The deep dive: payment systems in Netherlands

By Puja Sharma

The deep dive’ is our bi-weekly exploration of a relevant topic, hot trend, or new product. For Prime subscribers only.

How does it work?

The Netherlands has recently completed the launch of a contactless transit payments system nationwide, simplifying access and allowing travelers to tap in and tap outfor  with their debit card, credit card, or digital wallet. All public transport across the country – including trains, buses, metros, and trams – now accepts OVpay, an open loop system consisting of upgraded infrastructure and innovative software that ensures frictionless journeys throughout the country and secure payments.

Mastercard played an essential role in the launch of OVpay, partnering with the joint public transport companies and Translink to support local banks with implementing mobility transaction processing rules. The company also ensured the necessary software updates and components were installed to move the country-wide innovations forward.

The simplified payments approach enhances navigation for transit users, which includes millions of residents in addition to visitors to the Netherlands. Not only is it possible to pay with a debit and credit card, but riders can also pay with a smartphone or smartwatch on which the card is uploaded to a wallet.

Who is under the radar?

With OVpay, tickets or public transport passes are no longer required, except those who have a subscription. This improved public transit service benefits everyday riders and tourists alike as it increases efficiency, helps to reduce congestion, addresses environmental concerns, and increases livability.

“We’re more than proud that we supported the Netherlands to be the first country in the world to make checking in with a debit and credit card in public transport nationally available. With this implementation we make public transport more accessible to the wider public,” said Jan-Willlem van der Schoot, Country Manager, Mastercard The Netherlands. “We see that many people faced hurdles when wanting to take public transport. From now on, no need to separately buy tickets or miss your train because the balance on your public transport card is too low. This has been an amazing team effort. So many people worked very hard on it during the last couple of years. It’s incredible to see how our efforts and those of our partners have made this happen.”

Open-loop payment solutions are already accepted in metropolitan areas around the world, including London, New York City, Sydney, and Milan, but have never been launched comprehensively nationwide before.

Why does it matter now?

The Netherlands cards and payments market size was valued at $158.2 billion in 2022 and is expected to achieve a CAGR of more than 4% during 2022-2026. Growth in the payment card market has been supported by well-developed infrastructure, the rise of contactless payments, affordable and widely available financial products, the strong presence of digital-only banks, and consumers’ growing preference for digital payments.

The key payment instruments in the Netherlands cards and payments market are cards, credit transfers, cheques, cash, and direct debits. In 2022, cards were the major payment instrument followed by credit transfers. As cashless payments have increased in popularity, payment cards have been the main beneficiary. This has been supported by a growing preference for contactless to make low-value payments, particularly during the pandemic. The emergence of digital-only banks and the growing eCommerce market will further support card payment growth.