18 Jun 2021
Posted in Banking
Card payments in the Netherlands to grow by 7.7% in 2021, says GlobalData
The Netherlands card payments market, which is well developed and has registered sustained growth for the past few years, is set to increase by 7.7% in 2021, according to GlobalData, a leading data and analytics company.
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “The Dutch payment card market is mature, with a high penetration rate of 2.1 payment cards per inhabitant in 2020, according to GlobalData. Growth in the payment card market is supported by high level of awareness of electronic payments, well-developed infrastructure, and the rise in contactless payments. Although the COVID-19 pandemic has impacted consumer spending, it drove the usage of non-cash payments, thereby pushing the use of card payments in the country.”
Growth in the market has been driven by debit cards, which accounted for 90.5% of overall card payment value in 2020. Dutch consumers perceive debit cards to be more secure and cost-effective, thus making it the preferred card even during the pandemic. Credit and charge cards, on the other hand, are not popular in the Netherlands due to a cultural aversion towards debt. As both consumers and businesses were looking to reduce their expenditure amid the economic slowdown due to COVID-19, this further affected credit and charge card usage.
As cashless payments have increased in popularity due to COVID-19, payment cards (especially debit cards) have been the beneficiary. This has been supported by a shift in consumer preference from cash to contactless for making low-value day-to-day transactions. According to the Dutch Payments Association, by the end of 2020, 85% of all debit card payments were contactless, which is much higher compared to 69% the previous year. To support this, in March 2020, the contactless payment limit in the Netherlands was doubled from the existing €25 ($31) to €50 ($61).
Mr Sharma adds: “The Dutch card payments market remained mostly resilient during 2020. With gradual economic recovery and rising contactless adoption, the card payments market is expected to grow at a compound annual growth rate (CAGR) of 6.7% between 2020 and 2024 to reach €196.3bn (US$240.1bn) in 2024.”