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The Netherlands: Confidence in Cash Remains High

Categories : Cash generates security, Cash is trust
June 15, 2021
Published in : Cash, Central Bank, Consumers, The Netherlands
Over 75% of the Dutch population expect to use cash in 5 years’ time but 42% expect to do so less often, according to a survey commissioned by the Dutch Central Bank.
Guillaume Lepecq

Chair, CashEssentials

Cash payments have been declining steadily in the Netherlands over the past decade, and the pandemic has further accelerated the decline. According to a study by De Nederlandsche Bank (DNB) and the Dutch Payments Association, the share of cash payments in total POS payments fell from 65% in 2020 to 21% in 2020. In 2020 alone, the number fell by 11 percentage points.

Graph 1. Transactions (2a) and transactions value (2b) by payment method, 2010-2020.

Source: DNB.

However, despite the declining use of cash for payments, the Dutch have retained their confidence in cash. According to a recent survey commissioned by the DNB, 76% of the population expect to pay in cash in five years. The figure varies only marginally across age groups, as illustrated by Graph 2.

Graph 2. Survey respondents expecting to be paying cash 5 years from now, by age group (18-29 years, 30-49 years, 50-75 years, total: 1,003).

Source: Panteia 2021.

Euro Banknotes Are Secure…

The Dutch are also confident in the authenticity of euro banknotes, with an average score of 7.7 out of 10, which has been improving over the years. A majority of the survey respondents (59%) have never checked a note for authenticity, and 90% can spontaneously cite a security feature. The watermark and hologram are the most frequently mentioned by 69% and 39% of respondents.

… and Clean

The Dutch are also delighted with the quality of banknotes, for example, the lack of dirt, crumples, graffiti, or sticky tape. 82% of respondents think the notes look reasonably clean, whereas only 2% find them dirty (2%).

High Denominations Are Not Very Popular

One finding of the survey is specific to the Netherlands, i.e., the limited appetite for high-denomination notes. Only 39% of the survey respondents held a €100 note in the past year; the figure drops to 14% for the €200 note and 6% for the €500 note. The three figures have declined by 6 percentage points since 2019.

The DNB attributes this to several factors. First is the difficulty accessing them as they are not often available at bank branches or ATMs; second is the Eurosystem’s decision to stop issuing the €500 denomination. Thirdly, high denominations suffer from a bad perception as half the population associate them with illegal activities; the fourth factor is acceptance as they are increasingly difficult to spend.

In December 2020, the DNB announced it was commissioning a study on the cash infrastructure to explore how it can remain secure, reliable, accessible, at an acceptable cost, in the future. The conclusions are expected in the summer of 2021.