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13 April 2021 General
Pinnen op de markt

Consumers in the Netherlands used debit cards, smartphones or wearables to pay for 79% of their purchases in shops, restaurants and similar establishments in 2020, which is a sharp rise compared to 2019. As a result of these significant shifts in payment behaviour, 2020 was the first year ever in which consumers opted more often for debit cards over cash for payments in all sectors. Many people also started using contactless payment methods for their purchases, partly due to the COVID-19 pandemic. As a result, not only the use of cash, but also the use of traditional debit cards, which are inserted into payment terminals, declined much more substantially in 2020 than in previous years. These are among the findings of a joint study conducted by the Dutch Payments Association (Betaalvereniging Nederland – BVN) and De Nederlandsche Bank (DNB).

Significant drop in cash payments at the point of sale

The total number of payments made by consumers in shops, bars, restaurants, and hotels, at petrol stations, to market vendors and to service providers fell from 7.0 billion in 2019 to 6.2 billion in 2020, a 12% decline. The average amount paid per transaction increased, however, from EUR 21.56 to EUR 24.04. The use of cash for consumer purchases showed the most significant decline. In 2020, 1.30 billion purchases were paid in cash (value: EUR 21 billion), compared with 2.28 billion purchases in 2019 (value: EUR 32 billion). Debit card payments went up from 4.70 billion (value EUR: 116 billion) to 4.87 billion (value: EUR 125 billion). Most debit card payments – some 80% – are now contactless: consumers use their debit card or smartphone to pay by holding it close to the payment terminal. Consumers were particularly reluctant to pay in cash during the first lockdown in the spring of 2020, when retailers discouraged the use of cash. In the meantime, around one in five purchases is paid in cash, which is still much less frequent than prior to the pandemic, when consumers opted for cash for three in ten purchases.


Major shifts in payment patterns in cash-intensive sectors

Consumer payment behaviour varies greatly from one sector to another. Contactless payment methods were chosen more often in most sectors in 2020, while payments in cash or by traditional debit card dropped off. As a result of these shifts, 2020 was the first year in which consumers opted more often for debit cards over cash for payments in all sectors. The biggest shift took place in street vending (e.g. markets, food trucks). In this sector, contactless payments were used for half of all purchases, whereas this figure was only 18% in 2019. Cash payments showed a drastic decline in this sector: from 74% of payments in 2019 to 43% of payments in 2020. Major shifts were also recorded in specialty food shops (e.g. bakeries, caterers) and in the recreational sector. The share of debit card payments grew in both sectors, while cash payments fell sharply. Consumers used cash for 29% of their purchases in these sectors in 2020, compared to 46% in 2019. Two thirds of supermarket payments were contactless in 2020 (up from 47% in 2019), 18% were in cash (down from 30% in 2019) and 14% were made using traditional debit cards (down from 23% in 2019). Shifts in payment behaviour were relatively minor in sectors where consumers have traditionally tended to opt for debit card payments, such as at petrol stations and when using vending machines.

Figure 2 Breakdown of payment methods (in terms of total number of purchases) by purchase location

Breakdown of payment methods

Significant increase in electronic payments among over-75s

The increase in electronic payments last year was not only reflected in point-of- sale(POS) payments, but also in person-to-person (P2P) payments, such as to family and friends. It is striking that people of different ages often opt for different payment methods. Those in the 25-39 year age bracket pay for their POS purchases electronically the most frequently (85%), while those in the 19-24 year age bracket are most likely to opt for electronic means for P2P payments (76%), for example by using Tikkie/Betaalverzoek or a bank transfer using a mobile banking app. The over-75s are the least likely to use electronic payments, but they did so more often in 2020 than a year earlier. For example, they used debit card payments for two out of three POS purchases in 2020, while they only did so 43% of the time in 2019. For P2P payments – such as allowance to grandchildren – they mainly use cash, but here too electronic payment methods are used increasingly often. Over-75s use online or mobile banking for 34% of P2P payments, while in 2019 they did so for 13% of such payments.

The COVID-19 pandemic contributed to the increase in electronic payments in 2020

In addition to the digitisation that has been going on for some time, the COVID-19 pandemic also played a role in the increase in contactless payments. Encouraged to do so by retailers, consumers made contactless payments more often to avoid infection with the virus when touching the payment terminal or when handing over cash. The Dutch National Institute for Public Health and the Environment (RIVM) has stated, however, that the probability of infection by touching products or surfaces, including cash, is very small. Banks have temporarily increased the limits for contactless payments, so that consumers do not need to enter their PIN codes quite as often.

To read the full findings of the joint DNB and Dutch Payments Association study into the use of cash and electronic payments in the Netherlands for POS and P2P payments in 2020, click on the link to download the “Point of sale payments in 2020” fact sheet.

Point of sale payments in 2020