Payment Cards in the Netherlands

Payment Cards in the Netherlands is an invaluable guide to an established payment card market. The report provides statistics on market size, competitor market shares and forecasts. It also provides an overview of regulation, competitor activities, issuer strategy, consumer attitudes, and product innovation including developments in contactless, mobile payments, online payments, and prepaid cards.

Features and benefits

• Detailed market sizing, competitor shares and forecasts are invaluable for any cards player building a business case for activity in the Netherlands.
• Detailed analysis of consumer attitudes allows issuers to target consumers with inside knowledge of their true behavior and needs.
• In-depth insight into contactless, mobile, prepaid and online payments highlights future opportunities for all industry stakeholders.
• Detailed analysis of the Netherland's regulatory framework assists potential market entrants in understanding current and possible future legislation.

Highlights

The Netherlands has a developed payment card market that is largely dominated by pay now cards, with consumers comparatively cautious about using credit cards. It was the only country in Western Europe to record an overall decline in the number of cards in circulation between 2006 and 2010.

The Dutch market is heavily dominated by three large banks – ABN Amro, ING, and Rabobank – which cumulatively account for over 85% of the pay now cards in issue. This is the result of an extended trend towards consolidation as issuers have grown through M&A activity due to the lack of organic growth, and the impact of the credit crisis.

Mobile payments in the Netherlands are being driven by the Sixpack program, which aims to create a standardized payment ecosystem. The program's launch has been delayed, however, while it goes to the European Commission. The collaboratively developed iDeal online payments gateway has also proven popular with consumers.

Your key questions answered

• Which card segments are showing the fastest growth in the Dutch payments market and why?
• Who are the key players in the Netherlands and what is their market share?
• How do the Netherlands' and EU regulatory authorities impact the payment cards sector?
• How extensive are mobile and contactless payments and where does future growth lie?

Tables Of Contents

OVERVIEW
Catalyst
Summary

EXECUTIVE SUMMARY
Sizing and forecasting the payment card market in the Netherlands
Competitor and product developments in the Netherlands
Dutch credit card consumer segments
Online, contactless, prepaid, and mobile payments

SIZING AND FORECASTING THE PAYMENT CARD MARKET IN THE NETHERLANDS
Overview
Key macroeconomic and consumer data
Macroeconomic trends and performance
Demographic and consumer trends
Sizing the payment card market in the Netherlands
Size and performance of the payment card market
Number of payment card transactions
Value of payment card transactions
Trends in payment card use compared to other countries
Credit card balances outstanding, revolve rates, and repayment behavior
Revolve rates and outstanding balances
Repayment behavior
ATM and POS terminal numbers
ATMs
POS terminals
Forecasting the payment card market in the Netherlands
Forecasting the pay now card market
Forecasting the revolving credit card market
Forecasting the charge card market

COMPETITOR AND PRODUCT DEVELOPMENTS IN THE NETHERLANDS
Overview
The competitive landscape
2012: Friesland Bank is to become a subsidiary of Rabobank
2010: following government intervention ABN Amro and Fortis Bank Nederland were merged into one entity
2009: a merger between ING Bank and Postbank was concluded
Key competitors
ABN Amro
ING
Rabobank
Card issuer market shares and performance
Credit card market shares
Balances outstanding by issuing brand
Credit card premium branding and usage
Credit card product features
Leading revolving credit products and price points
Consumer satisfaction by credit card issuing brand
Pay now card market shares
Charge and deferred debit card market shares
Charge card transaction volumes and values by issuing brand
Charge card frequency of use and average transaction value by issuing brand
Card scheme market shares and developments
Pay now card scheme shares
Number of transactions
Revolving credit card scheme shares
Charge and deferred debit card scheme shares

REGULATORY AND ACQUIRING ENVIRONMENT
(Untitled section)
The EU Consumer Credit Directive came into force in February 2011
The Single Euro Payments Area still represents both a challenge and an opportunity to market players
SEPA's impact so far
Industry regulators
Industry associations
Credit bureaux
Acquiring and processing landscape
Dutch consumers are generally more realistic about fraud

DUTCH CREDIT CARD CONSUMER SEGMENTS
Overview
Understanding consumer profiles provides opportunities for issuers to gain market share
Datamonitor has defined two Dutch credit card profiles
Revolvers: consumers who frequently borrow on their cards
Transactors: consumers who pay their balance in full
Credit card holder demographics
Credit card holding by age: low adoption in younger age groups
Credit card holding by income range: a higher income product
Revolver/transactor breakdown: Dutch consumers avoid credit card debt
Financial product holding: credit cards are not a very popular financial product
The majority of credit card holders only have one credit card
Credit card application methods
Pre-application research: Dutch consumers tend not to search the market
Credit card application methods: most applications are now made online
Card switching
Likelihood of switching cards: very few credit card holders are likely to look for a new card
Reasons for not switching: credit card holders are generally satisfied with their existing cards
Consumer attitudes to credit card product features
Reasons for existing card selection: existing credit card holders tended to look for the convenient choice

ONLINE, CONTACTLESS, PREPAID, AND MOBILE PAYMENTS
Overview
Online payments were a €18.5bn market in 2011
The Netherlands is the eighth largest online market worldwide and is worth €18.5bn
iDeal accounts for 38% of online transactions in the Netherlands
Dutch consumers are the third lowest users of credit cards online
Pay now card payments online in the Netherlands are in line with the global average
Being able to browse items is the main obstacle to online spending in the Netherlands
Dutch online consumers favor the comfort of iDeal
Mobile is still seen as the future of payments despite delays in implementation
The Sixpack launch was held up by the European Commission
NFC: interim developments
Consumers in the Netherlands are generally uninterested in mobile payments
The Netherlands offers a poor NFC opportunity
Prepaid
Dutch consumers see no need for prepaid cards
Most prepaid card holders rarely upload more than €70 onto their card each month
Most consumers tend to use their prepaid card for everyday spending
Chipknip
Contactless payments represent a €14bn opportunity in the Netherlands
The Netherlands is the sixth largest opportunity market for contactless payments in Western Europe
Drug stores offer a potential €6.4bn contactless payments market in the Netherlands
Public transport offers a good niche market opportunity
Dutch consumers tend to have a poor knowledge of contactless cards
Dutch contactless users tend to find it more useful than not
Dutch consumers are worried about the security of contactless payments

APPENDIX
Supplementary data
Definitions
(Untitled sub-section)
Methodology
Cards and payments database
Datamonitor's Financial Services Consumer Insight Survey has been expanded, providing improved, new, and valuable insight
Forecasting methodology
Further reading
Ask the analyst
Disclaimer

List Of Tables

Table: Netherlands: macroeconomic indicators
Table: Netherlands: demographic and consumer trends
Table: Datamonitor’s forecast for the pay now card market in the Netherlands, 2010–15f
Table: Datamonitor’s forecast for the credit card market, 2010–15f
Table: Datamonitor’s forecast for the deferred debit and charge card market, 2010–15f
Table: Fees and APRs applicable to revolving credit cards in the Netherlands
Table: iDeal is the main online payment method in the Netherlands

List Of Figures

Figure: The Netherlands has the sixth largest economy in Western Europe, 2010
Figure: The Dutch economy grew by 1.7% in 2010
Figure: Transaction values at the POS and HFCE show similar behavior
Figure: The Netherlands had the third lowest unemployment rate in Western Europe in 2010
Figure: The Netherlands has the sixth highest payment card penetration rate in Western Europe
Figure: The number of pay now cards in the Netherlands declined between 2006–10
Figure: The Netherlands had the fourth lowest pay later card penetration rate in 2010
Figure: Pay now cards dominate the market in the Netherlands
Figure: The highest number of transactions were carried out using pay now cards during 2006–10
Figure: 82.5% of all payment card transactions took place at POS terminals in 2010
Figure: Food and drink purchases account for the largest number of payment card transactions
Figure: Pay now cards are used more frequently than both credit and charge cards
Figure: Frequency of use at the POS and ATMs show diverging trends
Figure: Pay now cards account for the highest value of transactions in the Netherlands
Figure: The value of ATM withdrawals fell between 2006–10
Figure: Flights and hotels account for the highest value of transactions
Figure: Credit cards have the highest average transaction value in the Netherlands
Figure: Average transaction values are higher at ATMs than at POS terminals
Figure: The average transaction value for pay now cards at POS terminals in the Netherlands is lower than the Western European average, 2010
Figure: Six countries in Western Europe have a lower turnover per pay now card than the Netherlands
Figure: Average transaction value of pay later cards at the POS varies significantly in Western Europe
Figure: The Netherlands has the eighth lowest average turnover per pay later card
Figure: Flights and hotel reservations account for the highest proportion of the pay later transaction value
Figure: 77.5% of all credit cards held in the Netherlands are considered to be primary by consumers
Figure: The Netherlands has the lowest proportion of credit cards that are used all the time
Figure: The Netherlands had the lowest revolve rate per outstanding balance in 2010
Figure: 75% of consumers in the Netherlands pay off their balance in full
Figure: The number of ATMs in the Netherlands declined between 2006–10
Figure: The number of POS terminals grew at a CAGR of 4.8% between 2006–10
Figure: The number of pay now transactions is expected to grow at a CAGR of 6% during 2010–15
Figure: The value of credit card transactions is expected to record a CAGR of 5.1% during 2010–15f
Figure: There will be little growth in the number of charge cards in issue during 2010–15
Figure: ABN Amro holds the largest share of the credit card market in the Netherlands, 2010
Figure: ABN Amro accounts for the largest proportion of credit card transaction value
Figure: Credit cards issued by Bijenkorf were used most frequently in 2010
Figure: Consumers at Bijenkorf have the highest average balance per credit card
Figure: Standard cards account for 88% of ANWB’s credit cards in the Netherlands
Figure: 90% of Rabobank's cards are used as consumers' primary credit cards
Figure: Only 12% of ANWB and ABN Amro card holders state that they use the card all the time
Figure: Loyalty points and discounts at retailers are the most common credit card features
Figure: International Card Services (ICS) has the most satisfied customers in the Netherlands in terms of customer service
Figure: ICS also has the most customers who are satisfied with its credit card products
Figure: Overall only 23% of consumers would recommend their credit card to others
Figure: Three issuers account for more than 85% of the pay now market in the Netherlands
Figure: ING had the highest number and value of pay now transactions in 2010
Figure: ING had the highest average transaction value in 2010
Figure: Rabobank was the largest charge card issuer in the Netherlands, 2010
Figure: Rabobank had the highest number of charge and deferred debit card transactions
Figure: Charge cards issued by ABN Amro were used most frequently in 2010
Figure: MasterCard is the largest pay now card scheme in the Netherlands
Figure: MasterCard accounted for almost 97% of the total pay now transaction value, 2010
Figure: The number of pay now transactions increased by a CAGR of 7.5% between 2006–10
Figure: There is close competition in the credit card market between Visa and MasterCard
Figure: Visa accounts for 53.5% of the total credit card transaction value in the Netherlands
Figure: MasterCard accounted for 52% of all credit card transactions in 2010
Figure: The number of charge cards in issue declined by 3.4% between 2006–10
Figure: MasterCard accounts for the largest value of charge and deferred debit card transactions
Figure: The number of charge card transactions was in decline until 2010
Figure: 96% of payment cards in the Netherlands are now EMV-compliant
Figure: 3.4% of Dutch consumers think that they have been a victim of fraud in a shop or restaurant
Figure: 37.1% of consumers are concerned about card and PIN theft at ATMs
Figure: 84.2% of consumers feel that fraud victims should get their money back from their bank
Figure: The over 65 age group has the highest credit card penetration rate
Figure: 17.9% of credit card holders in the Netherlands earn over €65,000 per year
Figure: 75% of credit card holders pay off their balances in full
Figure: Credit cards are not a popular financial consumer product in the Netherlands
Figure: Few consumers hold more than one credit card in the Netherlands
Figure: 73% of credit card holders in the Netherlands did no prior research into the product
Figure: 55% of credit card applications are now made online in the Netherlands
Figure: Most Dutch credit card holders are unlikely to look for a new credit card
Figure: 84% of credit card holders feel that their existing card meets their needs
Figure: 30% of credit card holders chose the card with the easiest application process
Figure: Online payments were worth an estimated €18.5bn in the Netherlands in 2011
Figure: Online purchases are highly popular in the Netherlands
Figure: iDeal is the most popular online payment method in the Netherlands
Figure: The Netherlands has the third lowest proportion of online spending through credit cards
Figure: 15.3% of online spending in the Netherlands is made with pay now cards
Figure: Many Dutch consumers still prefer to browse for items in a store
Figure: 54% of iDeal users feel most comfortable with it as a payment method
Figure: 63% of consumers in the Netherlands are uninterested in mobile payments instore
Figure: Dutch consumers are the least likely to adopt NFC globally
Figure: 72% of Dutch consumers feel that they have no need for a prepaid card
Figure: 36% of prepaid card holders tend not to upload money onto their card each month
Figure: 60% of prepaid card holders use them to pay for all their regular spending
Figure: Chipknip logo
Figure: Contactless payments represent a €14bn opportunity in the Netherlands
Figure: Drug stores offer the biggest opportunity for contactless payments in the Netherlands
Figure: 54% of consumers in the Netherlands say that they have never heard of contactless cards
Figure: 37% of contactless card holders use it regularly and find it helpful
Figure: 63% those who do not own a contactless card are concerned about security