By Nick Noyer, Head of EMEA Marketing, Stripe
Sixty-four percent of online businesses would sell to 10 or more EU countries if regulation were consistent.
In 2020 we commissioned research with leaders of 500 online European businesses to understand how they would benefit from a more consistent and harmonised regulatory framework across the European Union’s member countries.
Compliance — The challenges
Harmonised standards and tax policies should in principle ease international growth, however our study discovered a significant number of businesses cite regulatory issues as their biggest challenge. The diversity of regulations across the EU is a significant, costly, and an increasingly important challenge in the minds of online businesses. The study found that:
- 72% of online businesses say compliance with regulation is a barrier to international growth
- 33% of online businesses are fully confident that they are compliant with regulatory standards
- 93% of online businesses are interested in using technology to help with regulation and compliance
Tackling the challenges
The results clearly show that diversity in EU regulations is holding businesses back. So what are the methods being utilised to support compliance?
Technology has always been an enabler for businesses, and it can be a means to align necessary regulatory standards and every business’ desire to expand. In fact, 57% of online businesses state that the availability of internet-based technology and tools has made it easier to run their business over the past 5 years. This makes online tech and tools the number one factor in making the lives of our managers and executives easier.
Other than online tools, online businesses reach to other important sources in order to meet their regulatory challenges: 44% pay for external advisors or consultants, and 41% recruit the manpower themselves.
How might technology help more?
The technology, just like the regulations, is seen as too country-specific and rather piecemeal. Ultimately, businesses are looking for an online tool that allows them to seamlessly carry out transactions across the EU and has built-in software supporting the varying tax, VAT, and regulatory requirements across the different markets. An integrated solution to the complex challenge would dramatically reduce the opportunity cost when dealing with regulations across different markets.
The opportunity for tech firms to ‘raise their game’ with compliance solutions is significant. At the same time, there is a need for further harmonisation of regulations across the EU. Regulations themselves drive standards, enabling quality, safety, and differentiation. But unharmonised, opaque, or hidden regulations hinder European businesses and intra-country trade to the tune of billions of euros.
Apart from the obvious approach to continue to streamline regulations across the EU, technological solutions could — and should — be part of the solution. Businesses overwhelmingly believe tech has the potential to assuage their regulatory worries but feel there is far more progress to make.
You can access the full study Synchronising Europe – Regulation, Technology & International Business Growth here for free.