Netherland Payments Market- Growth, Trends, COVID-19 Impact and Forecasts (2022 - 2027)

Netherland payments market is expected to grow at a CAGR of 12.47% over the forecast period (2022 - 2027). The Dutch payment system has been influenced by technological innovation and evolving payment methods, resulting in a significant decrease in the use of paper-based instruments.

Key Highlights

• TOP, the RTGS system owned and operated by the Netherlands Bank, handles large-value payments. Although the TOP system is designed to handle large-value interbank payments, there are no upper or lower value limits for payments in theory. This is also true for cross-border payments made through TARGET, to which TOP is linked.
• Interpay is developing electronic billing, a new method of electronically processing accept giros without the use of paper forms. Instead of mailing a paper invoice with an accept giro form, suppliers may send it electronically to Interpay, which would forward it to a debtor's bank's website. Debtors can receive a message authorizing them to where they can really find it, so they would electronically sign and deliver their order to transfer the due amount.
• Mobile payments are becoming increasingly popular in the Netherlands, where they are perceived as a safe and efficient payment method. In the Netherlands, this is increasingly possible through Apple Pay, Google Pay, and mobile banking apps. The Dutch also benefit from the iDEAL app, which is the dominant player in payments in the Netherlands, accounting for more than 900 million online transactions per year in 2020, 30% more than the previous year (iDEAL, 2020). Other players include Payconiq and PayPal, though Payconiq recently announced that it would cease operations in the Netherlands for unspecified reasons.
• COVID-19 has accelerated a previously established trend in the Netherlands. According to Eurostat, 91% of Dutch people use online banking apps and features. Cash payments have been strongly discouraged in stores, restaurants, and other public places during the pandemic, resulting in an increase in the use of digital payments. During the pandemic, the Netherlands increased the contactless payment limit from EUR 25 to EUR 50. Further, the cumulative limit for contactless transactions without PIN has been increased from 50 EUR to 100 EUR.
• During the COVID-19 pandemic, most transactions in the Netherlands are made using digital payment methods such as cards or mobile. Consumers are abandoning cash due to the ease of payment and integration with wearable technology and smartphones. The Netherlands has remained a leader in the transition to a cashless society due to its use of wearables as a payment method and high internet banking penetration rates well above the European average.

Key Market TrendsRising users of Digital Payments in Online Sale

• The payment market in the Netherlands is facilitating the transition to a cashless society. Mobile payment innovations, contactless payments, and the closure of ATMs are all signs of a shift away from a cash-based economy. The global pandemic has accelerated this further, where contactless payments are perceived as faster and cleaner. The Netherlands is a pioneer in the adoption of a cashless payment environment.
• Bank transfers dominate the Dutch e-commerce payments market due to iDEAL, the Dutch bank transfer system used for 65% of all e-commerce payments. Payments are made through the iDEAL mobile app or the customer's online banking website. As all Dutch central banks support the method, it provides consumers with the convenience and speed of delivering pre-filled payment information.
• By 2020, iDEAL handled more than half of all e-commerce payment transactions. This domestic bank transfer system, which all Dutch consumer banks support, allows online shoppers to use their debit cards for online accounts. As a result, Dutch consumers used bank transfers for e-commerce payments at a higher rate than EMEA consumers (Europe, the Middle East, Africa).
• The Netherlands is heavily reliant on credit transfers, also known as giro payments. Cheques are rarely used for remote or point-of-sale payments anymore. The vast majority of Dutch households and businesses have multiple payment accounts. Further, the gradual decline in the number of bank branches and ATMs and the rapid increase in the number of payment terminals at points of sale represents a change from cash to electronic payments.

Increasing Internet Penetration in the Netherlands

• Connectivity and internet use have increased in the Netherlands, increasing the availability of online goods, services, and intermediaries to support this growth. This also demonstrates that the Dutch digital economy assists citizens in becoming connected and using the internet to consume online services and initiate online transactions.
• The Netherlands’s internet penetration rate stood at 96.0 percent of the total population in 2022. Ookla’s data reveals that the median mobile internet connection speed in the Netherlands increased by 12.08 Mbps (+14.6 percent) in the twelve months to the start of 2022. Meanwhile, Ookla’s data shows that fixed internet connection speeds in the Netherlands increased by 15.38 Mbps (+18.9 percent) during the same period.
• However, issues relating to COVID-19 continue to impact research into internet adoption, so actual internet user figures may be higher than these published numbers suggest.

Competitive Landscape

Bank transfer is the most popular payment method in the Netherlands, accounting for 58% of all payments, followed by digital wallets (8%) and cards (20%). The iDEAL is used in more than half of all e-commerce payment transactions. This domestic bank transfer system, which all Dutch consumer banks support, allows online shoppers to use their debit cards for online accounts. Credit cards, PayPal, and Klarna/Afterpay were all offered at significantly lower rates than iDEAL.

• February 2022- Apple has announced plans to add Tap to Pay to the iPhone. The new feature will allow businesses to accept Apple Pay and other contactless payment methods via their mobile device via the iPhone and iOS app.
• September 2021- PayPal has announced that the PayPal Business Debit Mastercard will be extended into the Netherlands. The debit card allows small businesses to access available PayPal credit quickly and may provide them with an unlimited 0.1 percent cash back on eligible spending in the Netherlands.

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