It wasn’t entirely without controversy: the first electronic payment in the supermarket. Attracting great media attention, the then Minister of Finance, Onno Ruding, paid for director Ab Heijn’s gingerbread man with a payment card at the Albert Heijn on Amsterdam’s Osdorpplein, exactly 35 years ago today.
At that moment, countless reporters and photographers came to the cash register to capture the moment. “This was a really big step,” says ING Netherlands director Peter Jacobs about this development, which ultimately turned into a payments revolution in the business world. “The minister was in the shop, Mr. Heijn. “Everybody knew: This is something special.”
According to Jacobs, the initiative came not from the bank but from Albert Heijn itself: “It’s hard to imagine, but at that time many customers were using cheques. “It was quite complex,” says Albert Heijn director Marit van Egmond. “At that time, payments by debit card could have been a solution.”
Here’s how the first debit card payment took place 35 years ago:
In 1977, the debit card and security code for withdrawing money from the wall were introduced. In 1985, attempts began to be made to make payments directly at gas stations using cards and codes. However, it was not possible for Albert Heijn to pay by card in the store. “We didn’t really know if customers would use it,” Van Egmond says.
Singing commercials
This suspicion also arose from criticism. The Consumer Council recommended against using bank cards. It would be unsafe. Banks then did their best to prove otherwise. There were sing-along ads (“Pin-pin-pin-pin”) and TV spots featuring Rob de Nijs and Sylvia Millecam (“Friends, you can know everything about me. Except my PIN”).
Singer Rob de Nijs promoted “secure payment by debit card”, among other things:
To reassure consumers, banks have promised to cover the risk if, for example, a criminal manages to clone their payment card. At the time this was thought to be impossible. But after the turn of the century, when the number of payments made by card equaled those made by cash, the magnetic strip proved to be its Achilles heel. It turns out that this is also true on payment terminal fronts.
After this so-called slippage caused banks to suffer a record loss of 38.9 million euros in 2011, the magnetic stripe was replaced with a more secure chip. The drift then decreased rapidly.
As a result, contactless payments and mobile phone payments have increased. Last year, a fifth of point-of-sale payments were made using a smartphone; In 2020, this rate was less than one in ten.
Card replaces cash
There were fears that cash would disappear completely during the coronavirus outbreak, but that does not appear to be the case yet. According to information from De Nederlandsche Bank (DNB) and the Dutch Payments Association, the number of cash payments has remained stable at around 20 percent for three years.
DNB noted that this year more and more stores are no longer accepting cash. It is doubtful whether consumers are satisfied with this situation. Van Egmond, director of Albert Heijn, says debit card payments and direct debits are popular, but other DNB research shows 90 per cent of Dutch people think it is important to be able to pay in cash.
There seems to be a limit for customers with payment innovations for now. For example, Albert Heijn trialled a supermarket without a cash register in 2019. “The plug was pulled again,” Van Egmond replies. “We are constantly thinking about how we can make payments simpler, easier and more fun. But it is up to the customer how he wants to do this. “We are seeing tremendous growth in self-checkout, but it varies from customer to customer and from day to day as to whether customers want to stop there or in the regular checkout line.”
unpredictable
ING also emphasizes that there is “very little discussion” about continuing to pay cash. But Jacobs doesn’t dare predict what the future will be like. “35 years ago we could not have imagined that we would be making payments with our mobile phones today.”
Gijs Boudewijn, director of the Dutch Payments Association, points to possible European legislation that would make it mandatory to accept cash in stores. “What will the world look like in twenty years with a digital euro, metaverse and quantum computers? Joost might know. Technology offers many opportunities as well as risks with new payment techniques. So it wouldn’t surprise me if banknotes continue to be used for years to come, twenty years from now.”
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
