Netherlands: Debit card payments more than cash for the first time in 2015

AMSTERDAM, 20-May-2016 — /EuropaWire/ — In 2015 Dutch consumers for the first time made more payments with debit cards than with cash. At stores, petrol stations, bars, restaurants, hotels and other establishments, consumers settled 50% of all payments with debit cards, 49.5% with cash and 0.5% with credit cards. The data was revealed in a joint study by the Dutch Payments Association and De Nederlandsche Bank (DNB) into the use of cash and debit cards in the Netherlands in 2015.

Between 2014 and 2015 the number of cash payments dropped from 3.44 billion to 3.19 billion. The total value of these payments dropped from EUR 42 billion to EUR 40 billion. Consumers made more frequent use of their debit cards. The number of debit card payments increased from 2.91 billion to 3.23 billion. This means there were 40 million more debit card payments than cash payments in 2015. The total value of debit card payments rose from EUR 89 billion to EUR 93 billion.

Consumers also use debit cards more often for smallest purchases

Consumers traditionally used their debit cards to pay for bigger ticket purchases, while they frequently used cash to pay for smaller purchases. However, in recent years there has been a clear shift towards using debit cards for the smallest purchases. In 2010 consumers used their debit cards to pay for 11% of purchases under EUR 5, while in 2015 they used this method of payment for 30% of transactions. In addition to the discontinuation of the Chipknip electronic purse system on 1 January 2015, this could also be due to the introduction of contactless payments in 2014. This system allows consumers to make payments by placing their debit card or smartphone in close proximity to the POS terminal, without even needing to enter a PIN code for amounts up to EUR 25. This allows payments to be made much quicker and easier.

Debit cards also overtake cash payments in the supermarket

Between 2010 and 2015 all sectors saw an increase in the number of debit card payments and a decrease in cash payments. The method of payment consumers use varies by sector and depends strongly on the amount payable. In supermarkets, where in relative terms most payments are made, in 2015 for the first time consumers paid for most of their shopping using their debit card (53%) rather than using cash (46%). In 2010, 60% of purchases at supermarkets were made with cash.
Over the last five years the shift towards debit card payments was strongest in sectors traditionally dominated by cash payments, such as vending machines (up 44 percentage points) and the hotel and catering industry (up 27 percentage points). Debit card payments increased in the hotel and catering industry, partly due to the discontinuation of the Chipknip and the introduction of contactless payments.
In 2015 consumers continued to use cash to purchase products from street vendors (such as ice cream sellers and market stall holders), at specialised stores selling food, beverages or tobacco and in the recreation sector. Consumers do however use debit cards increasingly more frequently to conduct these transactions.

Teenagers and over-75s pay more often with cash

As in previous years, young adults (19–34 years old) and the highly-educated paid most often using debit card. Teenagers and the over-75s still continue to use cash relatively often: for two out of three purchases. However, in the last two years there has been a marked increase in debit card use among these two groups of consumers, with use among the over-75s more than doubling.
Consumers between 19 and 34 use cash the least: for less than four in ten transactions.

Increase in debit card payments boosts security and efficiency

The shift in consumers’ payment habits away from cash and towards electronic payments offers social advantages such as greater security and lower costs. Banks and retailers entered into a covenant to stimulate the use of a debit cards among consumers. The aim of the covenant is to ensure that by 2018 consumers make 60% of their purchases with debit cards and 40% with cash. As consumers made 50% of purchases with debit cards in 2015, debit card payments must increase by three percentage points over the next three years for the target to be met. This is possible if the rate of growth in recent years continues. Although the use of cash is decreasing, according to the Dutch National Forum on the Payment System (Maatschappelijk Overleg Betalingsverkeer – MOB), it is important for the accessibility and financial stability of point-of-sale payments that cash continues to function well as a means of payment for both consumers and for businesses.

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 2015, click on the link to the factsheet “Paying at the till in 2015”. It contains data on the use of cash and debit cards generally, according to transaction amount, sector and demographics, and seasonal payment behaviour trends. The factsheet also contains information on contactless payments, broken down by purchase amount and sector.

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