Why iDeal is the ideal payment method in the Netherlands
If you’re doing business in the Netherlands or planning to expand into the Dutch market, there’s one payment method that is essential to boosting sales and increasing customer loyalty.
With one of the top economies in the world and excellent living standards, The Netherlands, a relatively small country with a population of 17.4 million, is a highly coveted market for online merchants. In 2021, online spending by Dutch consumers reached €30.6 billion, an increase of 16% from 2020.
Interestingly, the one thing that sets the Dutch apart from many other countries is the reliance and preference for iDeal as the ideal (pun intended) payment method.
What is iDeal?
In 2004, Dutch banks ABN Amro, ING Bank, Postbank and Rabobank announced they would join forces to provide an interoperable payment platform. This platform was named iDeal. By enabling iDeal at checkout, merchants would make it easy for their customers to make online payments in real-time, 24 hours a day, with low transaction costs, regardless of their bank affiliation.
For the Dutch ecommerce sector, iDeal was a total game changer. Before the introduction of iDeal, customers would either transfer funds manually, or scroll through a long list of banks and payment methods that would transport them to various payment portals.
For a more visual explanation of how iDeal works, take a look at this explainer video:
iDeal adoption in the Netherlands
In the Netherlands, using iDeal is a basic fact of life. There are now about 130,000 entities that offer iDEAL, and more than 50 million iDEAL payments take place each month. It is used for the payment of just about anything you can imagine; from webshops to municipal taxes, from traffic fines to energy bills.
One great benefit of this payment method is its versatility; iDeal can be offered via websites and social media platforms, or sent as payment links through SMS and WhatsApp messages. Just like with regular credit card checkouts, all the relevant payment information (e.g. amount due and merchant information) is already pre-filled, meaning the user only needs to confirm the payment at checkout, typically through a challenge on their device.
Drawbacks of using iDeal?
We had to think long and hard about this. Frankly, there aren’t that many reasons to be wary of the most popular payment method in the country.
- To use iDeal, the merchant and customer need to be affiliated with one of the participating banks. For customers in the Netherlands, this shouldn’t be much of a problem, unless they have gone ‘off the grid’ and are using international neobanks. For international merchants, on the other hand, it might mean additional legal or administrative activities to set up a local bank account.
- Although using iDeal, is the equivalent of a bank translation, the transaction costs are a bit higher. Still, iDeal transactions are a lot cheaper than credit- and debit cards.
Is your business ready for iDeal?
If you’re looking to do business or improve your business performance in the Netherlands, then accepting iDeal payments is a must. Adopting the local preference will inspire confidence among your customers and minimize friction at checkout.
Yet, where do you begin, and how do you integrate iDeal within your current systems? Many questions are sure to arise, some more complex than others. It might be a good idea to have a no-strings-attached conversation with one of our profit boosters. Get in touch with us today through our contact form, or request a demo of our Checkmaxx e-commerce solution.
P.s. Definitely going Dutch and interested in learning more about other Dutch payment methods. Read our article on Tikkie.
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