Raynor de Best
Content expert covering payments and (crypto)currencies
Contactless payments and NFC in Belgium, Luxembourg and the Netherlands - statistics & facts
With technological developments happening at a fast pace, more and more payment methods enter the retail market. In recent years, for example, the number of available mobile payment apps in the Benelux countries steadily increased. One specific type of mobile payment is near-field communication or NFC. NFC mainly involves contactless payments made at points of sales, with either a debit card or a mobile phone or payments via QR codes. For customers, contactless is quick and convenient as they simply tap their contactless card or smartphone against a reader and no PIN or signature is needed. For retailers, contactless debit card transaction fees could possibly cost less than with Chip or PIN. Contactless debit and credit cards are already used often in the United Kingdom, where 23 percent of the respondents indicated they used this payment method several times per week. With the Benelux region being in close proximity to the UK, the question begs itself whether Belgium, Luxembourg and the Netherlands also use contactless payment methods.
Contactless payments are relatively new in Belgium and no numbers on this topic are available as of yet. It is estimated that by the end of 2017 all POS terminals in Belgium will support NFC. Payment company CCV Belgium estimated in April 2017 that approximately 0,27 percent of all their processed payments were contactless, showing that as of yet the market for contactless payments in Belgium is small. This could change in the future, however, as Belgian consumers gain more familiarity with new payment technologies. Since the summer of 2017, for example, Belgian banks and retailers started to accept Android Pay. Also, mobile payment methods in general appear to be on the rise in Belgium, as respondents to a large e-commerce survey indicated an increased use of their bank's app along with PayPal in 2017, compared to 2016. NFC use could benefit from these developments, but time will have to tell.
The same goes for Luxembourg: contactless payments are relatively new. The first credit cards with NFC-technology were issued during the early months of 2016 and it’s during 2017 that debit cards are going to receive this as well. Luxembourg newspaper Luxemburger Wort mentions that during the whole of 2016, NFC made up approximately 1.28 percent of all transactions, reaching 3.55 percent of the transactions done in the month of December. High value transactions were conducted the least by customers in the Grand Duchy, as transaction amounts between 100 and 200 euros consisted of four percent of all contactless payments. Instead, credit cards were indicated to be the preferred method of payment by 34 percent of respondents. In 2016, 64 billion credit card transactions were made, both domestic as well as abroad.
NFC is popular in the Netherlands, with support and development coming from domestic banks in the absence of Android Pay, Apple Pay and Pay from Samsung. NFC payments were introduced in the Netherlands in 2014 and since then its use has increased. In the second quarter of 2015, 2.3 percent of the total debit card payments consisted of NFC payments. Two years later, this had increased to a share of 32 percent. In 2016, 50 percent of all contactless payments had a transaction amount of ten euros or less. Between the first quarter of 2015 and the first quarter of 2017, the total number of registered NFC payments in the Netherlands increased from 10.5 million payments in 2015 to 251 million payments in 2017. Despite this popularity, the majority of consumers only uses this technology with their debit cards. Roughly 70 percent of respondents in the Netherlands indicated they never used mobile phone payments before, indicating this is an area where NFC could still improve. This was confirmed in November 2017, when the Dutch Payments Association announced 320,000 Android-users used their smartphone for NFC payments.
In short, contactless payment still have room for improvement in the Benelux region. NFC in the Benelux could in the near future, however, be affected by the implementation of new European rules. In January 2018, the Second Payment Services Directive (PSD2) comes into effect in Europe. The implementation of this payments-related legislation enables bank customers, both consumers and businesses, to use third-party providers to manage their finances. This effectively means that companies as Google, Apple and Amazon gain access to consumers' bank accounts and are able to build financial services on top of the data and infrastructure of banks. Approximately 50 percent of respondents from the Netherlands indicated they were not aware that Apple or Amazon could enter the payment system from early 2018. Especially the arrival of Apple Pay in the Benelux could prove to be an incentive for consumers to use NFC more.
Contactless payments are relatively new in Belgium and no numbers on this topic are available as of yet. It is estimated that by the end of 2017 all POS terminals in Belgium will support NFC. Payment company CCV Belgium estimated in April 2017 that approximately 0,27 percent of all their processed payments were contactless, showing that as of yet the market for contactless payments in Belgium is small. This could change in the future, however, as Belgian consumers gain more familiarity with new payment technologies. Since the summer of 2017, for example, Belgian banks and retailers started to accept Android Pay. Also, mobile payment methods in general appear to be on the rise in Belgium, as respondents to a large e-commerce survey indicated an increased use of their bank's app along with PayPal in 2017, compared to 2016. NFC use could benefit from these developments, but time will have to tell.
The same goes for Luxembourg: contactless payments are relatively new. The first credit cards with NFC-technology were issued during the early months of 2016 and it’s during 2017 that debit cards are going to receive this as well. Luxembourg newspaper Luxemburger Wort mentions that during the whole of 2016, NFC made up approximately 1.28 percent of all transactions, reaching 3.55 percent of the transactions done in the month of December. High value transactions were conducted the least by customers in the Grand Duchy, as transaction amounts between 100 and 200 euros consisted of four percent of all contactless payments. Instead, credit cards were indicated to be the preferred method of payment by 34 percent of respondents. In 2016, 64 billion credit card transactions were made, both domestic as well as abroad.
NFC is popular in the Netherlands, with support and development coming from domestic banks in the absence of Android Pay, Apple Pay and Pay from Samsung. NFC payments were introduced in the Netherlands in 2014 and since then its use has increased. In the second quarter of 2015, 2.3 percent of the total debit card payments consisted of NFC payments. Two years later, this had increased to a share of 32 percent. In 2016, 50 percent of all contactless payments had a transaction amount of ten euros or less. Between the first quarter of 2015 and the first quarter of 2017, the total number of registered NFC payments in the Netherlands increased from 10.5 million payments in 2015 to 251 million payments in 2017. Despite this popularity, the majority of consumers only uses this technology with their debit cards. Roughly 70 percent of respondents in the Netherlands indicated they never used mobile phone payments before, indicating this is an area where NFC could still improve. This was confirmed in November 2017, when the Dutch Payments Association announced 320,000 Android-users used their smartphone for NFC payments.
In short, contactless payment still have room for improvement in the Benelux region. NFC in the Benelux could in the near future, however, be affected by the implementation of new European rules. In January 2018, the Second Payment Services Directive (PSD2) comes into effect in Europe. The implementation of this payments-related legislation enables bank customers, both consumers and businesses, to use third-party providers to manage their finances. This effectively means that companies as Google, Apple and Amazon gain access to consumers' bank accounts and are able to build financial services on top of the data and infrastructure of banks. Approximately 50 percent of respondents from the Netherlands indicated they were not aware that Apple or Amazon could enter the payment system from early 2018. Especially the arrival of Apple Pay in the Benelux could prove to be an incentive for consumers to use NFC more.
