing would help too, so there are fewer intermediary hops to begin with. And onboarding needs to actually be built for how a small business operates, which mostly means fast and digital, with a clear list of what’s needed from day one.
EPI: What is X-Net, how does it work, and why does connecting banks and businesses this way solve a problem neither could solve alone?
Violas Xiao:
X-Net is a globally unified settlement and risk management platform built specifically for B2B cross-border trade, rather than something adapted from consumer payments. It works with regulators, banks and payment institutions to push forward standards for fund-flow design, product integration and risk control, and it sits as a settlement and risk layer connecting financial institutions directly to import-export businesses. The goal is to standardise collections, payouts and compliance across everyone on the network, so SMEs get access to the same kind of secure, compliant infrastructure that used to be reserved for multinationals.
I’d compare it to the card schemes, honestly. Visa and Mastercard built the shared infrastructure that transformed consumer payments, and X-Net is trying to do something similar for B2B, going after the structural barriers that have left SMEs underserved for decades.
It uses a multi-bank, multi-region structure so collections and payouts can happen locally wherever possible, with a standardised compliance and risk layer sitting on top so payments get processed more consistently. Routing can then be decided based on corridor, currency, speed or cost, whatever matters most for that particular transaction.
- Individual banks tend to have limited corridor coverage and not much incentive to build SME-specific onboarding or compliance tooling from scratch, and no single SME has the leverage to negotiate bank-level access or clearing relationships across dozens of markets on its own. Neither side can fix this alone, and a network gets you the scale and consistency that neither side reaches by itself.
EPI: The new partnerships with BBVA and Société Générale were announced in June. What do they unlock in practice for smaller businesses that weren’t there before?
Violas Xiao:
The most immediate benefit is corridor coverage, since if one route is constrained there’s another available and you get fewer failed payments overall. Stronger connectivity with these banks should also mean faster, more predictable settlement, and there’s a confidence effect on top of that. Working alongside major global banks tends to reassure SMEs and their counterparties in ways that go beyond just the mechanics of the payment.
Operationally it should mean better-aligned compliance and smoother onboarding, with hopefully fewer cases stalling out entirely. For an SME on the ground that means faster collections and payouts, and fewer moments where a payment just seems to disappear halfway through.
EPI: Where do you see the next wave of SME trade finance infrastructure being built, and which businesses or regions risk being left behind?
Violas Xiao:
Embedded finance will drive a lot of it. Payments, FX and working capital sitting directly inside the platforms, ERPs and marketplaces SMEs already use day to day, rather than being a separate step. Alongside that, interoperable compliance and digital identity should start cutting down on repetitive onboarding checks. Data-driven underwriting, using actual transaction and trade data rather than traditional credit history, should also open financing for SMEs that banks have historically found hard to assess. The underlying shift is toward networked models connecting banks, fintechs and local rails, instead of relying on any single institution’s coverage.
EPI: Looking ahead, what trends do you expect to reshape SME cross-border payments over the next few years, and how is XTransfer positioning itself around them?
Violas Xiao:
Expect more demand for real-time or near-real-time cross-border payments, more pressure for fee and FX transparency with genuine all-in pricing, and tighter compliance expectations around sanctions screening, beneficial ownership and purpose-of-payment scrutiny. Multi-currency operations, holding, paying and collecting across several currencies at once, will keep growing among SMEs, and as supply chains continue to regionalise, new corridors and payment patterns will keep turning up.
On our side, we’re building out our own global banking and payment network, adding more partner banks and local payout and collection routes. We’re putting real investment into compliance automation and standardisation to cut delays and improve acceptance rates, and we’re working on the product experience itself: better tracking, more predictability, smoother digital onboarding. The SMEs we’re designing for run smaller transactions more often than most, and they’re particularly sensitive to time and working capital, especially in markets like Latin America, Africa and ASEAN.
Source: Electronic Payments International (EPI)
Original article: XTransfer’s Violas Xiao on designing cross-border trade for SMEs
https://www.electronicpaymentsinternational.com/features/xtransfer-violas-xiao-designing-cross-border-trade-smes/
