How do the Dutch actually pay - Part II

In the first part, we had a look into what type of financial products the Dutch carry with them and we learnd what is the state of cash in the country. 

Cards are king, but not entirely trusted

Most people still rely heavily on Dutch-issued financial products. Most interviewees had very simple financial set-ups: some had been with the same bank their entire lives, and many had switched banks only once or twice. Many sourced all their financial products from the one bank, including insurance. 

The main way people made payments was using a bank-issued debit card. Few owned credit cards, and those who did would generally use them to make overseas purchases via the Internet. These cards were usually kept at home in a drawer.

Some of our interviewees used contactless payment, but others had not activated it because they are worried that strangers will be able to read their cards and rack up charges. Some interviewees said they would prefer to never use contactless payment, but they are afraid that in the future there will be no choice.

Mobile devices reduce stress and effort

Mobile devices had not substantially transformed the financial practices of any of our interviewees. People generally used mobile phones to do what they had always done. However, the mobile phone has made a significant impact in other ways. The ability to do transactions on the phone increases convenience, and – most importantly – reduces stress by allowing people to make transactions instantly and while on the go. One interviewee was saved by the embarrassment at the supermarket checkout when her payment was rejected, as she was able to instantly transfer money from her business account to her payment account.

Customers are becoming more comfortable with using shopping apps

Mobile devices also make financial life easier at home. When we asked interviewees what they liked most about the financial tools on their phones, we were surprised how many said that they enjoyed being able to do basic banking while sitting on the couch, rather than having to get up and go to the computer. Interviewees told us that they could do almost all of their financial transactions on their mobile, including checking their balance, transferring money, and making payments.

Switching financial service providers is rarely worthwhile

Many interviewees had been with the same bank for years, often for their entire lives. Most could think of no good reason to change financial service providers, since they seem to all offer the same range of services. Two exceptions were:

1. People who switched providers due to a change at the bank: one woman changed providers to avoid having to use a token to log into her account (she preferred a password-based login).
2. People who changed providers for ethical reasons. One interviewee switched to a small alternative bank called ASN Bank because he was not happy when his previous bank privatised.

Some interviewees said they would like to switch banks, but they could not find the time. Our intervewees were far more likely to adopt new services and features than switch providers completely. Some people used bank apps, such as ABN Amro’s Grip app, external tools like What’s Apps “pay me” reminder, or features like QR codes that allowed swift completion of payment.

The trick in motivating consumers to experiment is to make it easy for people to try new things, reduce their stress and anxiety, and also to reduce decision fatigue. Otherwise, the transaction costs are simply too high relative to the expected pay-off.

People are wary of the future of finance

In the fintech world, there is a great deal of excitement about new financial services. Fintech companies and commentators generally paint a picture of a world full of consumer choice and better options. Regulators echo this enthusiasm when they point out that new regulations, such as PSD2 and GDPR, will help consumers have more choices and better control over their data.

However, our interviewees were not excited about the future of finance – they were worried. They were concerned that cash would disappear, they would be forced to use particular services they didn’t like, and that their data would no longer belong to them. As one interviewee put it:

“The future terrifies (...) me. It’s – knowing even slightly a little bit of what I know now, personal information, personal data, and how it’s getting used, and people don’t know it’s getting used because nobody thinks about it. We just blindly accept cookies because, you know. But what you’re actually agreeing to is your data can be used at any point in the future, it’s not yours any more. And that – if a website doesn’t work without cookies, then you do not want to be on that website.”

Why is there such a big difference between what consumers think, and what companies/regulators say? Are companies and regulators failing to communicate this positive financial future to consumers? Or are consumers aware of problems on the ground that institutions are choosing to downplay? Perhaps it is a bit of both. Either way, it is worth investigating further why this gap exists.

About Erin B. Taylor

Erin B. Taylor, PhD, is an economic anthropologist and Principal at Canela Consulting. She has designed and lead qualitative research on financial behaviour in the Netherlands, Haiti and the Dominican Republic. Erin co-produced the Consumer Finance Research Methods Toolkit to help professionals adapt to rapid changes in consumers’ financial behaviour.

 About Canela Consulting

Canela Consulting is a research consulting firm specialising in financial behaviour and technology use. We work with public and private organizations in research design and implementation, program management, capacity development, evaluation strategies, and stakeholder engagement. We combine expertise in the social sciences with deep technical knowledge and business experience.