Dutch consumers are increasingly opting to pay contactless both with a debit card and with other methods, such as a mobile phone, according to new statistics released by the Dutch Payments Association.
According to the country’s payments lobby group, at the end of 2021, 63 percent of consumers said they preferred to use contactless payments, up 14 percentage points compared with the same survey in 2020.
“The increase in popularity of these two payment methods has come at the expense of the popularity of debit cards in the traditional way, where the debit card has to be inserted into the payment terminal,” said the association in a statement.
Meanwhile, cash payments in the Netherlands have continued to decrease, which the payments association said was due in part to more prolonged lockdowns in light of COVID-19.
The share of all in-person payments at the point of sale (POS) that were settled in cash fell from an average of 22 percent in 2020 to 20 percent in 2021.
Prior to the pandemic, 30 percent of purchases at the checkout were still paid in cash.
In value terms, the share of cash is even smaller.
Overall, debit cards are by far the most used payment method, accounting for €122.7bn in 2021, equivalent to 85 percent of all payments made at the cash register.
Cash by contrast represents 14 percent and credit cards just a little over 1 percent.
Over-75s cash usage dwindles
The association also noted an important shift in social-demographic groups that use cash the most.
Dutch people with a relatively low income pay the most with cash, highlighting more than other socio-economic groups that they use cash because it allows them to better manage their expenses compared with debit card payments.
One of the standout findings has been the extent in the shift away from cash by elderly users.
In previous surveys, the over-75s were by far the most common Dutch group to use cash, but usage within this group has halved over the past two years to just 28 percent of purchases.
This provides strong evidence that the pandemic has helped create new payment habits even within groups that have been historically resistant to change.
High-earners typically make the least cash payments, representing just one in ten of in-person payments.
Further evidence of falling cash usage and the reliance on it from lower income groups is why the Dutch payments industry, as well as regulators, have made financial inclusion a key priority. Just last week, 23 organisations agreed on a set of principles to ensure cash use remains possible in the face of ever-growing digitisation.
The agreement, which is called the Cash Covenant, has been signed by the Dutch Payments Association, business and banking groups, and the De Nederlandsche Bank, the country's central bank.
Online booming as in-store stagnates
As the Dutch Payments Association documents evidence of changing consumer payments habits at the POS, overall the market stagnated in 2021. There was flat growth in terms of total number of transactions, while the value of payments increased by just 3.5 percent.
By contrast, e-commerce in the Netherlands, which was not covered in the payments association report, appears to be booming.
According to the latest data from iDEAL, the country’s most popular online payment method with an estimated 60 percent market share, there were 1.14bn payments made through iDEAL in 2021, up 28 percent on the previous year.
iDEAL was originally developed by the banking community, including leading banks ABN AMRO, Rabobank and ING, as at the time debit cards could not be used for most online transactions.
Based on this data, e-commerce is estimated to account for around 30 percent of retail payments in the Netherlands in terms of number of transactions.