Singapore SMEs turn to SaaS platforms to boost efficiency & growth

New research from the Adyen SME Platform Payments study indicates that 64% of Singapore's small and medium-sized enterprises (SMEs) depend on SaaS platforms for their daily operations and business growth.

This widespread digital adoption comes at a time when SMEs face significant economic pressures. Singapore's economy narrowly avoided a technical recession in the second quarter, while SMEs continue to contend with rising manpower costs, weakening consumer demand, and persistent trade uncertainties. These factors place extra emphasis on efficiency and cost reduction for businesses with limited resources.

Technical inefficiencies, which may once have been considered minor frustrations, are now regarded by SMEs as tangible threats to their profit margins and competitiveness. The study reflects this situation, noting that an increasing number of SMEs are seeking integrated, unified tech platforms that embed functions such as payments, reconciliation, and reporting. Such enhancements aim to translate digital investment into tangible efficiency, sharper cash management, and a firmer base for growth.

"Singapore's small and medium-sized enterprises have raced ahead in their digital journey, with new research from Adyen SME Platform Payments study revealing that 64% rely on SaaS to run and grow their business. However, with rising costs and thinner margins, the emphasis has gone beyond the need for digitalisation; but rather the value and return of investment SMEs are getting. This also comes at a time when Singapore's economy is walking a tightrope – having narrowly avoided a technical recession in Q2. With rising manpower, weakening consumer demand and persistent trade uncertainty, SMEs – synonymous with limited resources – are under pressure to reduce expenses and operate more efficiently. In this environment, technical inefficiencies are no longer just frustrating, they are a direct threat to margins and competitiveness. SMEs are therefore looking to enhance their tech integrations, unified platforms that embed payments, reconciliation and reporting, turning digital adoption into real efficiency gains, sharper cash visibility, and stronger foundations for growth. In fact, 75% of SMEs cite reconciliation as a major pain point, taking up to an average 6-7 hours each week."

Tech integration challenges

The study found that while digitalisation has become the norm rather than the exception for Singapore's SMEs, it has also introduced new complications. Most SMEs reported using multiple SaaS platforms to manage different business functions, with 75% stating their primary SaaS provider offers consolidated reporting. Despite this, nearly half (49%) require more than one platform to handle financial reconciliation tasks. This fragmented technological environment can generate additional costs, integration challenges and data silos.

Medium-sized businesses showed a slightly higher adoption rate of SaaS solutions (71%) compared to small businesses (67%). The tendency to piece together a variety of tools, rather than working with a single, unified system, can lead to escalating issues as the business grows - manifested in increased cost, complex system integration and fragmentation of essential business data.

Reconciliation as a persistent pain point

Financial reconciliation emerges as a dominant operational challenge. Some 75% of surveyed SMEs stated that reconciling payments constituted a significant pain point, and this burden grows with business size: 67% of small businesses and 87.5% of medium businesses acknowledged the issue. In sector analysis, retail businesses reported the highest rates of reconciliation difficulties at 81%, followed by 73% in hospitality and tourism, and 60% in health, beauty and wellness.

Time spent on accounting and reconciliation was notable, with SMEs averaging 6 hours per week. Medium-sized businesses spent as much as 7 hours, compared to 5 hours for small businesses. Retail, hospitality, and health and wellness firms most commonly reported up to 5 hours per week spent on these activities. For SMEs, this loss of productive time is significant, and the systems they choose today will impact their capacity for future growth.

Case study: Backend innovation via embedded payments

The report referenced Atlas, a restaurant technology platform, as an example of how embedded payments can enhance backend efficiency. Through its collaboration with Adyen on the AtlasPay solution, Atlas was able to enable F&B SMEs to achieve substantial gains, including a more than hundredfold increase in Gross Merchandise Value, over fiftyfold growth in revenue, an average 10% reduction in manpower costs, and a 12% increase in direct sales.

PPP Coffee, an SME using AtlasPay, recorded an 80% reduction in operational and finance-related errors post-adoption. Workforce hours have shifted away from manual payment tasks toward customer service, and the time finance teams previously spent reconciling payments has been dramatically reduced.

Features valued by SMEs

Adyen's research highlights that SMEs place greatest value on consolidated reporting, with 36% citing it as the most important SaaS feature. The ability to add new payment methods was next (29%), followed by risk management (17%) and business lending (17%). Use patterns varied: in the retail sector, 39% prioritised adding payment methods to meet customer demand; in hospitality and tourism, 33% cited risk management as their top need due to event-driven demand and operational vulnerabilities.

Switching and investment intentions

SMEs are increasingly discerning about their technology stack, with only 23% of decision-makers saying they are satisfied with their current SaaS provider and have no intention to switch. Among those open to change, 36% prioritised better consolidated reporting as the main reason, while other drivers included more diverse payment methods (15%), enhanced business lending (14%), and improved risk management (12%).

For medium-sized businesses, strong preferences for enhanced consolidated reporting (67%), improved business lending (42%), and better risk management (35%) indicate specific areas driving decisions to shift platforms.

Looking ahead, 72% of SMEs plan to invest further in SaaS platforms in the next 12 months, a figure that rises to 88% for medium-sized businesses. This interest is especially strong among financial services (77%), retail (73%), and hospitality and tourism (67%), with the health, beauty and wellness sector slightly lower (50%). SMEs expect SaaS platforms to provide access to tools once exclusive to larger enterprises, helping them operate in a smarter, faster, and leaner manner.

The integration of payments remains a particularly critical component. Fully embedded payment solutions not only improve operational efficiency, but also furnish SMEs with the necessary tools to contend with Singapore's highly competitive, margin-sensitive business landscape.