Innovaties in de financiële sector | FinanceInnovation

iDEAL leading in Dutch online payments (part 1)

iDEAL is more popular than ever. A study by the European Institute for Brand Management reveals that Dutch consumers rank iDEAL among the top five most indispensible brands. What is the reason for this success? And how much more can be achieved, in the Netherlands and abroad?

It is 4 October, 2005 and the first iDEAL transaction has just successfully taken place. A milestone, thanks to the three large Dutch banks that, in the years prior, joined forces for a new payment solution that simplified offering and making online payments. Before this, each of the banks had its own solution and each separately concluded contracts with webshops owners who had the logos of each bank on their payment pages. But they realised that it wasn’t a great success. Currence, owner of the national payment product PIN, Chipknip, Acceptgiro and iDEAL, became the independent ‘brand owner’ and other banks, including and SNS and at the time Fortis, joined.

iDEAL has since become an essential part of the Dutch e-commerce world and was recently again chosen as the most indispensible financial brand in the Netherlands. Rob Hoitink summarizes the success of iDEAL: “One brand addresses all consumers; everyone can pay directly online via their own bank. And what iDEAL offers entrepreneurs is the guarantee that payment is made and that that payment cannot be undone”.

Hoitink is Product Consultant Online at the Dutch Payments Association (Betaalvereniging Nederland), which organises the joint tasks in the national payment system for its members. It also carries out the activities for the Currence brands and products. iDEAL is not a company but a system of agreements with a brand. Payment providers (banks and payment service providers) are able to offer iDEAL to their customers on the basis of a licence.

Hoitink knows that consumers are becoming increasingly more enthusiastic. “They trust the brand, mainly because they are led to their own trusted banking environment. Moreover, at most webshops it is cost-free and you don’t first have to register or deposit a balance. Anyone who does internet banking can make a direct payment with it from their own account.”

The key to its success in the Netherlands is the collaboration between banks. Hoitink: “In fact, iDEAL is a sort of infrastructure agreement.” In other countries, people are less willing to work together. The payment markets are different there, more ingrained in the country’s culture. England is a real credit card country, just like France. In Belgium people use more cash, whereas the Germans, with their thousands of banks, work more with money transfers.

PayPal is huge internationally. It is independent and self-contained. “We have to coordinate all changes with our licence holders, who then have to integrate them in their IT systems. That’s the downside of collaboration”, says Hoitink. Nevertheless, the Dutch are choosing iDEAL more often, as a result of which the market share has steadily increased to 56%.

“The striking thing is that iDEAL is increasingly being used outside the original e-commerce application. We see, for example, that utility companies are sending a link for an iDEAL payment instead of a giro collection. The market is still offering new opportunities”, says Hoitink.

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