Last week, Dutch minister of Finance, Wopke Hoekstra, writes to the Senate that the Dutch government and the central bank (DNB) conduct periodical research on the acceptance rate of cash at points-of-sale in The Netherlands. Addressing concerns about ATM coverage and safety, Hoekstra gave assurances that Geldmaat, the new shared ATM network, will strive for residents to be able to withdraw cash within a 5-kilometer radius.
In 2017 this acceptance rate in The Netherlands was 96%, indicating that The Netherlands is nowhere near a cashless society. Nonetheless, Hoekstra writes that “The experiences in Sweden and Norway show that it’s wise to carefully monitor the developments and think about the role of cash in the (near) future”, in a letter addressing concerns from the Senate about the functioning of cash as a means of payment. Starting out the letter with assurances about the availability of electronic payment transactions, which was 99,89% in 2018, he continues with stating that the acceptance rate of cash has his full attention and that the Dutch Central Bank (DNB) has indicated to give extra attention to the developments in cash usage.
The two parties in the Senate who expressed their concerns, wanted to know from Hoekstra whether the current Dutch approach would not result in the ‘point of no return’ being noticed too late, as a result of which the Netherlands would end up in the situation of Sweden. Hoekstra pointed out that the share of cash as a means of payment is significantly lower in Norway (11% in 2017) and Sweden (13% in 2017) than in The Netherlands (45% in 2017), but that it’s important to keep an eye on the developments. He also refers to the fact that the National Forum on the Payment System (NFPS), a platform for various interest groups to discuss the efficiency of the payment system, will soon decide whether they will change their position statement about the role of cash in Dutch society. In 2015 and 2017 the NFPS stated that even when other means of payment increase, it’s important for society that cash keeps functioning as a valid payment method.
In response to a question about ATM availability, Hoekstra explains that the combining of the ATMs and cash deposit machines of the three major Dutch banks (ABN AMRO, ING and Rabobank) in Geldmaat, ensures that good coverage is efficiently maintained when it comes to accessibility and availability of cash withdrawal and deposit points. The Dutch apply the so-called five-kilometer standard: a norm that states that residents of the Netherlands can withdraw cash within a radius of five kilometers of their home. Reports show that the national coverage ratio of ATMs is high. Mid 2018, 99.55% of all households in the Netherlands had access to an ATM within a five-kilometer radius (in 2017: 99.58%, in 2016: 99.63%). The parties involved with Geldmaat have indicated that they will continue to use the five-kilometer standard and strive for a national coverage ratio of ATMs that will be at least equal to the level of 2016 (99.63%) and improve where possible. The redesign of the locations where ATMs have been installed takes into account the most recent insights into the safety of the ATMs themselves and of the locations. The ATMs of ABN AMRO, ING en Rabobank will be replaced with the new Geldmaat ATMs during 2019 and 2020.
Although the Dutch will not arrive at a ‘point of no return’ in the foreseeable future, it’s still good to see that members of the Senate are aware of the developments in cash usage in Europe and asking the minister to give clarity on the country’s policies. This is also the lesson other countries can learn from Sweden, according to Jonas Hedman, associate professor at the department of digitalization at the Copenhagen Business School and co-author of the research paper ‘Cashless Society: When Will Merchants Stop Accepting Cash in Sweden. A Research Model.’ In an interview Hedman says: “The government of Sweden hasn’t done much when it comes to this issue of becoming cashless. This is a pity. No politician in Sweden talks about it. The only explanation for this is that talking about becoming cashless doesn’t get them votes. I think it’s an important lesson for other countries. Don’t be like Swedish politicians; don’t ignore this.”