AMSTERDAM | ABN AMRO Bank, one of the largest consumer banks in the Netherlands, updated its banking app to support for swift mobile checkouts for payment method iDEAL. iDEAL is the most preferred online payment method in the Netherlands and continues to grow in importance. It is expected that iDEAL will surpass 100 million payments in the first half year of 2015. Last year, over 180 million iDEAL transactions were processed for the whole year.
'iDEAL Mobiel' by ABN AMRO Bank
By updating its iOS and Android banking app to support for iDEAL checkouts, ABN AMRO Bank joins the other two leading consumer banks in the Netherlands, Rabobank and ING Bank. These banks already launched their iDEAL supporting bank app back in 2013. The three banks combined serve the vast majority of the Dutch consumers.
Simplified iDEAL checkout
When shopping online through a smartphone- or tablet browser, or in-app, and upon selecting iDEAL as the payment method, the buyer is prompted the choice to pay through the banking app, or via the traditional route, through the browser. Checking out via the banking app is assumed to improve the buyer's experience and to increase conversion by limiting the need for authentication through ABN AMRO's cap reader, the so-called e.identifier. Depending on the beneficiary and the daily transaction limit, the iDEAL payment can be confirmed by just entering the personal 5-digit PIN which unlocks the banking app.
Normally - when checking out through browsers - the buyer or shopper would need to have their bank card and e.identifier at hand. By using the card, the e-identifier and by entering a personal PIN code, a new one-time code is generated which then can be used for authentication and payment confirmation. Especially in a mobile commerce context, the need for a card and reader is known to be a conversion killer and to negatively impact sales.
Mobile Commerce and iDEAL
As the Netherlands is one of the countries where mobile commerce really has taken off, it is of great importance to have payment methods and checkout experiences adapting to mobile, frictionless interaction and consumer expectation. In the first quarter of 2015, over 4.3 billion sales was generated through the e-commerce channel. Approximately 13% was generated through smartphone (2%) and tablet (11%). Around 85% of the total e-commerce sales is initiated on laptop (47%) and desktop (38%) - sourced from the Thuiswinkel Market Monitor 1st quarter 2015.
Last year, the Rabobank already reported that 12% of all iDEAL payments were initiated through the bank's mobile app (only after 8 months since they launched their updated app). ING Bank recently announced the launch of a new version of their iOS banking app supporting for payment confirmation (authentication) through Apple's TouchID. Now the top three Dutch consumer banks support simplified iDEAL checkouts and answer to the 'mobile needs' of both shoppers and merchants, it is expected that mobile commerce growth will keep its current pace.
About Payment Method iDEAL
iDEAL is an online payment method using simplified, real-time online bank transfers (SEPA Credit Transfers) to complete for online and mobile purchases. As a key driver for the usage of iDEAL, over 10 million Dutch people have online banking capability.
There is no chargeback mechanism and merchants benefit from payment guarantee. Processing costs are fairly low in comparison to other online payment options and they are fixed (20-70 eurocent). Consumers feel confident using their familiar home banking and not having to share sensitive card data. Merchants benefit from instant payment confirmation, swift settlement (normally +1 or 2 days) and fixed fees, regardless the transaction amount.
All major Dutch banks support iDeal from both issuing and acquiring side. The acquiring licensees include ABN AMRO Bank, Rabobank, ING Bank, Deutsche Bank and The Royal Bank of Scotland. Click here to see the 'iDEAL Payment Service Providers'.
Article by Erik van den Heuvel, About-Payments, June 22nd, 2015