Towards a European payments market

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Towards a European payments market

• Survey results on cross-border payment behaviour
  of Dutch consumers

Nicole Jonker and Anneke Kosse De Nederlandsche
Bank Prague, 21 October 2008 The views
expressed in this presentation are the
presenters and do not necessarily reflect those
of DNB
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Outline

• Research questions
• Questionnaire
• Results
• CBRP made in other euro countries
• CBRP made towards other euro countries
• SEPA consumers desires and expected behaviour
• Conclusions

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Research questions

• How do consumers pay when being abroad
• and when transferring money abroad?
• What are the current obstacles with respect to
  cross-border retail payments?
• What do consumers desire?
• To what extent will SEPA benefit consumers?

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Questionnaire

• DNB Household panel
• 1407 respondents in February 2007 (response rate
  84)
• Cross-border retail payments (CBRP) made in other
  euro countries
• Cross-border retail payments (CBRP) made towards
  other euro countries
• SEPA consumers desires and expected behaviour

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CBRP made in other euro countries (1)

• Which means of payment do you possess?
• Dutch debit card
• - For national use only 14
• - For national and cross-border use 94
• Foreign euro bank account 3
• - Foreign euro debit card 2
• Creditcard 55

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CBRP made in other euro countries (2)

• Travelling behaviour in 2006
• Frequency
• - 75 of the respondents visited another euro
  country
• - Of which 18 more than 5 times
• Countries
• - Most visited Germany, Belgium, France and
  Spain
• - Least visited Portugal, Luxembourg, Ireland,
  Finland
• Main reasons
• - Holidays (78)
• - Shopping (20)
• - A day out (17)

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CBRP made in other euro countries (3)
How did Dutch consumers pay at ?
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CBRP made in other euro countries (4)

• General cross-border payment behaviour
• Dutch consumers more often use cash and their
  creditcard when abroad, whereas at home the debit
  card is more often used.
• Payment behaviour per country
• Belgium, Germany and Luxembourg high cash and
  debit card usage
• France, Italy and Spain high credit card use
• Greece mainly cash

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CBRP made in other euro countries (5)

• Reasons of payment choice

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CBRP made in other euro countries (6)

• Dissatisfaction by perception factor and payment
  instrument

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CBRP made towards other euro countries (1)

• Cross-border transfer behaviour in 2006
• 26 of the respondents made a CBRP in 2006
• Countries
• Germany (52)
• Belgium (22)
• France (11)
• Austria (6)
• Main reasons
• Online purchases (42)
• Booking a holiday (26)
• Product purchases (23)

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CBRP made towards other euro countries (2)
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CBRP made towards other euro countries (3)

• General payment behaviour
• Most cross-border transfers are made via
  electronic transfers, followed by the creditcard
• People hold and use foreign euro bank accounts
  for specific transactions only

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CBRP made towards other euro countries (4)
Reasons of payment choice
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CBRP made towards other euro countries (5)
Dissatisfaction by payment instrument and
perception factor
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SEPA consumers desires and expected behaviour
(1)

• Opening a foreign euro bank account
• Top 3 reasons
• higher interest rate on savings
• long stay in another euro country
• interest rate on current account balance

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SEPA consumers desires and expected behaviour
(2)

• Switching over from the Dutch PIN debit card to
• a European debit card
• Top 3 reasons
• Lower cardholder fees
• Higher cross-border acceptance
• Less fraud

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SEPA consumers desires and expected behaviour
(3)

• Switching over from Dutch credit transfers
• to SEPA credit transfers
• Top 3 reasons
• if Dutch credit transfers are no longer offered
  by banks
• no additional payment fees
• lower annual bank fees

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SEPA consumers desires and expected behaviour
(4)

• Switching over from Dutch direct debits
• to SEPA direct debits
• Top 3 reasons
• if Dutch direct debits are no longer offered by
  banks
• Easy reversal of incorrect direct debits
• if incorrect direct debits are no longer possible

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SEPA consumers desires and expected behaviour
(5)

• 1/3 of the respondents would not switch to SEPA
  payment instruments voluntarily
• What type of consumers are most likely nót to
  switch to SEPA payment instruments voluntarily?
• Women gt men
• Elderly gt young
• Lower gt higher income and education
• People who seldom make cross-border visits or
  transfers

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Conclusions (1)

• Dutch consumers more often make payments in than
  to other euro countries
• Cross-border payment behaviour differs from
  payment behaviour in NL (more cash and more
  creditcard)
• Payment behaviour and appreciation depends on the
  country visited and on the payment situation
• In general, Dutch consumers are satisfied with
  cross-border POS payments...
• but most dissatisfaction is related to
  cross-border debit card acceptance

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Conclusions (2)

• Remote cross-border payments are often made via
  Internet banking, followed by the credit card
• In general, Dutch consumers are satisfied with
  all remote payment instruments
• but most satisfied with electronic transfers
  and creditcards
• and least satisfied with paper credit transfers

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Conclusions (3)

• Dutch consumers would consider opening a foreign
  euro bank account in case of higher interest
  rates
• Dutch consumers see advantages of a SEPA debit
  card in terms of increased cross-border
  acceptance. Pricing and safety however are
  crucial migration issues as well.
• Safety and prices are key issues for a quick
  migration to SEPA direct debits and SEPA credit
  transfers

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Questions?