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The Dutch Online Retail Sales reached $13,2 billion in 2012 (+9%) | 10.6 million people shop online | iDeal, MasterCard, VISA, PayPal, Acceptgiro and AfterPay preferred online payment methods in the Netherlands | Dutch Mobile Commerce Sales reached $750 million in 2012 | Expected online commerce sales growth 2013 around +8% to $14.2 billion |
Online Commerce Market 2012 | The Netherlands
The Dutch online retail sales in 2012 grew with 9% and accounted for almost 10 billion euro (13,2 billion USD). Over 88 million online orders were placed, an increase of 13%. The total online spend per person is around $1250 (920 euro, +4%).
Over 10.6 million shoppers (+4%) purchased their goods and services at over 22.000 webshops. Main internet sectors were Travel ($3100M, +4%), Airline Tickets ($2000M, +4%), Telecom ($1690M, +14%) and Clothing ($980M, +16%).
Toys ($112M, +28%), Music/Downloads ($139M, +27%) and Home & Interior ($213M, +23%) were the online segments with the strongest growth. The average transaction amount was $ 150 (-4% compared to 2011).
Online Commerce Market First Half 2013 | The Netherlands
For 2013 the online commerce growth is expected to slow down slightly (+8% compared to +9% for 2012). The first 6 months of 2013 resulted in an online consumer spend of around 6,7 billion USD (+8%). These figures include online purchases via desktop, laptop, tablet and smartphone.
Over 8.8 million shoppers (+4%) purchased their goods and services online via desktop, tablet or smartphone. Main internet sectors are Travel ($1690M, +6%), Airline Tickets ($1000M, +4%), Telecom ($925M, +12%) and Clothing ($530M, +14%).
Toys ($42M, +24%), Music/Downloads ($72M, +18%) and Computer Hardware ($500M, +17%) were the online segments with the strongest growth. The average transaction amount was $ 147 (-1% compared to 2012).
Mobile Commerce Market First Half 2013 | The Netherlands
The Dutch mobile commerce market is gaining more and more traction. Based upon the M-commerce Monitor for the first half of 2013 published by Blauw Research, the total mobile commerce accounted for 550 million euro turnover (755 million USD, +67%). The total amount spend via mobile and tablet is around 11% of the total ecommerce sales in the Netherlands (vs 6% last year).
In the first half of 2012 1.5 million shoppers purchased their goods via smartphone or tablet, for the same period this year already 2.3 million people (+53%) bought online using a mobile device. Also the number of purchases and the average amount spend increased, respectively to 12 million (+56%) and 239 euro per mobile shopper (+9%). Same as last year, clothing and shoes remain the most important segment for mobile shoppers (40%), followed by personal care products (22%), computer hardware (21%), music downloads (20%) and airline tickets (19%).
Already over 10 million Dutch people have a smartphone with internet subscription (private and business subscriptions probably) and is one of highest in the world. Next to the smartphone, and maybe an even bigger driver for mobile commerce, is the adoption and usage of tablets in Dutch households. A recent research by Telecompaper indicates that around 3 million households have already one or more tablets. In 64% of all mobile purchases the tablet is the device of choice. 95% of all purchases are done from home (vs 62% on smartphone).
Popular Online Payment Methods | The Netherlands
iDeal is the most preferred online payment method for the home shopping Dutchies. This Dutch bank-driven online debit payment initiative accounted for over 117 million transactions in 2012 (+25%). Back in 2006 only 4.5 million iDeal transactions were processed. In the first half of 2013 over 66 million iDeal transactions were processed (+22%).
iDeal enables the online shopper to initiate a direct debit payment using their own online banking environment at checkout. 81% of the Dutch online spenders have used iDeal and 54% prefer iDeal as the online payment method – according to 2010 research. This research, performed by Motivaction and instructed by Currence – the iDeal product owner, showed that 89% of the webshops offered iDeal, followed by Online Bank Transfer (50%), VISA and MasterCard (both 50%).
Benefits of accepting iDeal
The success is due to the fact that iDeal is perceived as a secure online debit payment by both customer and merchants using the familiar and trusted banking environment. And, as a key driver, over 8 million Dutch people have online banking capability (Eurostats). There is no chargeback mechanism and merchants benefit from payment guarantee. All major Dutch banks support iDeal from both issuing and acquiring side. The acquiring licensees include ABN AMRO Bank, Rabobank, ING Bank, Friesland Bank (=Rabobank), Deutsche Bank and The Royal Bank of Scotland.
Expectations | Number of iDeal Transactions in 2013
The expectations for iDeal for 2013 are to grow with another 20-25% in transaction volume and to exceed the 140 million payments in one year. Especially now the Rabobank and ING Bank optimised their Online Banking App to improve the mobile checkout experience using iDeal (so-called Mobile iDeal). As smartphones and tablets have already found their way to the Dutch pockets and couches, it is most likely that the improved checkout will drive mobile commerce and the number of iDeal transactions. New payment initiatives like Checkpay by PostNL and other parties and sectors adopting iDeal for e-billing purposes, like utility firms, universities and sport clubs, will even further increase the number of iDeal payments.
MasterCard and VISA are the most frequently used credit cards online in the Netherlands. The Dutch Credit Card Market counts more than 6 million cards | Around 70% is MasterCard (issued by the major Dutch Banks). 6-7% of all internet payments are performed by credit card.
All banks support MasterCard SecureCode and Verified by Visa and the majority of online merchants support 3D-secure payments as well, however MasterCard SecureCode and Verified by Visa (3D-Secure) is still assumed to influence the conversion rates negatively, especially when checking out on tablet and smartphone. The eWallet products by MasterCard and Visa, respectively MasterPass and V.me by Visa are expected to be launched and take off in 2014. Worldline (Atos), the #1 commercial acquirer in the Benelux (Belgium, Netherlands, Luxembourg) announced they will support MasterPass by the end of 2013.
Based upon information gathered from different sources the number of PayPal accounts in the Netherlands is estimated around the 3 million users. PayPal enables smaller (Dutch) merchants to accept the major credit cards MasterCard and Visa without the need for a separate merchant account with an acquiring bank (who are sometimes not keen on taking smaller merchants or start-ups). The larger online players active on the Dutch market often offer PayPal as a payment method next to iDeal, MasterCard, VISA and one or more post-payment method to optimise their payment checkout mix and realise the best conversion rates.
Compared to all the other payment methods, and especially for smaller web shops, the costs per transactions are quite high and chargeback risks on credit card payments remain. On the other hand, due to PayPal’s focus on mobile checkout, merchants can benefit from higher conversion rates for purchases conducted on smartphone and tablet. The recent updates by Rabobank and ING Bank on Mobile iDeal, the expected launch of MasterCard’s and Visa’s own online wallets for seamless mobile checkout experiences could impact their market share.
KLARNA AND AFTERPAY
Increasing numbers of Dutch customers prefer to purchase online and Pay-After-Delivery (or post-payment) by using payment methods like Klarna and AfterPay. Both payment methods take over the risk of non-payment and fraud entirely and guarantee the online retailer of payment. Research shows that over one quarter of the Dutch online shoppers prefer open invoice as method of payment. Whether they are new or familiarised to online shopping, the ease of checkout, and the fact that they can pay after delivery gives them confidence to spend online.
Next to ease-of-mind, these Pay-After-Delivery methods drive conversion rates for mobile checkouts. Consumers can easily complete the purchase without the need to enter credit card details or use authentication methods like 3D-Secure or creation of one-time passwords which all are assumed to negatively impact conversion rates.
Contrary to AfterPay, which is mainly focusing on the Dutch market, Klarna operates internationally in 7 European ecommerce markets (Norway, Sweden, Finland, Denmark, Germany, Austria and the Netherlands). Klarna services over 15,000 merchants and processes more than 65 million payments. Klarna and AfterPay are competing for marketshare in the Netherlands. However, both methods are expected to grow volumes as the Dutch ecommerce market itself increases, more and more shoppers prefer to pay after delivery and mobile commerce is getting traction.
Payment Service Providers and Payment Gateways in the Netherlands
Payment gateways or Payment Service Providers are the ‘hub’ for eCommerce merchants to various payment methods. Below all Payment Service Providers that operate on the Dutch Market and support Dutch (local) payment methods. Visit the profile pages of these Payment Service Providers for more information.
Adyen | GlobalCollect | Ogone | Docdata Payments | Payvision | Moduslink | Buckaroo | ICEPAY | Card Gate Plus | DialXS | MultiSafePay | HowPeoplePay | Mollie | Worldpay | Sisow | MultiCards | New E Payment | Pay.nl | Qantani | Smart2Pay | ZayPay | TargetPay | ABN AMRO Internetkassa | Rabo Omnikassa | ChronoPay
Merchant Acquirers in the Netherlands
Merchant Acquirers are the financial institutions that authorise and settle (card) payments. Payment Service Providers are connected to these merchant acquirers and often ‘sit’ between the merchant and the acquiring bank. Below the Merchant Acquirers that are licensed to operate on the Dutch Market.
Note | In the Netherlands there is a clear distinction between card acquirers and iDeal acquirers. For card acceptance, merchants would need to contract directly with these card acquirers licensed by MasterCard and Visa to process transactions. However, the technical integration to these card acquirers is done by the Payment Service Provider or Payment Gateway. In general, these merchant acquirers do not accept merchant integrating directly to their transaction processing platform.
For the acceptance of iDeal, merchants can contract and integrate directly with the iDeal Acquiring Bank OR contract and integrate with a iDeal Collecting Payment Service Provider (CPSP). In the latter case, The iDeal Collecting Payment Service Provider would have the integration with the iDeal Acquiring Bank.
Wordline | MasterCard, Visa, MasterCard Debit, Visa Debit, Visa Electron, Maestro (and Bancontact/MisterCash – preferred online banking payment method in Belgium)
European Merchant Services | MasterCard, Visa, MasterCard Debit, Visa Debit, Visa Electron, Maestro
PaySquare | MasterCard, Visa, MasterCard Debit, Visa Debit, Visa Electron, Maestro, JCB
ABN AMRO Bank | Rabobank | ING Bank | Deutsch Bank | The Royal Bank of Scotland |
iDeal Collecting Payment Service Providers
For merchants willing to accept iDeal payments it is important to understand that iDeal payments can be processed and settled by a so-called Collecting Payment Service Provider (CPSP). Especially for merchants not having a Dutch entity (condition for accepting iDeal) these CPSPs offer them the ability to still accept iDeal payments. By using a Collecting Payment Service Provider, the iDeal transactions are settled to the merchant’s bank account by the CPSP instead of the iDeal Acquiring Bank. In that case the bank account can be a non-Dutch bank account.
About-Payments distinguishes 3 types of iDeal Collecting Payment Service Providers:
1. iDeal CPSP primarily supporting merchants based in the Netherlands
HowPeoplePay | Buckaroo | Qantani | Sisow | Pay.nl | MultiSafePay |
2. iDeal CPSP primarily supporting merchants based outside the Netherlands active on the Dutch market
WireCard | Skrill | Smart2Pay | Payvision | DataCash | Digital River | ExperCash | Skrill
3. iDeal CPSP supporting both merchants based in the Netherlands and merchants based outside the Netherlands active on the Dutch market
Industry Bodies and Useful Links
www.thuiswinkel.org | Dutch Home Shopping Organization
www.ideal.nl | Dutch Online Debit Payment Method
www.currence.nl | Owner and Regulator of home-grown Online Payment Methods like iDeal and Acceptgiro.
Market Research & Publications
yStats | Europe B2C E-commerce Report 2013
UPDATED: 1 November 2013