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How eIDAS is Levelling the Playing Field for Small Businesses

Picture of Gaurav Sharma (guest) Gaurav Sharma (guest) : 15. October 2019

eIDAS
How eIDAS is Levelling the Playing Field for Small Businesses

SME’s are the backbone of any economy. They provide jobs to a broad cross-section of society and strengthen the economic foundation of nations. The EU has numerous regulations in place to help SME’s grow and prosper and uplift the local communities that they operate in as well. However, no matter how friendly the regulations may be, the biggest challenge for SME’s remains their small size. They just don’t have the resources, the manpower or the capital to compete head-to-head with their larger counterparts. 

But is it possible to level this playing field a bit? Can we change some things that can reduce transactional costs to a non-prohibitive level for SMEs? Let’s take a look at just how the eIDAS regulation can help level the playing field by alleviating, at least partially, some of the main SME pain points.

 

Access to Credit 

This is a major hurdle for SMEs because of their smaller balance sheets. With eIDAS, however, SME’s have the opportunity to cast a much wider net for securing credit and doing so without an extra financial burden. eIDAS will boost cross-border banking, providing greater access to SMEs in certain underserved geographies, making the credit marketplace more competitive, and lowering borrowing costs.  

 

Bid Processes 

Bidding for certain contracts can be quite an undertaking. The man-hours spent on the bidding process can have a non-trivial impact on overall costs for smaller companies. They just don’t have the resources to field dedicated armies of people working on this full-time. With the mechanisms that eIDAS enables, small companies can bid for contracts remotely with minimal additional documentation. Rather than having multiple regional offices, the bidding can happen remotely with both parties being confident about the identity of the other.

 

Trade and Trade Financing 

Trade is all about speed, and manual documentary processes just don’t cut it anymore. Each second that a shipment is not moving, it is probably accruing interest somewhere. With eIDAS, trade can be sped up, making it easier to perform transactions. Rather than shipping documentation back and forth and waiting for errors to be corrected, an eIDAS-enabled digital trade platform can achieve the same results in a fraction of the time. Here is a more in-depth discussion on eIDAS and Trade.

 

eInvoicing 

Although this might not be as big a cost center, it certainly matters for SMEs with limited resources. Electronic invoicing allows companies to reduce overheads and cut down their working capital cycle. They can reduce the time it takes to receive payments, eliminate printing or storage costs and, most importantly, reduce the headache of dealing with various national laws across jurisdictions.  

Effective management of Accounts, Payables, and Receivables can provide SMEs (especially capital-intensive businesses) with the financial leverage to turn a profit.

 

Cyber security 

Cybersecurity probably takes the cake for being the number 1 headache for large companies in 2019, at least in terms of additional capital outlays. However, SMEs are probably even more vulnerable to these threats as well as more sensitive to the consequences of a breach.

eIDAS-enabled identity, authenticating, and trust services can help them stay safe without breaking the bank.

 

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References and Further Reading