May 2018 marked the first period of 12 consecutive months where the share of debit card payments at POS surpassed that of cash, reaching 60%, The Dutch Central Bank (DNB) reports. Cash payments reached an average of 40% of total payments, the opposite of 2014 where these figures were reversed. This is the first clear sign of a decline in cash usage, a trend that worries the central bank.
The frontrunners in terms of debit card use are young adults aged 19 to 24, accounting for 77% of their payments in the first half of 2018: a growth rate of 9% compared to the first 6 months of 2017. Those who have also shown a preference for debit cards are women, 55-64 year-olds, citizens with medium level education and university graduates (+4%). Those least keen to adopt non cash payments were the 25-34 age group and those with low-level education (<1%).
In the meantime, cash is gradually being replaced by digital payments in Dutch shops and by the public transportation system – which became cash free this year. Retailers such as Marqt and Vlaamsch Broodhuys stopped accepting cash and some supermarkets are developing “pin only” checkouts.
Coen Voormeulen, Cash and Payment Systems Division Director at the DNB, warns about the potential problems a cashless society could bring, classifying his country as “vulnerable” in his interview to AD newspaper. He believes the Dutch should always be free to choose their preferred method of payment, including cash. “Many people have trouble with cards: some of the elderly, the visually impaired. There are also 2.5 million low-literate people.” Another concern is that digital payments are more susceptible to hackers and system failures.
DNB relies on banks, retail, the government, and interest associations to reach an agreement that guarantees access to cash everywhere: “If that does not work, you can think of rules”, Voormeulen said. Let’s hope the interest of all consumers, and not only certain groups, prevails, to make payment choice truly free.