SMBs Struggle to Balance Global Expansion with Local Compliance

The payments landscape is constantly evolving.

Companies must evolve — even scramble at times — to keep pace with changing rules and regulations that can vary wildly from market to market. After all, the firms that get caught off guard are the ones who wind up paying hefty fines for violations — even if they occur unwittingly.

Executives are certainly aware of the challenges, as surveys have shown that roughly 80% of compliance officers expect to see an increase in regulatory demands in the coming year.

Payments regulations are changing on multiple fronts, Dylan Lowrey, general counsel at Nium, told PYMNTS. The challenges confront all manner of firms that operate globally, including his company, which is licensed in 11 countries and is “passported” into the rest of Europe.

That means operating in 40 countries that have their own considerations about, and ways they enable, payments and payments technologies. They also have their own regulations about consumer protections and data security.

“You cannot take a one-size-fits-all approach to how you tackle all of this — you need to go country by country,” Lowrey said.

See also: Nium and FINCI Team to Boost International Payments

That means “going local, market by market,” he explained. Companies and the platforms they operate on have to strike local relationships with local regulators to make sure that data localization laws are followed.

There’s also the emerging question about how FinTechs, banks and established technology players will interact. An increasing level of scrutiny is being placed on FinTech, said Lowrey, and the platform model (through providers such as Nium) can help stakeholders navigate these regulatory complexities.

“Businesses shouldn’t worry about how to solve for making or receiving payments in a certain country,” Lowrey said. “These are things they can solve for by using the right platform — and the platforms can abstract away from that complexity.”

Getting those solutions from the platform means that companies — especially resource-constrained smaller players — don’t have to grapple with shifting regulations and can instead focus on their strategic, go-to-market goals.

“The costs are defrayed,” he said, “and the speed to market and increasing their global reach are all improved.”

Biometrics Tackle Fraud

Moving into the technologies that help improve security, Lowrey pointed to biometrics as a means to improve authentication. He cautioned that there are no isolated technologies that will stop data breaches, but the continued embrace of device-level protection is an important line of defense against bad actors.

Read more: The Perils Of ‘One-Size-Fits-All’ Authentication

Europe, he said, has been the proverbial high-water mark for payments and data security. In the U.K., he added — despite political turmoil — there has been a record of “consistency and predictability” as regulators, including the Financial Conduct Authority, have firmly addressed data and payments security.

Looking ahead, he said that as compliance officers continue to tackle changes in the compliance landscape, technology will evolve, too, in a bid to reduce friction and improve the payments experience.

“There’s a lot of change coming on the horizon,” he told PYMNTS.