De Nederlandsche Bank (DNB) and Dutch Payments Association study: Number of smartphone payments in P2P transactions is steadily increasing in Netherlands

De Nederlandsche Bank (DNB) and Dutch Payments Association study: Number of smartphone payments in P2P transactions is steadily increasing in Netherlands

AMSTERDAM, 03-May-2018 — /EuropaWire/ — While most P2P payments are still made in cash, the number of smartphone payments is on the rise. Contrary to payments at points of sale (41.4% cash payments and 58.1% electronic payments), cash payments are still the standard for P2P transactions, with 72% being made in cash. The number of smartphone payments in P2P transactions is steadily increasing, however. Compared to 2016, the number of smartphone transactions between family members, friends, colleagues and other acquaintances has tripled to 96 million, which equals 21% of all P2P transactions between acquaintances. Consumers also use their smartphones for other types of transactions, such as for school- and sport-related activities and charities, but to a lesser extent. These data were revealed in a joint study undertaken by the Dutch Payments Association and De Nederlandsche Bank (DNB) into the use of cash and electronic payments in the Netherlands in 2017.

Nearly 800 million P2P payments between Dutch consumers

Dutch consumers not only make payments at points of sale, but also to other consumers. This involves nearly 800 million transactions between family members, friends, colleagues and other acquaintances (459 million transactions), for school- and sports-related activities (98 million transactions) and for charities (244 million transactions), with a total value of EUR 20 billion in 2017. Of these payments, 72% are made in cash and 22% by electronic means such as online and mobile banking transfer, whether or not initiated using a mobile app such as Tikkie, iDEAL, ING, Rabo, Knab, Paypal or Bunq.

Besides cash, Dutch consumers increasingly often use their smartphones for making P2P payments

Paying by smartphone is the most popular option of all electronic payment means. Dutch consumers mainly use their smartphone for effecting mobile banking transfers. Compared to 2016, the number of P2P transfers to acquaintances by smartphone has tripled, to 96 million transactions. The number of P2P cash payments between acquaintances remained the same in 2016 and 2017, a little over 300 million transactions out of the total number of 459 million transactions between family members, friends, colleagues and other acquaintances.

Young adults most frequently use electronic payment methods for P2P transactions

Dutch consumers’ preferences in terms of P2P payment methods vary by age group, gender and education level. Of all age groups, young adults (19-24 years) are the most frequent users of electronic payment methods (43%), and in 75% of these cases they opt for paying by smartphone. They are also the most frequent users of electronic payment methods in point-of-sale transactions. In P2P transactions they pay in cash for over 50% of all cases, while at points of sale they pay in cash in less than 30% of all cases. Women make slightly more P2P electronic payments (23%) than men (20%), as women tend to make slightly more smartphone payments.

New payment methods emerge thanks to innovation and changing consumer behaviour

Technological innovation and ongoing digitisation of economic activities are changing the needs and behaviour of Dutch consumers, a trend that can be observed in point-of-sale payments as well as in P2P payments. The use of electronic payments at points of sale and between consumers is expected to increase further, at the expense of cash payments.

Market parties are making efforts to improve the payment system’s security and efficiency by promoting the use of electronic payment methods. Although the use of cash is decreasing, DNB and the Dutch National Forum on the Payment System (NFPS) believe it is important that cash continues to function as a payment instrument for both consumers and businesses. Consumers should not be forced to make their payments electronically, particularly in situations where they are unable to turn to another product or service provider that does accept cash. The accessibility of the payment system for consumers and the stability of the payment system as a whole must be safeguarded, and consumers being able to make cash payments is part of this.

To read the full findings of the joint DNB and Dutch Payments Association study into the use of cash and debit cards in the Netherlands in 2017, click on the link to the factsheet “Point of sale payments in 2017”. It contains data on the use of cash and debit cards in general, as well as broken down by transaction amount, sector, demographics and seasonal payment behaviour trends. It also provides information on the use of cash and electronic payment methods in Dutch P2P transactions in general, and broken down by purpose and demographics.

SOURCE: De Nederlandsche Bank

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