A 13-year journey towards more secure and efficient payments

Source: Stichting Bevorderen Efficiënt Betalen

Pay cheaper, more safety, fewer faults and less cash. Chairman of the Foundation to Promote Efficient Payments Jacques Parson ticks it off.

Payment Systems Covenant ends with great results

At the end of 2005, Dutch banks and point-of-sale institutions (retail, catering & hospitality, petrol stations) signed up to the Payment Systems Covenant (Convenant Betalingsverkeer). Their joint efforts resulted in more secure, efficient and reliable payments in the Netherlands. This year, the Covenant ends. In the auditorium of De Nederlandsche Bank (or DNB, the Dutch central bank) a conference has been held on 30 Oktober on the results of 13 years of cooperation within the Foundation to Promote Efficient Payments. The concerted efforts have led to substantially increased numbers of both debit card terminals and debit card payments. The Netherlands is leading the way in the eurozone. In addition, the costs of debit card payments have fallen significantly for businesses in the Netherlands. Banks and point-of-sale institutions are happy with these results.

This video shows the highlights in 13 years of the Foundation to Promote Efficient Payments:


Debit card payments everywhere

There are over 360,000 debit card terminals in the Netherlands. Payment by debit card has been standard practice in retail and at petrol stations for many years. In the itinerant trade and in catering and hospitality, the possibility to pay by debit card has increased significantly more recently. Debit cards are accepted at 92% of catering and hospitality outlets, up from just 50% in 2005. In the itinerant trade, 85% of traders now accept debit cards, whereas that figure was just 21% in 2005.

Target achieved: 60% debit card versus 40% cash

Since 2005, the number of debit card transactions has more than tripled, from 1.3 billion in 2005 to over 4 billion in 2018. Large-scale public campaigns contributed to this significant growth. Signs saying ‘charge applies for low-value debit card payments’ have virtually disappeared. Thanks to the advent of contactless payment, consumers increasingly use debit cards for small payments. One-third of all debit card payments are now for less than €20.
The proportion of 61% debit card payments against 39% cash payments achieved by mid2018 amply exceeds the target set by the foundation: 60% debit card payments versus 40% cash by the end of 2018.

Less cash for criminals

Reduced use of cash has made payments in the Netherlands safer and more secure. Empty tills are not attractive to criminals. As a result, the number of thefts at retailers, at hospitality and catering outlets and at petrol stations fell from 1,171 in 2008 to 377 in 2017.

Between 2011 and 2017, losses from skimming debit card mag stripes fell from € 39 million to € 1.5 million, mainly thanks to the introduction of chip cards at the end of 2011. Consumers no longer pay using the magnetic stripe, but instead use the EMV payment chip integrated in the debit card. The foundation helped businesses to replace their payment terminals more quickly. Targeted promotions and commercials ensured that everyone was informed. Meanwhile, the banks fitted all payment cards with the EMV payment chip.

Lower payment costs for businesses

The increasing use of debit cards and innovations such as contactless payment resulted in the cost of the average debit card transaction dropping from 27 eurocents in 2002 to 17 eurocents in 2017. The average cash payment now costs a business 29 eurocents. In 15 years, the average cost of cash payments has increased by 93% while the cost of debit card payments has fallen by 58%. A cash payment is now 70% more expensive than a debit card payment. The frequent use of debit card payments has saved Dutch businesses 1.2 billion euros over 13 years.

Reliability improved

The rise in electronic payments also increases the dependency on the infrastructure. Banks, telecom providers and transaction processors have therefore worked hard to improve the reliability of their systems. The likelihood of a malfunction has fallen sharply. The availability of certified datacom services for debit card payments is currently 99.9%.

An overview of 13 years Foundation to Promote Efficient Payments is presented in this book.

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