The Dutch payment system was characterised by digital innovation, high availability of popular payment chains and very little damage by fraud. The annual report for 2016 of the Dutch Payments Association shows developments that put the Netherlands in the European forefront for speed, ease, reliability and security of the payment system.
Dutch consumers increasingly buy and pay online
Online spending in the Netherlands in 2016 grew by 23% compared to 2015, to more than 20 billion euro. 57% of all online payments were paid using iDEAL, followed at considerable distance by credit cards. Last year, iDEAL was used 283 million times, an increase of more than 27% in comparison with 2015. The share of mobile iDEAL payments had risen to 38% of the total number of iDEAL payments.
Less cash with over-the-counter payments
Since 2010, the number of debit card transactions has risen by more than 60% to 3.6 billion transactions in 2016. This high growth is due to the substitution of cash payments by debit card payments, also for small amounts. In 2015 the number of debit card payments overtook the number of cash payments at points of sale. By end 2016 a quarter of all debit card payments were initiated contactless, with cards or smartphones (almost five times as much as in 2015).
Debit card payments in the Netherlands are relatively low-priced in comparison with other EU-countries. If the social cost of cash and debit card payments in the Netherlands would be at the EU-average, the overall cost would be one billion euro higher per year than it is today. Contributing to the high efficiency in the Dutch payment system is the alliance between banks and retailers in a Payment Covenant dating from 2005 and extended until 2019.
Credit transfers and direct debits are mostly electronic
Dutch consumers mostly use computers, tablets or smartphones to transfer money electronically. Last year, 91% of bank customers used online banking and 54% used a mobile banking app. In 2016, consumers submitted a mere 2% of all payment requests on paper forms (10% in 2005). In the Netherlands, direct debit is a popular payment instrument. With ‘digitaal Incassomachtigen’ payers can submit electronic direct debit mandates to collectors, securely and efficiently, via the trusted online banking interface of their own bank.
Instant Payments and high availibility of payment chains
The availability of popular electronic payment chains is very high in the Netherlands, for debit card payments and online payments with iDEAL, as wel as for mobile and online banking. Out of every 1000 debit card transactions initiated in 2016, 998 succeeded immediately, at the first attempt. During prime time, between 7h00 AM and 1h00 AM, online and mobile banking platforms were 99,7% available. Prime time availability of the iDEAL online payment system was 99,66%.
Banks, payment service providers and other stakeholders continue to make collective improvements in these payment chains. The Dutch banks aim to introduce nationwide Instant Payments in 2019. With Instant Payments a mobile or online credit transfer will be credited to the beneficiary’s payment account within seconds, 24 hours a day, 7 days a week, including bank holidays.
Fraud with payments sharply lower
In the Netherlands, the total damage due to fraud with payments has fallen steadily from 81.8 million euro in 2012 to 10.2 million euro in 2016. The joint efforts of banks and other stakeholders are bearing fruit. Public-private partnerships, such as those in the National Cyber Security Centre and the Electronic Crimes Task Force, contribute to this result. Banks keep improving their fraud monitoring an detection systems and invest in public awareness campaigns about how to safely pay using cards and online banking.