For Dutch abroad cash is king

In many situations, cash continues to be the means of payment most frequently used by the Dutch when they are abroad. Compared with the previous year, however, debit card use continued to increase, mainly at the expense of credit cards, according to a recent annual DNB study into how Dutch consumers pay in other euro countries and their cross-border payments to these countries.

This trend reflects the fact that Dutch consumers’ cross-border payment behaviour is increasingly similar to their domestic payment behaviour. The effects of the establishment of the Single European Payment Area (SEPA) are becoming clearer, given that consumers more and more use similar means for their domestic and cross-border payments. The Dutch frequently use their debit cards, also when abroad. In addition, they are ever more satisfied about debit card use in terms of acceptance and safety, with only 4% expressing their dissatisfaction. The trend away from credit cards and towards debit cards in 2012 was most pronounced in consumers’ payments at fuelling stations and for accommodation, public transport and toll. Contrary to past developments, no clear trend in the use of cash emerged. In a number of payment situations cash yielded ground to debit cards. In other situations the use of cash rose, mainly at the expense of credit cards. There is clear evidence, however, of declining credit card use, and of its replacement by either cash or the debit card.

Cross-border on-line shopping lags behind
In recent years, there has been little change in the number of Dutch people making cross-border payments from time to time. This is remarkable, in particular where on-line purchases are concerned, given that on-line shopping in the Netherlands has been growing for several years. The lagging behind of cross-border on-line shopping may be related to language issues or uncertainty about delivery of cross-border purchases. However, DNB’s study also reveals that the payment itself may also play a role in explaining why cross-border on-line shopping continues to remain limited. Although the Dutch tend to be quite happy with the safety, cost, ease of use and speed of cross-border payment options, a clear distinction can be made between people who made such cross-border payments in 2012 and those who didn’t. On average, dissatisfaction about the cost is greater among people who did not make any payment to another European country in 2012, regardless of the means of payment (see Chart 2).

This means that these people are also more dissatisfied about the cost of internet payments to other European countries, which is surprising given that internet payments made by consumers from the Netherlands to other European countries are free of charge, as are their domestic payments. Evidently, there is room for providing further information to consumers. In addition, the migration to IBAN means that the differences between domestic internet payments and payments to other European countries will largely disappear as far as safety, speed and ease of use are concerned. A survey into IBAN awareness reveals that in September 2013 94% of Dutch consumers knew what IBAN is. In addition, 87% knew where to find the IBAN. From February 2014, IBAN will be the standard in the Netherlands, both for domestic and cross-border payments.

Source: DNB Dutch central bank

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