eCommerce & Technology

Security

EU Unfair Commercial Practices Directive 2005/29/EC transposed by NL – Book 6 Part 6.3.3A Dutch Civil Code on commercial practices, consumer information and consumer protection (‘LPMC’) replaced with Book VI of the Belgian Code of Economic Law - Market Practices and Consumer Protection 21 December 2013. Meant to protect consumers from unfair commercial practices such as advertising, pricing and contract terms.

EU Consumer Rights Directive (CRD) 2011/83/ EU amending 93/13/EEC and 1999/44/EC - NL – Book 6.5.2B of the Civil Code and Book 7.1 - 11 March 2014:

1) Confirmation requirements around conclusion of a contract e.g. digital services

2) Clarification of rights with digital products / services

3) Delivery periods made clear and limited changes with agreement

4) Ancillary contracts automatically cancelled e.g. insurance associated with a product which is then returned.

5) Cooling off periods extended; 7 business days to 14 calendar days 6) Reduced refund period – 30 days to 14

7) Linking of receipt of returned product and refund period activation 8) Banning of pre-ticked boxes

9) Improved cost transparency

10) Obligation to pay – clear text at point of order confirmation (‘buy’ button)

ecommerce Directive 2000/31/EC of 8 June 2000 - NL – Amended Civil Code, 11 March 2003 of Civil Procedure, the Criminal Code and the Economic Offenses Act. The purpose is to protect legal aspects of the provision of information society service such as commerce. Requires online traders to meet certain requirements:

1) Impacts most ecommerce traders with some exceptions, such as gambling operators.

2) Provides for the freedom of establishment – allowing traders to conduct business in other EU member states without permission; areas exempt include consumer contracts and financial services products/services

3) Information Requirements – certain business details must be available on the website, including contact information and how contracts are concluded. Failure to display some of the information requirements can invalidate contracts.

4) Commercial communications must be clearly marked as such.

Domestic and preferred card schemes

In the Netherlands a lot of people pay online with iDEAL, an online payment method that allows customers to order online using direct online transfers from their bank account. Since the introduction in 2005 more than 400 million transactions has been completed with iDEAL. 

The number one payment method is iDeal. This payment method that’s supported by the majority of local banks, is the preferred payment method for 55% of online shoppers.

Mobile Appetite

Mobile technology is used widely in both countries with mobile phone penetration in both well over 100%. Smartphones are also gaining traction at 69% in the Netherlands. Tablet usage is increasing, meaning mobile strategy will be an important element for any merchant trading into the region. Around 18% of Dutch e-retail is carried out via a mobile device. Overall, the use of mobile devices for transactions in the Netherlands, at 18.3% of total online retail sales, is only marginally lower than the European average, which is really driven by massive adoption in the UK and German markets.

Alternative Payments Methods

Credit card use online is low in The Netherlands. The predominant payment method is iDEAL, an inter-bank system for online banking. Direct debits (“incasso”) and other bank account-based payment methods such as regular bank transfers are also popular. Circa one third of the population has a credit card, but 98% have a bank account and can use iDEAL and direct debit.

Other Payment Methods

55% iDeal 23% Credit Card 15% Direct Debit 7% PayPal 

 

Custormer Experience

The Dutch market is relatively straight forward from a language perspective. Dutch is the official language but English and German is widely spoken. International merchants would gain a degree of traction in this market using either of these although a native Dutch site would provide more potential. As in any territory, there is always a reluctance to trust online merchants early on in the trading relationship, certainly until a degree of transactional history has been created. Ge ing customers to purchase for the first time is the biggest challenge; keeping them comes down to the strength of the proposition and how closely the brand sticks to the customer promise. In Belgium, key drivers for online purchasing are price (46%) and simple returns (57%).

Payment Security

Consumer concerns around online security and payments is key to the success of online. 15% of Dutch consumers are very concerned about online banking fraud according to data compiled by Statista.com in 2014, while 39% are fairly concerned and these figures go some way to explain the success of iDeal which is seen as being more secure than card payments.

The international card schemes, Visa, MasterCard and American Express have all introduced additional security features for online card payments. The most notable is 3D-Secure. This is a mechanism by which card users have to authenticate themselves during the online transaction by responding to a security challenge, usually providing a full or partial password response. Card issuers in both territories are supporting 3D-Secure functionality and according to the Ogone 3D Secure Barometer in 2014, that latest data available, 60% of Dutch online card transactions are being authenticated by this method.

Local Entities

Almost every major country in the world has a NFIA office: http://investinholland.com/ This network support large and medium size companies to establish an entity in the Netherlands. Access to their network and recommendations are free of charge.

Mobile Payments

Overall, the use of mobile devices for transactions in the Netherlands, at 18.3% of total online retail sales, is only marginally lower than the European average, which is really driven by massive adoption in the UK and German markets.

 

Most Popular Social Network:

Facebook (10M users)

Most Popular Payment Method:

iDeal (55%)

eCommerce Volume:

$22 billion

Largest eCommerce Website:

Marktplaats