Banks have ceded a $1.2 trillion e-commerce credit gap to fintech lenders across Asia Pacific, according to a new report from Quinlan & Associates. Global e-commerce platforms generated $13.2 trillion in gross merchandise value (GMV) in 2025, spread across more than 31 million active third-party merchants, and banks captured only a shrinking slice of the credit those sellers need to keep operating.
The shortfall traces back to how banks still assess risk, not to any lack of demand. Three paths back into the market remain open, and most banks are still choosing the one that keeps them furthest from the merchant relationship itself.
A $1.2 Trillion Gap Opens Across Asia’s Storefronts
Quinlan & Associates, a Hong Kong based strategy consulting firm, published its findings in a report titled Banking on E-Commerce. The firm sizes the region’s unmet e-commerce credit demand at $1.2 trillion for 2025, an opening banks were positioned to fill given how much data these platforms generate.
E-commerce platforms capture standardised, contextualised data on both fund flows and order fulfilment, the kind of real time signal that should sharpen underwriting. Plugging into that data and expanding lending would have been the logical move. Banks did the opposite: operational friction and steep onboarding costs kept most of them disconnected from the e-commerce ecosystem they were built to serve.
- $13.2 trillion in global B2B and B2C e-commerce GMV during 2025
- $1.2 trillion Asia Pacific e-commerce credit gap in 2025, per Quinlan & Associates
- 55% of global business to consumer e-commerce GMV comes from Asia, more than double the Americas’ share
- 42% of global business to consumer e-commerce GMV belongs to China alone
Fintech lenders moved into that space over the past decade. The open question now is whether banks can still take a more direct role through co-lending or direct merchant loans.
Banks Are Reading Last Quarter’s Numbers in a Live Market
Banks have long leaned on historical financial statements when extending loans to small and medium sized enterprises (SMEs). That approach leaves them without the models to read predictive, real time signals such as revenue trends and order velocity, the two indicators that matter most for a merchant selling through an app rather than a storefront.
E-commerce merchants often end up lumped into broader retail or SME risk pools as a result, where their credit risk gets overstated. Alternative lenders working with richer data have already shown what banks are missing: cuts of up to 80% in 90 day non-performing loan (NPL) ratios compared with conventional scoring, according to the report.
The barrier runs deeper than risk models. Many e-commerce SMEs carry financial records that are under-documented or unaudited, which can make them ineligible for bank financing outright. Many also take up to two years to break even, a runway few young sellers can wait out while a bank decides. Only 23% of Association of Southeast Asian Nations (ASEAN) e-commerce SME merchants have ever received support from a traditional bank, the report found.
Loan Products Built for a Calendar E-Commerce Outgrew
Even merchants who clear the credit hurdle often find the products waiting for them don’t fit. Traditional SME loans are built around stable, linear cash flow. E-commerce revenue moves in spikes tied to campaigns and seasons rather than a steady monthly rhythm, and the swings are large enough to break a conventional repayment schedule.
- Peak month sales in China’s e-commerce market run 68% higher than the annual average
- Blockbuster campaign days on Shopee push daily sales to 14 times their normal volume
- Campaign days on Lazada drive daily sales to 10 times their norm
Even large banks have started studying the mismatch. Citigroup has published its own treasury and trade solutions white paper on e-commerce merchant finance, evidence that at least some of the largest lenders know the old repayment calendar no longer matches how online sellers actually get paid.
Where Does the Merchant’s Money Sit?
Merchant funds sit inside the e-commerce platform’s own accounts, out of the bank’s direct reach. That leaves lenders with limited visibility, and even less power to enforce repayment once money starts moving through platform-controlled channels.
The risk cuts in more than one direction. Platform actions such as account suspensions or fund freezes can choke a merchant’s cash flow overnight, taking their capacity to repay along with it. Merchants themselves sometimes spend those platform balances before a repayment obligation even comes due.
Neither scenario shows up in a bank’s usual collateral checks, because the collateral, in this case, never left the platform to begin with.
Two Years Just to Break Even on One Merchant
Onboarding a micro, small and medium sized enterprise (MSME) weighs banks down with manual document checks, costly third-party verification services, legacy system integrations, and the ongoing compliance burden of cross-border activity. Missing paperwork, secondary reviews, and mapping a corporate hierarchy to trace ultimate beneficial owners all still require a human to sit with the file.
Banks can take up to two years to break even on the know-your-customer (KYC) costs of a single MSME client, the report found. That is a separate two-year clock from the one merchants face reaching profitability: this one belongs to the bank, recovering what it spent getting one small seller through compliance before the relationship turns a profit.
Barclays Sold Its Merchant Business to Brookfield
The retreat is already visible in deal activity. American Banker reported that Barclays finalized an agreement in April 2026 letting Brookfield Asset Management, the Canadian asset manager, acquire a majority stake in its payment acceptance business. Banks have broadly deprioritized merchant services amid shrinking margins, the trade publication found, favoring card issuing instead.
Merchants have noticed the shift. Capgemini, the consulting and technology firm, found that 40% of small and mid-sized merchants plan to shift to a payment-focused fintech within 12 months, even though 66% still say they trust banks with financial services more than fintechs.
The pie both sides are fighting over keeps growing regardless. Market research firm Coherent Market Insights values the embedded lending market at $9.25 billion in 2026, projecting it will climb to $34.73 billion by 2033 as credit gets built directly into e-commerce and point-of-sale checkouts. Walmart and Target have already partnered with fintech providers to embed credit at checkout, normalizing a lending relationship that never touches a bank branch.
Three Doors Back Into the Market
Quinlan & Associates maps three routes back into e-commerce lending for banks willing to take them, each a step closer to the merchant than the last.
| Route | Bank’s Role | Risk Exposure | What the Bank Keeps |
|---|---|---|---|
| Warehouse financing | Supplies wholesale capital to a specialist fintech lender | Lowest; the fintech carries the credit risk | A funding fee, no merchant relationship |
| Co-lending | Jointly funds loans alongside a fintech partner | Shared with the fintech partner | Shared yield and partial merchant data |
| Direct lending | Underwrites and lends straight to the merchant | Full exposure, held on the bank’s own book | Full yield and the entire merchant relationship |
Most major banks have picked the first door. It keeps them funding the very fintechs that compete with them, at a comfortable distance from the merchant relationship. Quinlan & Associates finds the stronger economics sit behind the other two doors, in the yield and the borrower relationship that come with co-lending and direct lending.
So far, most of the industry is still standing at door one. The other two remain open.
Frequently Asked Questions
What Is Warehouse Financing in E-Commerce Lending?
Warehouse financing is the most cautious entry point for a bank: it extends a wholesale credit facility to a fintech lender that specializes in e-commerce merchant loans. The fintech handles origination, underwriting and the merchant contact while the bank supplies capital from a distance, which is why most major banks have stuck to this route so far.
How Is Co-Lending Different From Direct Lending?
Co-lending has a bank jointly fund loans alongside a specialist fintech partner, splitting both the credit risk and the yield between them. Direct lending skips the partner: the bank underwrites and owns the merchant relationship itself, carrying full exposure but keeping the entire yield and the data that comes with it.
Why Can’t Banks Access Real-Time E-Commerce Sales Data?
Banks simply lack direct pipes into the order and fulfilment data e-commerce platforms hold inside their own systems. Few platforms grant that access the way they do to an in-house lending arm or a preferred fintech partner, which is also why co-lending deals, which usually come with a data-sharing clause, are gaining more traction than banks trying to build the access alone.
Which Region Carries the Largest E-Commerce Credit Gap?
Asia Pacific carries the heaviest concentration, since the region drives more than half of global business to consumer e-commerce activity and China alone accounts for a large share of it. The gap tends to be widest wherever GMV growth has outpaced banks’ willingness to build merchant-specific underwriting, and so far that has meant Asia far more than the Americas or Europe.
Can Small E-Commerce Merchants Get Bank Loans Today?
Very few do. The ones that succeed usually already have two to three years of audited financial history, collateral, or an existing banking relationship in place. Most fast-growing online sellers don’t clear that bar early, which is why fintech lenders evaluating live sales data, not tax filings, have become the default financing route for younger merchant accounts.
