NETHERLANDS

EUROPE

As the newest European IP market to adopt SCT Inst, the Netherlands has set up a strong foundation for IP usage to grow aggressively in the next five years.

SCT Inst, the pan-European instant credit transfer scheme, has been offered in the Netherlands since May 2019. The scheme operates 24/7/365 and enables customers to transfer money to accounts at participating banks in the payments network. It supports both individual and business transactions, and facilitates P2P, C2B, B2C and B2B payments directly between accounts via different channels such as online and mobile banking.

Funds are settled nearly instantaneously, with recipient banks in the country required to credit amounts to customers within five seconds. There are no standard transaction limits set in the Netherlands and banks are allowed to set their own limits. However, the regular SCT Inst limit of €15,000 ($17,183) applies to cross-border transactions. As of January 2020, there are a total of eight participants in the Netherlands, and all major Dutch banks support the scheme. All SCT Inst transactions are processed by Clearing and Settlement Mechanisms primarily through Equens/Atos Worldline with connections to TIPS and RT1. Both systems are available to banks in the Netherlands.

Timeline

MARKET DEVELOPMENT

ACCEPTANCE
  • Consumers
  • Banks
  • Merchants
  • Billers

TOTAL PARTICIPANTS

8

Population banking level

2.49

Number of debit, credit and charge cards per adult

100

Index to global average

F

Fully banked

Key statistics

2019

IP launch year

Immediate payments types

Single instance, bulk payments

Initiation & authorization

Bank account

ISO 20022

Message standard

Transactions

65M

2019

1.4B

2024f

84.3%

F5 Yr CAGR

19%

% of adults who have a mobile wallet and have used it in the past year

Share of volumes by payments instrument

Transactions

2019
2024

Spend (USD)

2019
2024
  • Paper-based payments
  • Electronic payments
  • Immediate payments

Immediate payments volume and its share in overall non-paper-based transactions, 2019-24f

% of total electronic payments transaction volume

Insight

The Netherlands is the latest country in Europe to introduce SCT Inst and it is already seeing strong adoption, with more dramatic growth anticipated throughout the next five or more years.

The expansion in both the number and types of companies offering and accepting the network will underpin this future growth, driving incremental use cases for IP and resulting in extended consumer adoption.

Beyond the above-mentioned availability expansion, additional growth drivers exist for activation within the Netherlands. These are similar to those present in other countries, such as the introduction of additional initiation/authorization methods for enhanced convenience, and the opportunity for fintechs to introduce integrations which will make user experience more seamless and drive stickiness of IP.

ACI’s take

Unlike other countries across Europe, in the Netherlands, IP will soon become the new normal. The major banks in the country opted to migrate all of their SEPA batch payments “big bang” to the new IP rails, evidencing the positive attitude towards the benefits of IP.

Rather than being a “nice option” for businesses and consumers, IP will instead become the standard: all account-to-account payments are or will be IP, and in the close future, direct debits will likely become IP, too.

As in the rest of Europe, however, there is a need for more initiation and authorization types — making IP as accessible as possible for citizens and businesses alike. The Netherlands has already proven its strong appetite for digital payments and overlay services with its iDEAL service, which features a Request for Payment. Capitalizing upon this success would be the strategic move for Dutch payment players. That could include migrating the transaction volumes to the lower-cost IP rails, as well as offering new settlement cycles and services to merchants based on IP. Additionally, looking to other markets that have integrated seamless digital services into consumer lives, underpinned by IP — such as social media payments — could be the next catalyst in the Dutch IP evolution.

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