Paying Those Bills

This week I thought I would touch on a couple of features of banking and payment here in The Netherlands. Much like in the US, we have an account with a bank card.  The bank card has a chip and pin system.  When we are shopping at a physical location, we can tap the card for purchases under a certain price threshold, or we insert the card into a reader and enter our pin.  In addition, servers at restaurants and some vendors that deliver to your home such as our grocery delivery, carry a pin reader machine.  Rather than giving them your card to swipe, they insert the bill amount, you insert the card yourself and then enter the pin.  Finally, there are plenty of ATM machines at which we can get cash should we want it.  But, interesting fact about purchases in The Netherlands-very few people use credit cards and we don’t have checks.  So, you might ask how we pay for online purchases and bills we receive.

For online purchases outside of The Netherlands or when we travel outside of the Netherlands, we do have a credit card.  There isn’t much of a way around this.  However, for purchases within The Netherlands, we can use an online payment system called IDeal that transfers money from your account to a vendor.  This can be used for any online purchase.  There are two ways it works.  When you are ready to check out, you simply select that payment option and enter your bank name.  Then, if you have the mobile banking app, it will just bring up a page with your bill details.  When you select to complete the transaction, your app opens and you put in your passcode (different from your pincode that you use with a physical reader machine) and the transaction is complete.  The other option is that a barcode is generated as your payment details, and your banking app uses a barcode scanning feature on your phone so that you can scan the barcode which then brings up your payment details.  You then follow the same procedure of putting in your banking passcode to complete the transaction.   If the amount of the bill is over a certain value, then you use a verification system.  When you sign up for your account you receive both your bank card and a verification machine.  It looks like a little calculator.  When you need to verify a transaction, you slide your card into the machine and put in the code provided on the verification payment page.  Then the machine generates a code that you put into the verification payment page.  It’s just an added step to make sure that transactions are legit.  


When we receive a bill from a service provider such as a doctor, our children’s music teachers, our school, a repair person, the government, etc., we go into our banking app and select to make a transaction.  We then put in the recipients name and account number which includes both letters to identify which bank their account is with and numbers to identify their account (yes, my American friends, I just said that people give out their account number in order to receive payment).  The app will note if the name and account match and if they don’t, you can still proceed, but you have received notice that something might be incorrect.  You then add the payment amount, a description of what the payment is for or a reference/statement number and when it should be paid.  You can also select if it is a recurring payment or simply a one time payment.  When you select complete, you are asked to enter your bank passcode and then the money is transferred.  It’s incredibly easy and saves on a lot of mailing in of bills.  It also allows people to transfer money to one another without having to write and then cash a check.  

So, there you have it.  The ease of payment in The Netherlands is really nice and there is very little concern of the security being compromised.  It’s just another piece of Dutch daily life.  Until next time!


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