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Will The Dutch Market Become Ideal For Doing Business Online?
Monday, August 15, 2005
Selling software online in The Netherlands is cumbersome, since there is no really suitable payment method yet. Credit cards aren't as widespread in this country as they are in the United States. The situation is about to change for the better, however, now that the Dutch banks are jointly introducing iDEAL.
Anyone who has a Dutch bank account and makes use of internet banking can pay with iDEAL. This covers about sixty-three percent of the Dutch households. I suspect that people who don't use internet banking aren't big on buying products online anyway, so most of your customers will be able to use iDEAL.
One of the nice things about paying with iDEAL is that it works exactly the same as transfering money using internet banking. This means that people will already know how to use it.
There is one thing that bothers me, though. I found this little piece of information in the Rabobank FAQ about iDEAL for consumers. (I translated it from Dutch to English.)
What can I do if a reseller doesn't fulfill his obligations after I have payed him with iDEAL?
If a reseller doesn't properly complete a transaction that has been payed with iDEAL, you should always take this up with the reseller directly. The Rabobank is not a party in the agreement between buyer and seller.
I can understand this from the bank's point of view. After all, if I use my PIN-card (do Americans have PIN-cards?) to pay at a store, the bank doesn't take part in that transaction either. I can also imagine businesses appreciating this feature, since customers can't arbitrarily withdraw their payment. However, the consumer will not be so happy.
One of the nice things about a credit card from a consumer standpoint, is that you always have the opportunity to get your money back if your not satisfied with your purchase. There is nothing a reseller can do to prevent that. With iDEAL, this safety net doesn't exist. It's up to the individual web stores to be smart about their money-back policies.
Apart from that, though, I'm enthusiastic about this initiative. It makes it much more appealing for me to translate Trichromix into Dutch and target the Dutch market seperately. I won't be doing it tomorrow, but I'm definitely updating my marketing plans.
I didn't find a central web site for iDEAL, but every Dutch bank has information on it, including a demo, so you can see how it works. Every bank is free to offer its own iDEAL package, which means that prices and services will differ from bank to bank. iDEAL is scheduled to go live in September this year.
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That point could be a problem in terms of fraud. In the US, credit card fraud is not as big of a concern because the card holder is legally liable for only $50, and most companies are good at waiving the $50 anyway. The customer can rest easy knowing that they won't have to pay for someone else using their card. Debit cards, on the other hand, are connected to your bank account (might be like PIN cards there?) and so don't fall under that law. If someone rings up the purchases on your card, you are not protected from those charges under the law and so your money is gone. Debit cards are convenient, but they do have their downsides.
I am not familiar with how payments work in other countries. Do most Dutch online customers get credit cards elsewhere, or is iDEAL the first to offer anything like it?
Monday, August 15, 2005 7:15 PM
From what a friend tells me, debit cards and PIN cards are basically the same thing. Just to be sure: a PIN card is tied to your bank account. You have a personal identification number (hence the name) which you use to pay with your card. You pull your card through a PIN machine, key in your number, confirm the amount of money you need to pay and that's it.
Just about everybody in The Netherlands has a PIN card and people who don't use it are very rare (my grandmother may be one of the last of that breed). PIN cards are the norm over here and credit cards are the exception. You can get a credit card from your bank without too much hassle, but in everyday life you'll never need it. Credit cards are only beneficial if you are going abroad or if you buy stuff on line often.
Personally, I prefer PIN cards, because your payment is written off your bank account immediately, where credit card payments are aggregated monthly. On the other hand, paying with a credit card is so convenient.
On line orders are usually payed the same way as mail orders: with something we call an acceptgiro. It's something like a cheque, but the company you buy from sends it to you with all their bank account information filled in along with the amount you have to pay. You fill in your bank account information, sign it and send it to your bank. The bank takes care of the rest.
Using an acceptgiro is a bit of a hassle because it goes through regular mail, but along with iDEAL, the banks are introducing NotaBox, which brings the entire process I just described on line. Basically, customers are send an electronic invoice and they can pay it on line directly. The introduction of NotaBox is scheduled for early 2006.
Well, hopefully that covers just about everything you never need to know. :-)
Tuesday, August 16, 2005 10:54 AM
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