The online payment landscape is constantly evolving, and in the Netherlands, a significant transformation is underway with the introduction of iDEAL 2.0. iDEAL, the most widely used online payment method in the country, is undergoing a renewal to meet the demands of today’s market and ensure its continued relevance. This article explores what iDEAL 2.0 means for webshops and consumers, highlighting the changes, challenges, and opportunities that lie ahead.
What is iDEAL 2.0? When will it be released?
iDEAL 2.0 is an upcoming renewal of the iDEAL payment method, which is currently the most frequently used online payment method in the Netherlands. The purpose of iDEAL 2.0 is to modernize the scheme interface protocols and update the system to meet today’s market needs and standards. The transformation from iDEAL to iDEAL 2.0 involves significant changes, including the introduction of a wallet structure centered around a central access point (CAP). This allows consumers not only to initiate payments but also to store their data and preferences, such as account information and shipping addresses. iDEAL 2.0 has already been introduced. Throughout 2023 and 2024, the availability of iDEAL Quick Pay and iDEAL Checkout will be expanded to additional locations.
Why is there a new iDEAL? Wasn’t the old one working fine?
The reason for the introduction of iDEAL 2.0 is to update and modernize the existing iDEAL payment method to meet the current market needs and standards. While the old iDEAL system has been successful and widely used in the Netherlands since its launch in 2005, there have been advancements in the online payment landscape, and competition has emerged. Therefore, it is necessary to make improvements to iDEAL to ensure its continued relevance and effectiveness.
In essence, what exactly is changing?
The transformation from iDEAL to iDEAL 2.0 involves several changes. One notable change is the introduction of a central access point (CAP) that will serve as a wallet. This means that in addition to initiating payments, consumers will be able to store their data and preferences, such as preferred accounts and shipping addresses. These changes are particularly beneficial for smaller online merchants who heavily rely on iDEAL and may not have the capacity to offer a complete onboarding process. However, the introduction of iDEAL 2.0 also raises some challenges. One concern is related to GDPR and consumer data privacy. To enjoy the improved customer journey offered by iDEAL 2.0, consumers will need to register and grant permission for their personal data to be shared with banks. Meeting the specific consent requirements of GDPR might be a sensitive issue that needs to be addressed.
What are the consequences for webshops? What do they need to arrange? What opportunities will they have?
The launch of iDEAL 2.0 and the partnerships formed by Currence bring both challenges and opportunities for webshops. They will need to adapt their payment systems to accommodate the new version of iDEAL, comply with potential new regulations, and differentiate themselves in a more competitive ecosystem. However, these changes also offer opportunities for webshops to provide a smoother payment experience, offer flexible payment solutions like spread payments, and integrate loyalty features and age verification. Furthermore, the potential expansion of iDEAL into neighboring countries opens up new market opportunities for webshops to tap into a larger customer base.
What are the consequences for consumers? How will they notice it?
The launch of iDEAL 2.0 and the partnership with Payconiq are expected to bring benefits to consumers. With improved customer journeys, consumers will experience a smoother and streamlined process for making iDEAL payments. They will also have the option to store and share personal details with merchants, making the checkout process more convenient. Additional functionalities will enhance the user experience, and there is potential for value-added services like spread payments and purchase insurance. These improvements may primarily apply to consumers in the Netherlands and neighboring countries, as iDEAL expands its services.
What is iDEAL 2.0 a part of? What else is going to change?
The European Payments Initiative is a venture backed by the European Central Bank with the objective of simplifying payments across Europe. Its formation stemmed from Europe’s desire to reduce dependence on major American companies like Visa, MasterCard, PayPal, Apple, and Google. Despite previous attempts, a unified payment platform for the European Union has yet to materialize. EPI aims to utilize the technology of iDEAL 2.0 to establish an innovative payment platform for Europe. They plan to initiate a pilot project in France and Germany this year, enabling individuals to make digital wallet payments. Their future plans include expanding the platform to other countries and facilitating online and mobile payments for businesses. Additionally, they intend to introduce additional features such as digital identification, deferred payments, loyalty programs, and the digital euro.