Netherlands Digital Banking

Part
01
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Part
01

Challenger Digital Banks: Netherlands

The top four challenger digital banks offering banking service to businesses in the Netherlands are Bunq, N26, Revolut and Monese.

BUNQ

  • Bunq is an independent bank. It removes the borders and barriers of traditional banking.
  • It has no branches, no queues, and no paperwork. Immediate access is available from a mobile device.
  • Its home country is the Netherlands. It also offers services for retail businesses and small to medium enterprises in Switzerland and other EEA Countries, including France, Belgium, Germany, Austria, Italy, and Spain.
  • The Bunq app has a monthly download rate of 98,266.
  • The SEPA XML files feature on the Bunq business account is a time saver. Customers gain access at any time, from anywhere by opening the files using the Bunq app.
  • The ability to have multiple bank accounts, each with their own IBAN, makes budgeting easy. Customers can quickly and easily allocate money to the things that matter to them.
  • One of the features of a business account is real-time bookkeeping. Data is directly integrated with popular bookkeeping apps, so they are always in sync with business account transactions.

REVOLUT

  • Revolut was launched in July 2015. It is a digital banking alternative that includes a prepaid debit card, currency exchange, and peer-to-peer payments.
  • Its mission is to build a fair and frictionless platform that enables customers to use and manage money around the world.
  • It has developed a platform that allows users to transfer, exchange, and spend money with a multi-currency card that is accepted everywhere. (s9)
  • Revolut provides services to retail businesses and small to medium Enterprises in Switzerland and other EEA countries.
  • It has more than 6 million customers and has completed more than 350 million transactions.
  • It has a total value of more than £40 billion.
  • The Revolut business account provides easy access to international payments and transfers and allows you to manage your accounts across multiple countries.
  • Revolut provides prepaid cards for the business. Management can easily review employee spending and card balances.

N26

  • N26 is a German startup, launched in 2015.
  • It has never opted for financing via crowdfunding. It has experienced total investments of around $500 million. This is the highest level of investment seen in a company of this nature.
  • N26 has over 2.5 million customers. They are active in 24 European markets and plan to expand into the US.
  • They offer both premium and business accounts. Their partnership with TransferWise allows for easy and competitive international transfers.
  • The firm has raised more than $500 million from some of the world’s most well-known investors, including Insight Venture Partners, GIC, Tencent, Allianz X, Valar Ventures, Horizons Ventures, Earlybird Venture Capital, and Battery Ventures.
  • N26 services can be accessed from any European Union country. It was designed to make sending and saving money easy.
  • N26 business accounts are free to open online and have no account management fees. It is the easiest business bank account to open if you are a freelancer or self-employed.
  • Since N26 Business is an online business bank account, the 0.1% cashback on all MasterCard purchases is paid directly into the account.

MONESE

  • Monese provides instant on-demand UK current accounts and European IBAN accounts in 20 countries. (s14)
  • It has had nearly 1 million sign-ups. 75% of incoming funds are from salary payments.
  • It is one of the most popular and trusted banking services in the UK and Europe. 3,000 people sign-up to the bank daily. (s14)
  • Monese business accounts were launched in 2018. It is available for retail businesses and small to medium enterprises, in Switzerland and other EEA Countries. (s14)
  • It provides business accounts that feature instant accounts, premium business debit cards, invoice and expense reports, transaction categorization, and competitive currency transfer rates. (s15)

Research Strategy:

We extensively searched pre-compiled data from SIA Partners, Silicon Canals, Learn Bonds, and Penseron for challenger digital banks that offer banking services to businesses in the Netherlands. We leveraged this information against a compilation of industry reports, leading publications, and expert blogs. We were able to determine four of the top challenger digital banks offering banking services to businesses. We used the estimated total users, number of transactions, and the value of the digital banks to determine the top four. These are the only digital banks cited in articles and leading publications that provided business services in the Netherlands.

We were unable to determine the market penetration of these banks, despite implementing a range of strategies to find the information. We searched the press releases on each of the banks' websites, but no information was available regarding the number of business customers in the Netherlands. Some general data relating to the business market was available along with the banks' history and a mobile banking overview. Data specific to the countries they operate in was not available.

We searched a range of information from surveys and consumer reports. Our primary focus was to find pre-compiled information relating to market penetration. Most of the information related to, account opening processes, products and services offered, security measures, fees and charges, and customer support. Data relating to market penetration was not publicly available. This is possible due to its sensitive nature.

Finally, we considered a range of corporate online databases, including Crunchbase, Hoovers, and Zoominfo. Most of the data found related to funding, investors, estimated revenue, competitors, team members, and support services. No information regarding market penetration was available.


Part
02
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Part
02

Digital Services Trends: Netherlands

Our research revealed five trends in terms of digital services being offered to businesses in the Netherlands as: post-pay options, more secure products/services, payment in installment services, alternative finance platforms and revamped mobile services with stand-alone digital banking units.

Trend 1: Post-pay options

  • Customer friendly post-pay options is considered to be a trend. According to Buckaroo B.V.'s 2018 white paper, this option has had a huge boost as an accepted payment method and has become increasingly more popular in Netherlands.
  • The post-pay options are gaining popularity as a payment method as it takes over the risks associated with payments by bill, and removes the burden of the retailer as the payment is done by an invoice.
  • This payment method has also been gaining popularity since this option is now mandatory to obtain the Stichting Thuiswinkel certification.
  • Companies that are in the forefront in providing such options for B2B providers in the Netherlands are Focum & Afterpay. Focum's payment method SmartPurchase, allows businesses to buy and post-pay via a business card.
  • Through the other player AfterPay, business customers can pay with the service up to an order value of €1,000 and bills can be paid until 30 days after the billing date.

Trend 2: More secure payment methods for businesses

  • According to Daniel van Delft, Country Manager Netherlands at Visa, more secure products/services is seen as a trend as businesses are found to be increasingly looking for more secure payment methods that reduce the chance of fraud.
  • Van Delft also foresees growth in the demand for more secure products and services in the B2B market of Netherlands.
  • One such secure payment option is B2B Credit Cards where transactions are made within a controlled four-party system.
  • The companies which are in the forefront are MasterCard and Visa.
  • Visa offers three services through such secure payment options which are: cash flow management, extensive reporting (which can be categorized by merchant) and guaranteed payment.

Trend 3: Payment in Installment Services

  • Payment in Installment Services has been trending as a payment service as DIY stores, office suppliers and catering businesses are increasingly using it in Netherlands.
  • This is deemed to be an ideal digital payment option for B2Bs as it does not necessitate to run a credit report since there is an instant credit check option integrated in the payment solution.
  • In this payment option service the buyer fills out its Chamber of Commerce number (KvK-number) and pays the first installment directly via iDEAL payment app.
  • This is also gaining popularity as a payment option as it reduces fraud, because fraudsters simply refuse to pay a first installment and the checking account is verified straight away.
  • The company which is in the forefront in this trend is In3, previously known as Capayable. Through In3 the customer pays the first installment directly in the webshop, the second installment after 30 days and the third installment after 60 days.

Trend 4: Rise in Alternative Finance Platforms

  • Rise in Alternative Finance Platforms is seen as a trend according to Josy Soussan, Funding Circle’s senior Communications and PR Manager for the Netherlands. The alternative finance market in the Netherlands is growing due to banks backing out of funding the SMEs and digital platforms such as Funding Circles offering solutions with better financing experiences for entrepreneurs.
  • Through platforms like Funding Circle and Funding Options Dutch small businesses gain access to the alternative funding marketplace.
  • The leading platform accelerating this trend in the Netherlands is the alternative lending marketplace Funding Options.
  • Funding Options is considered to be a leading player as it has partnered with Dutch Bank ING through which 1.8 million SMBs in the Netherlands will gain access to Funding Options.

Trend 5: Revamped mobile services with stand-alone digital banking units under separate brands.

  • This has been considered as a trend as such services have been adopted by several banks in the Netherlands such as ABN Amro's platform MoneYou, Aegon's online bank Knab, Rabobank's Peaks savings app etc.
  • The services offered by such digital only providers include personal payment link service, budgeting tools etc.
  • The companies that are in the forefront specific to B2B are MoneYou and Knab. MoneYou offers business savings which are 100% online and is offered at zero minimum investment.
  • Knab, which is also completely online offers smart tools, relevant tips and personal service for businesses and business accounts can be opened for €5 per month.

Research Strategy:

The research team commenced the research by going through reports published by leading global consultancies on the digital financial service market focused on the Netherlands. These sources included sites such as Deloitte, PWC, McKinsey, Accenture, Euromonitor, Gartner etc.

We then looked into reports, white papers, research documents and surveys published by leading financial service platforms of the Netherlands including banks such as ABN, ING, Aegon, Rabobank and other financial platforms such as MoneYou, Knab, Bunq etc.

We also looked into sources that provide information on fintech and payment services such as Techcrunch, Techradar, Pyments.com, hollandfintech etc.

From all the sources mentioned above, we accumulated trends such as digital services offered by the financial services industry (banking, accounting, insurance) to companies in general.

Reasons for considering each trend as such include:

Study reports acknowledging the increasing popularity of the service such as can be seen for trend one.

Reputed companies such as Visa or Funding Circle acknowledging the growth of the service option such as seen for trends 2 and 4.

Multiple business sectors adopting the service option as seen for trend 3.

Multiple providers providing the services as seen for trend 5.

The forerunners for each trend has also been mentioned.
Part
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Part
03

FinTech Companies: Netherlands

Owlin, CarePay International, and GeoPhy are three FinTech companies in the Netherlands that have received Series A, B, C or D funding in 2018 or 2019. BUX and Bitfury raised undisclosed funding rounds that might or might not be Series A, B, C or D. Ikbenfrits.nl announced its last funding round in November 2017.

OWLIN

  • Owlin provides real-time data analytics services to portfolio and asset managers. The main service offered is creating customized news analysis algorithms.
  • Owlin secured $3.5 million in a Series A funding round led by Velocity Capital. The funding round was announced on 6/3/2019.

CAREPAY INTERNATIONAL

  • CarePay International is a "mobile health data & payment distribution platform" that is based in Amsterdam, but that operates in Africa. The platform connects patients, premium payers, insurers and healthcare providers in a standardized way, and it can be accessed through a mobile phone. CarePay International a viable FinTech healthcare solution for countries with underdeveloped infrastructure.
  • CarePay International raised as much as $44.9 million in a Series a funding round. The main investor was Investment Funds for Health in Africa.
  • The funding round was announced on 5/14/2019.

GEOPHY

  • GeoPhy serves the property and financial sectors by providing database and analytics tools. It offers a data warehouse and allows users to optimize their portfolio with better tracking and analytics functions.
  • GeoPhy closed its series B funding round on 1/24/2019. The company raised $33 million from Index Ventures and existing investors Inkef Capital and Hearst Ventures.

COMPANIES THAT DO NOT FIT ALL CRITERIA

BUX

  • Bux is a mobile platform for commission-free stock investing. The company offers a trading app, BUX, and will soon launch the zero-commission app STOCKS.
  • Bux raised $12.5 million in an undisclosed funding round. Velocity Capital and Holtzbrinck Ventures led the round, which was announced on 6/12/2019.

BITFURY

  • Bitfury is a Bitcoin and blockchain technology company. The company develops hardware and software solutions for the cryptocurrency industry.
  • Bitfury secured $80 million in private placement from investors like Korelya Capital, Macquarie Capital, Dentsu Inc. and individual investors.
  • The funding round was announced on 11/6/2018.

IKBENFRITS.NL

  • Ikbenfrits.nl is an online mortgage company. It provides Dutch citizens with home mortgages.
  • Ikbenfrits.nl completed a Series A funding round on 11/28/2017. It raised €2 million from Finch Capital.

RESEARCH STRATEGY

To identify the Dutch FinTech companies that meet all criteria, we first consulted Crunchbase, a credible investment information database. This provided us with three FinTech companies that are based in the Netherlands and that have received Series A, B, C or D funding on or after 1/1/2018. To find more companies we have checked other databases like Craft, but this did not yield any additional results. We have then performed a general press search to identify additional companies and we were able to find Ikbenfrits.nl, which closed its funding round in November 2017. We also found Bux and Bitfury that raised undisclosed funding rounds which might or might not be Series A, B, C or D.
We have concluded that only three companies exist that fit all criteria. However, there are some additional companies that closed Series A, B, C or D funding rounds in 2017, as well as a lot of companies that have received other types of funding in 2018 or 2019.
Part
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Part
04

Business Statistics: Netherlands

Four out of five businesses in the Netherlands are sole traders or equivalents and 19 out of 20 businesses have fewer than 10 employees. There were nearly 170,000 new businesses started in the Netherlands in 2017.

FINDINGS

  • Proportion of businesses that are sole traders or equivalents: 79.45% (2016)
  • Proportion of businesses with fewer than 10 employees: 95.54% (2016)
  • Proportion of businesses with fewer than 250 employees: 99.86% (2016)
  • Proportion of businesses with less than EUR 50 million in revenue: 99.85% (2017)
  • Number of enterprise openings in 2017: 170,000

RESEARCH STRATEGY

The information for this research was derived from the Statistics Netherlands and OECD websites. The EU classifies small enterprises as those with fewer than 250 employees and either revenue of less than EUR 50 million or assets equal to or lesser than EUR 43 million. The proportion of businesses in the Netherlands that are large enterprises is 0.15% (1,726/1,148,077); correspondingly, the proportion of SMEs in the Netherlands is 99.85% (100-0.15%).

A few SMEs could have fewer than 250 employees and over EUR 50 million in revenue, and a few large enterprises could have over 250 employees, but less than EUR 50 million in revenue. However, the net effect of such companies is not likely to be significant as the turnover of companies is usually proportional to the number of employees.

Also, we gather that the data pertaining to businesses with over EUR 50 million is essentially a standard definition of large enterprises across all EU countries in this project as each country may define large enterprises differently. The Netherlands, for example, classifies large enterprises as those with over 250 employees and either revenue of less than EUR 40 million or assets equal to or lesser than EUR 20 million.

CALCULATIONS

PROPORTION OF BUSINESSES THAT ARE SOLE TRADERS OR EQUIVALENTS

Number of enterprises with zero employees: 938,053
Total number of active enterprises: 1,180,730
Therefore, the proportion of businesses that are sole traders or equivalents: 79.45% (938,053/1,180,730)
Part
05
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Part
05

Digital Banking By Industry: Netherlands

Some industries in the Netherlands where the most digital banking services are provided for by EMIs are insurance, investment, pension, and financial industries. Below is a deep dive into our helpful findings, as well as our research strategy to explain why the requested information could not be obtained.

INDUSTRIES EMBRACING DIGITAL BANKING

  • Amongst the industries that most digital banking services are provided for (by EMIs in the Netherlands) are the insurance, investment, pension, and financial industries.
  • Some digital-only banks in the Netherlands include Bunq, Knab, N26, Transferwise, and Revolut.
  • N26 and Bunq are among the top banks (and top EMIs) in the Netherlands.

LARGEST INDUSTRIES IN THE NETHERLANDS

  • The largest industries in the Netherlands are foodstuffs, energy, trade and chemical, machinery industries, metallurgy, electrical goods and services, and tourism.
  • The agricultural industry accounts for up to 21% of the Netherlands' total exports and 1.86% of the country's GDP.
  • The energy industry is one of the largest in the country, with 25% of natural gas reserves in the EU situated in the Netherlands.
  • Netherlands is the headquarters of 19 of the key global chemical companies like DSM, Royal Dutch Shell, and AkzoNobel.
  • The metal industry is one of the largest as the country is among the top 20 largest steel exporters with over 11,300,000 metric tons of steel.
  • Manufacturing accounts for 10.9% of the GDP.

BANKING STATISTICS

  • The total asset of banks in the Netherlands is 336% of the country's GDP.
  • More than 60% of the banking assets are in loans to retail and businesses with 33% as household loans and 28% to financial enterprises.
  • Dutch banks are the main source of funds for housing.

RESEARCH STRATEGY:

To identify the industries that have embraced digital business banking services the most in the Netherlands, we first carried out a thorough search for publications, articles and press releases on the industries that have the highest uptake of digital business banking services in the Netherlands. We searched through reputable databases like PwC, Bloomberg, Deloitte, and several others. The information available was on businesses that have embraced digital platforms (not digital banking) for growth.

Secondly, we tried to compile a list of all the digital-only banks in the Netherlands and check their financial and annual reports to ascertain the industries of the majority of their clients. We also looked through their services to pick out the industries that were most mentioned from which we could point out that most of the digital-only banks offer services mostly to the insurance, investment, pension, and financial industries. We utilized reputable databases, financial and business platforms like Expatica, McKinsey, CBS, and so forth. We also tried searching in Dutch, which opened to us some other sources like Ondernemeneninternet, Geldburger, amongst others. We found some of the few digital-only banks operating in the Netherlands, but nothing on their clients' industries could be triangulated due to the scarcity of such information. Instead, there was information on their offers, awards, accomplishments, and other unrelated information. This is possibly due to the confidentiality of the information.

Thirdly, we identified the biggest industries in the country based on reliable information from sources like the CIA World Fact Book, World Atlas, Global Edge, and others. After that, we tried to find the digital banking share of each industry's banking services. We assumed that the largest industries would also have the most significant use of digital banking. This wasn't successful because it produced data on services offered by digital banks to the industries.

As an alternative strategy, we looked for the top traditional banks in digital banking services. For these banks, we scoured their public financial data, including reports and all related mentions from interviews, posts, and others. We looked for information on the industries that took up the majority of their digital banking services. We looked for their clients' lists, loan statistics, and so on. This was via reputable databases, news outlets, research platforms, and others like Advratings, Corporate Financial Institutes, the European Banking Federation, among others. Although we found some information on the percentage of general bank loans by sector, the information found with this strategy was general financial information and statistics on online banking by consumers. This is probably because most of such groupings are done based on general banking, not specifically digital.

Next, we looked for all relevant information and statistics on digital banking in the Netherlands and organized helpful findings as presented. We concluded that there is little information specific to satisfy the research criteria, probably because there are a few digital-only banks in the Netherlands.

Part
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Part
06

Google Pay Statistics: Netherlands

After exhaustive research, we could not determine any statistics that show how widely used Google Pay is in the Netherlands, including the number of Google Pay users, the number of Google Pay payments by volume and by value, and the number of merchants accepting Google Pay in the country. Available data show that Google Pay is not available in the Netherlands.

Helpful Findings

  • In France and Germany, the newcomer Bunq, a Dutch mobile bank now supports Google Pay. However, the Netherlands still doesn't have Google Pay.
  • Rabobank and ABN Amro announced its support for Garmin Pay in the Netherlands.
  • As of now, no big Dutch bank has rolled out Google Pay.
  • According to Android Authority, In 2018, Google pay was available in 28 countries.
  • According to Android Police, In 2019, Google pay has expanded its reach to Australia, Belgium, Czech Republic, Ireland, Russia, etc.
  • Some other payment options in the Netherlands are Ideal, Mobiamo, Sepa, Sofort, and Mint.

Research Strategy

We began by searching for payment system reports in the Netherlands. We looked at reports from Betaalvereniging Nederland, Instapay, JP Morgan report on payments in the Netherlands, among others. The objective of this strategy was to see if any of these sites have published information on the payment system methods with statistics for different types of methods including Google Pay. This strategy did not work as the required information was unavailable. Instead, we found information on domestic and international card payments, etc. Also, the Betaalvereniging Nederland did not cite nor mention Google Pay in the Netherlands.
Next, we checked for information on statistical databases that report the payment methods at regional and international levels. We looked for information on websites like Europa, Statista, among others. We hoped that one or all of these sites would have published business statistics. Through this search, we found information on payment methods in Netherland like Paymentwall, but these findings did not provide anything specific to Google Pay's presence in the Netherlands. We also used analytical apps to find information specific to Netherland and Google Pay's presence in the Netherland on sites like SensorTower. However, we were unable to find information on Google Pay's presence in the Netherlands. Without a direct answer or the data necessary to triangulate one, we were unable to determine the number of Google Pay users, the number of payments by volume or overall, or the number of merchants using the service in the Netherlands. We thought this strategy would work as sites like SensorTower provide app intelligence data and may have published information on user stats for Google Pay.

Our next strategy was to look for information published by Google or its parent company, Alphabet, in its annual reports, press releases, executive statements, etc. The objective of this strategy was to see if the company had released reports on the stats of the payment system in the Netherlands, as companies often publish information in the annual reports or press releases, about the performance of products and services. However, this strategy proved futile as there was no information published on such statistics for the Netherlands. At most, we found information on the overview of Google Pay app and its benefits, etc.
Next, we searched for information through financial and media publications in the Netherlands with a focus on the payment systems in the country. Our objective was to see if any news agency had published reports about the payment systems in the Netherlands with user statistics. We looked for information on sites like FinancialMirror, de Volkskrant, De Telegraaf, Het Parool, Nederlands Dagblad, etc. This strategy was also unsuccessful as the required information was not available. Instead, we found information on the other payment systems used in the country. We hoped that this strategy would work as media companies publish information about different industries along with statistics from third-party research. We also extended this strategy by checking for published articles/blogs by experts and Google relevant portals like Android police and Android Authority that generally keep its readers updated with the latest Google news. During this course, we found articles from Android Police and Android Authority that cited that Google Pay has not expanded its operations to the Netherlands in 2018 and 2019.

We also looked for expert blogs and found one such article on Medium by Rik Coeckelbergs, who is an independent advisor and opinion maker in the banking and payments space, founder of The Banking Scene. He cited in his writing that Rabobank and ABN Amro announced its support for Garmin Pay in the Netherlands in 2018 and that "no big Dutch bank rolled out Google Pay thus far." No other expert blogs were found with many relevant findings.
Part
07
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Part
07

FinTech Climate: Netherlands

Based on the existing regulatory framework, tools and resources provided by the regulators, tax incentives potentially available to fintech companies, stated intentions by the country's Minister of Finance, as well as other pertinent insights, the research team has concluded that the climate for fintech businesses in the Netherlands is vibrant and growing. The evidence of the aforementioned has been provided below.

THE NETHERLANDS FINTECH INDUSTRY OVERVIEW

  • According to a report by B-Hive, the Netherland's "strong financial services sector, access to innovative technologies, established trading roots in Europe, Asia, and other important markets, and its pool of talent" are important factors that can position the country as a leading proponent of the international fintech scene.
  • In 2018, the Netherlands was ranked 32nd out of 190 countries on the Ease of Doing Business scale, while Forbes ranked the nation third in terms of business friendliness.
  • The Netherland also has a skilled workforce, placing sixth in the World Talent Ranking of 2017.
  • Asides its strong financial services sector, the country's growing ICT ecosystem as well as its high rate of adoption of new technologies makes the country a "perfect breeding ground for fintech countries."
  • Other factors that make the Netherlands a fintech-friendly environment include its reliable and cooperative regulators, excellent digital infrastructure, strong entrepreneurial environment, and a fast-growing tech ecosystem.
  • Already, the Netherlands is "one of the countries with the fewest cash payments in the world, having already embraced a digital and efficient future, and so this rapidly evolving market is perfect for startups."
  • According to the Cambridge Centre for Alternative Finance, the Netherlands is one of the biggest markets for peer-to-peer lending.
  • According to ICLG, there are thriving fintech hubs in the Netherlands, including Amsterdam, Delft, and Eindhoven.
  • Data from Tracxn puts the number of fintech startups in the Netherlands at 628 as of July 2019.

REGULATORS — THE NETHERLANDS FINTECH INDUSTRY

  • The regulators of the fintech industry in the Netherlands include the Dutch Authority for the Financial Markets (AFM) and the De Nederlandsche Bank (DNB). According to B-Hive, these two regulators have a "strong reputation" and are also "keen to work with innovative companies."
  • According to B-Hive, the two regulators need to put in more effort to meet up with the standard set by Ireland and Great Britain.
  • The two regulators of the fintech industry have also jointly created the Innovation Hub with four specific goals, which include (written verbatim):
  • The two regulators have also launched the Regulatory Sandbox, through which helps prospective fintech companies assess whether their innovative financial products adhere "with the underlying purposes of applicable financial markets regulations rather than with the strict letter of the law."
  • The regulators have also created what is known as partial authorization, which may be issued to a financial institution that is not ready to engage in all the operations that a full authorization governs or if they do not yet meet the regulatory requirements as set forth by the law.
  • The country's Minister of Finance has also included fintech in his agenda submitted to the nation's Parliament. Amongst other things, the minister was specific on:
    • "increasing diversity in the financial sector by researching the risks and opportunities of fintech, and by introducing measures to stimulate the entrance of innovative (fintech) parties."
    • conduct research on the advantages of blockchain technology in payments and securities transaction

REGULATIONS IN THE FINTECH INDUSTRY

  • In the Netherlands, there are no restrictions on fintech businesses, even though the overall financial sector is heavily regulated.
  • In principle, fintech companies fall under the same regulation as traditional financial institutions. This is because activities performed by fintech companies "pertain to activities for which, in principle, a license from DNB or AFM is required," which is the same for traditional financial institutions.
  • Although the regulators — AFM and DNB — both have a favorable disposition towards the fintech industry, both issued warnings against cryptocurrencies and tokens in the past, due to "the absence of supervision, deposit guarantee schemes, and lack of recourse."
  • As a matter of fact, the AFM has used its powers against companies that have offered securities based on cryptocurrencies without a license.
  • That said, the regulators have equally "recognized the public interest in cryptocurrencies and ICOs and acknowledged their potential for SME financing."
  • Also, the implementation of the Revised Anti-Money Laundering Directive (AMLD) by all European Union member states will have consequences for cryptocurrencies and crypto-assets in general. The implementation of this act by the Netherlands extends the AMLD to include virtual currency service providers and mandates that these providers get a license from the DNB.

TAX INCENTIVES THAT MAY BE AVAILABLE TO FINTECH COMPANIES

  • According to ICLG, the Netherlands is an attractive hub for fintech companies from a tax perspective, whether it's a new venture or one expanding in Europe.
  • ICLG also reckons that the following tax incentives may apply to fintech companies in the Netherlands:
    • Innovation Box: "The innovation box regime provides for profits derived from certain qualifying self-developed intangibles (for example software) being taxed at an effective rate of 7% if certain conditions are met."
    • Research and Development Wage Tax Credit: Subject to certain conditions being met, companies investing in research and development and activities in the Netherlands may earn a reduction of wage tax and national insurance contributions due by employers.
  • Plans are also in the offing to reduce the maximum statutory corporate income tax to 20.5% from 25%, to further boost the country's attractiveness.

ADOPTION OF FINTECH IN THE NETHERLANDS

  • Across 29 leading markets examined around the world, the Netherlands scored 73% to rank 7th behind China and India (87%), Russia and South Africa (82%), Colombia (76%), and Peru (75%).
  • According to EY, the Netherlands high fintech adoption rate "reflects the availability of fintech services offered by banks, insurers, stockbrokers, and other traditional financial institutions."

THE INDUSTRY'S SENTIMENT

  • B-Hive reckons that there is a "positive development" of the Netherlands' fintech climate.
  • ICLG sees the fintech industry or environment in the Netherlands "becoming more mature and more professional."
  • IQ-EQ describes Amsterdam as "Europe’s Silicon Valley for FinTech."
  • Startupbootcamp’s managing director Michael Dooijes, notes that in comparison with other advanced fintech hubs such as London and Frankfurt, Amsterdam's Fintech ecosystem is "growing at a rapid pace."

AREAS FOR IMPROVEMENT


Part
08
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Part
08

Co-Working Space: Netherlands

There are 12 major co-working space providers operating in the Netherlands. Major local operators include StartDock, Igluu, ROOOMS, AtoomClub, Hashtag Workmode, and HNK. Global and regional providers with at least three locations in the Netherlands include WeWork, Mindspace, TSH Collab, Spaces, Tribes, and Regus.

MAJOR LOCAL CO-WORKING SPACE PROVIDERS IN THE NETHERLANDS

MAJOR GLOBAL/REGIONAL CO-WORKING SPACE PROVIDERS IN THE NETHERLANDS

  • WeWork operates four locations in Amsterdam only (link to website).
  • Mindspace operates four locations in Amsterdam and Utrecht (link to website).
  • TSH Collab operates five locations in Amsterdam, The Hague, Maastricht, and Rotterdam (link to website).
  • Spaces operates eight locations in Amsterdam, Rotterdam, and The Hague (link to website).
  • Tribes operates 17 locations in Amsterdam, Capelle, Eindhoven, Rotterdam, The Hague, and Utrecht (link to website).
  • Regus operates 91 locations in Amersfoort, Utrecht, Hilversum, and other cities (link to website).

RESEARCH STRATEGY

To identify the number of major co-working space providers in the Netherlands, we first examined the locations listed on co-working databases such as Coworker, CoworkBooking, and Coworking.Coffee. As these databases include thousands of co-working spaces across hundreds of countries, it is assumed that they would provide a comprehensive list of active locations/providers in the Netherlands. The website of every provider listed on these databases was examined to identify the number of co-working spaces that they operate. Among the 80+ providers examined, only StartDock, Igluu, ROOOMS, AtoomClub, Hashtag Workmode, HNK, WeWork, Mindspace, TSH Collab, Spaces, and Tribes operate at least three locations in the Netherlands.
To ensure that every popular co-working space provider in the Netherlands has been examined, we next conducted a press search for articles that talked about co-working in the Netherlands. The articles published by EU Startups, Culture Trip, and Big Seven Travel talked about the best co-working spaces in Amsterdam and Rotterdam. However, every provider mentioned in these articles has already been examined as they are also listed in the databases mentioned above.
Lastly, we examined some of the largest co-working companies in the world that were not listed in the databases and articles mentioned above. We have assumed that global players similar to WeWork may also operate in the Netherlands. Among the additional global operators examined, only Regus operates at least three locations in the Netherlands.
Part
09
of twelve
Part
09

Apple Pay Statistics: Netherlands

After an extensive research through industry sites, media platforms, and conferences, details about the number of Apple Pay users, number of payments by volume, number of payments by value, and the number of merchants accepting the solution does not appear to be available in the public domain. However, the research team was able to gather valuable insights about mobile payments in the Netherlands and Apple Pay's launch.

USEFUL FINDINGS

  • Apple Pay was launched in the Netherlands on 11 June 2019.
  • Apple Pay in the Netherlands can be used with high street and online retailers, such as Adidas, Burger King, Starbucks, H&M, Amac, McDonalds, Jumbo, among others.
  • As it stands, Apple Pay is supported by ING, a Dutch bank.
  • Apple Pay is available to 17 million people, the total population of the Netherlands.
  • The market share of mobile payments in the Netherlands is 7%. Other online payment methods in the country include credit cards, prepaid cards, bank transfer, and e-wallets.
  • Approximately 11% of internet users in the Netherlands use their mobile devices to make payments.
  • The most popular payment app in the Netherlands is iDEAL, which has 57% market share in the e-commerce market.

RESEARCH STRATEGY

Statistics regarding Apple Pay in the Netherlands could not be found. We first looked through industry sites and media platforms, such as PYMNTS, Apple Insider, and Netherland Times. However, these websites only provided brief information about Apple Pay’s launch in the Netherlands such as the bank supporting the platform, the businesses where the services will be used, and anticipated challenges as it continues to roll out in the country. No statistics were mentioned in these sources.

We then attempted to look at events and conferences, such as TRANSACT, Worldwide Developers Conference, and Mobile Payments Conference. We hoped that we could find discussions and talks by Apple Pay that mentioned any statistics regarding the service in the Netherlands. We did not find any relevant results in these events because they were either held before the launch or were yet to be held.

As a last resort, we attempted triangulation. We looked for metrics that could be used to calculate the required statistics, such as market share and percentage of Apple Pay users in the Netherlands on sites, such as Forbes, Business Insider, and PR Newswire but found no relevant results. Instead, these sources focused on topics such as Apple Pay’s growth strategy and the new Apple Card. For these reasons, we made the assumption that the information is not available in the public domain. A possible reason could be that Apple Pay in the Netherlands was launched two months ago and research about the service is yet to be conducted.

Part
10
of twelve
Part
10

Digital Banking: Netherlands

About 89% of people in the Netherlands used some form of online banking in 2018.

DIGITAL BANKING IN THE NETHERLANDS:

HOW PEOPLE ACCESS DIGITAL BANKING IN THE NETHERLANDS

  • Consumers in the Netherlands use computers, tablets or smart phones to transfer money.
  • Mobile banking saw the highest number of transactions in 2018 with 517 million transactions, while online banking stood second with 514 million transactions.
  • iDEAL is the leading online payment method in the Netherlands with 524 million transactions in 2018.
  • About 66% of the Dutch population bank on their phones and 80% of mobile banking customers use their app at least once a week.
  • Thirty-one percent of consumers in the Netherlands use only online banking.
  • On average, about 63% of consumers in the Netherlands use mobile banking and internet banking, and 3% use only mobile banking.
  • Eighty-one percent of Dutch consumers aged between 18-34 years use mobile and internet banking, 5% use only mobile banking, and 12% use only internet banking.
  • About 71% of consumers aged between 35-49 years use mobile and internet banking, while 23% use only internet banking.
  • Fifty-eight percent of consumers in the Netherlands aged between 50-64 years use mobile and internet banking, while 38% use only internet banking and 2% use only mobile banking.

Part
11
of twelve
Part
11

Registering a New Company: Netherlands

It is possible to start new businesses in The Netherlands in 3 to 4 weeks. Also, setting up a business bank account may take only 1 week, depending on the bank. The Netherlands is the 3rd largest economy in Europe, and presents great economic and plural policies.

STARTING A NEW COMPANY — OVERVIEW

  • There are mainly seven steps to set up a business in the Netherlands.
  • First, the customer has qualified for starting a business in the Netherlands.
  • The second step would be making a business plan, which could be required by the Netherlands Chamber of Commerce.
  • In third, companies in the Netherlands can be of General partnership (VOF), Limited partnership (CV), Professional partnership, Private company with limited liability (BV), or One-man business (eenmanszaak).
  • Step four is to select a business name, and this name should be clear, unique and appropriate and also mention only the services that will be provided by the company.
  • Step five is finding an appropriate location, which can be home in case of home-based companies; it's necessary, however, to check the rental contract to make sure if it allows the situation.
  • The sixth requirement is to register the company properly.
  • The seventh and last one is to make the registration with the tax authorities.

OPENING A BUSINESS BANK ACCOUNT

  • RPS Legal informs that it isn't difficult to create a business bank account for your new business.
  • The documents may vary from one bank to another.
  • However, most banks require the following: a personal identification card/passport, a Dutch Citizen Service Number (BSN), a contract for employment, and a business address at the Netherlands.
  • If the entrepreneur is from a country which is not part of the EU, the bank may also request your residence permit, or registration with the Foreign Police.
  • According to Start Business, opening a business bank account in the Netherlands may take only a week, approximately.
  • Before opening up a business bank account it's necessary to have your business registered at the Chamber of Commerce.
  • It's also possible to do the whole process remotely, but some banks can require the process to be done in presence.

OPENING A BUSINESS ACCOUNT: CHALLENGES VS. ADVANTAGES

  • ABN AMRO, Rabobank and ING are said to be the largest banks of the Netherlands.
  • Some companies choose not to open a business bank account in Netherlands because most banks conduct their business in the Dutch language.
  • This is considered a difficulty and a challenge because the bank's websites and internet banking systems are sometimes available only in Dutch.
  • Nonetheless, some advantages of opening a Dutch business bank account are Familiarity & Trust, Money Transfer Costs, and Value Added Tax.

STARTING A BUSINESS: CHALLENGES AND ADVANTAGES

  • Some challenges of doing business in the Netherlands listed by a TMF Group articles are: Dealing with Construction Permits, Getting Electricity (which may take over 100 days to complete), Registering Property, Getting Credit, Paying Taxes (since there are 9 corporate tax payments annually), among others.
  • Even with that difficulties in mind, The Start Business article informs that, altogether, it's possible to start a private limited company (BV) within a few weeks.
  • The bank account can be opened in a week.
  • Also, documents can be gathered in another week.
  • The civil notary procedures can take only a few days.
  • The notarial deed of incorporation can also be set up in a few days.
  • It's not difficult to set up a new business in the Netherlands, specially if you're a national, if you're from a state member of the EU, a Swiss citizen or from a country member of the EEA (European Economic Area).
  • There's a 2015 novelty for people not member of the EU wanting to set up a startup.
  • In this scenario, the business entrepreneurs can apply for a temporary residence permit.
  • Netherlands requires, however, an experienced mentor (facilitator) based on the country who will guide the startup.
  • The permit lasts a whole year.
  • During this period, the entrepreneur has to develop a business, a product or a service, and the period can be extended.

EUROPE AND GLOBALLY ADVANTAGES

  • Netherlands offers many advantages to set up a business because it's traditionally known as a model democracy embodying the principles of pluralism, social responsibility, tolerance and industriousness.
  • Netherlands is known worldwide as a friendly country to establish business, and also startups.
  • When compared to other Europe countries, Netherlands also has the advantage of being the third largest economy.
  • In numbers, it represents Netherlands gives access to 500 million consumers in Europe.
  • In logistics, Netherlands is positioned as the second best overall performance country worldwide.
  • Also, 90% of Dutch people speak the English language.
  • Talking about connectivity, the country provides a 100% digital community network.
Part
12
of twelve
Part
12

English Usage: Netherlands

Ninety percent of the Dutch population can speak English and the Netherlands has the highest level of English proficiency among non-native English-speaking nations. English is the primary business language in the Netherlands as it is very dependent on international trade.

GENERAL POPULATION USAGE

  • In the Netherlands, 86.4% of the population aged 25-64 knows at least one or more foreign languages.
  • The distribution by the level of command over the best known foreign language as of 2016:
  • A higher proportion of individuals aged 25-34 were proficient in the best known foreign language as compared to the general population.
  • Nine out of ten individuals in the Netherland speak English as a second language.
  • Alison Edwards, who has published extensively on the use of English in the Netherlands, asserts that English is no longer a foreign language in the Netherlands. "‘If you can assume that you can walk down the street and that the hairdresser will be able to speak to you in English, and the bus driver, and the taxi driver, then functionally it’s a second language, not a foreign language.’"
  • According to the survey findings of Education First, a global language training firm, the Dutch had the best non-native English in the world in 2016, ahead of Sweden, Denmark, Norway, and Finland.
  • Typically, countries with high levels of proficiency in English have three characteristics: English is taught as a mandatory foreign language from primary school onward, it is used for communicating in the classroom, and the citizens are well-traveled and have exposure to English through the television.
  • Over half the universities in the Netherlands teach courses in English.
  • Bilingual education s also being introduced in primary level education.

BUSINESS USAGE

  • While Dutch is the official business language, English is the primary business language. English has become a basic skill required for employment in the Netherlands as it depends highly on cross-border trade. Although French and German were traditionally valued as business languages, English has assumed far greater importance.
  • On the Dutch job websites Monsterboard.nl, nine out of ten jobs ads contained one or more English words. Jobs with English titles are considered more prestigious and international and tend to have higher salaries.
  • Large companies in the Netherlands have bilingual websites, and those with an international focus have adopted English as the primary working language. Dutch companies like Aegon, Philips, and Shell only publish their annual reports in English.
  • Many multinational companies like Uber, Nike, Adidas, Tesla, and Booking.com are setting up their branch offices in the Netherlands. This had led to an increase in the prevalence of English at the workplace. Most expats who come to the Netherlands stay for an average of only two years, which has resulted in greater adoption of the English in the workplace.
  • A 100 companies moved from the UK to the Netherlands before Brexit.
  • English is sometimes used for everyday verbal business communication in the Netherlands even in the absence of foreigners.

ADVERTISING & MEDIA USAGE

  • Sixty-four percent of ads in the Netherlands contain one or more English words. English is used in product packaging, slogans, and business names to create a trendy or international image.
  • A study found that two in three individuals in the Netherlands responded better to ads with easy English slogans as against Dutch equivalents.
  • English is "omnipresent" in the Dutch media. While most of the programs are in Dutch, majority of the English TV shows and films are broadcast in the original English version.
  • Cable and satellite providers have made English-language channels available throughout the Netherlands. BBC1, BBC2, BBC World, Discovery Channel, CNN, CNBC, and National Geographic are available on most standard cable systems.
  • Some parts of the Netherlands receive English radio broadcasts from BBC, Voice of America, and Talk Sport. However, most of the radio channels are Dutch. Similarly, the major newspapers in the Netherlands are all Dutch.
Sources
Sources

From Part 02
Quotes
  • "You want to serve your customer optimally. But what happens after the checkout of your web store? AfterPay is the most famous and trusted post payment method in the Netherlands. Consumers increasingly want to pay afterwards. This gives a feeling of freedom, peace and trust. Your customer is in control. This lowers the threshold for placing an order and ensures a positive shopping experience. "
Quotes
  • "Outstanding receivables cost you time and money. Do you want to spend this time on other priorities? Then hand over your claims to Focum. With SmartCollect from Focum you get a higher return from your collection procedure at a lower administrative burden. "
Quotes
  • "Soussan credits the growth of the alternative finance market to two factors: banks and fintech offerings. With the former, loans to SMEs account for a small part of financing and moreover, he notes, banks have been backing out of SME lending since the financial crisis. Therefore, he says, “Small businesses in the Netherlands aren’t adequately covered when it comes to financing opportunities"
  • "The growth of the alternative finance market also comes down to fintechs like Funding Circle offering simple solutions with better financing experiences for entrepreneurs."
  • "Funding Circle, which provides an online financing platform for entrepreneurs and SMEs, does its business and the alternative finance market around the globe and in the Netherlands."
Quotes
  • "Dutch bank ING is linking its small business (SMB) customers to alternative lending marketplace Funding Options, the firms said on Monday"
  • "The partnership means Funding Options has launched services in the Netherlands, expanding beyond the U.K. for the first time, said reports in Crowdfund Insider. Approximately 1.8 million SMBs in the Netherlands will gain access to Funding Options via ING Bank."
  • "We look forward to supporting Dutch small businesses to access alternative funding and achieve their goals — just as we have already supported thousands of U.K. ones"
  • "The partnership follows a $6.5 million investment from ING Bank’s investment arm ING Ventures in the marketplace lending company"
Quotes
  • "Our award-winning technology searches the market to find the right funding options for your situation. It takes minutes, there’s no obligation, and it’s easy to use."
Quotes
  • "Many of the biggest traditional financial institutions in the Benelux region have been working to revamp their mobile offerings and several of them have set up stand-alone digital units under separate brands. In the Netherlands, ABN Amro has developed online mortgages, loans and savings platform MoneYou, Aegon has built up online bank Knab, and Rabobank has launched its Peaks savings app. ING Ventures also invests heavily in all kinds of fintechs, with one example being Dutch instant payments app Payconiq."
  • "Despite incumbent banks’ strong current position, some local digital-only challengers have already set foot in the market. Dutch neobank Bunq introduced a new personal payment link service in July 2018 and teamed up with TransferWise to provide cheaper international payments in November 2018. It also offers debit cards, budgeting tools and saving features. Amsterdam-based online brokerage, BinckBank, has been active since 2000 and is currently being acquired by Danish lender Saxo Bank."
Quotes
  • "At Knab you will find exactly what you need as an entrepreneur to properly organize your financial affairs. You can fully focus on what you are good at: doing business. We look after your finances, with smart tools, relevant tips and personal service. You can already open a business account at Knab for € 5 per month."
From Part 03
From Part 05
Quotes
  • "The agro-industry of the Netherlands focuses on international exports, accounting for about 21% of the country's total value of exports."
  • "25% of all natural gas reserves in the European Union (EU) are located in the Netherlands."
  • "The Netherlands is among the world's top 20 largest steel exporters. In 2017, the Netherlands exported 11.3 million metric tons of steel, and in 2016, the country accounted for 2% of all global steel exports."
Quotes
  • "Agroindustries; Metal and Engineering Products; Electrical Machinery and Equipment; Chemicals"
Quotes
  • "the total assets of banks now amount to 336% of GDP "
  • "In total, more than 60% of the total assets is lent to retail and business customers."
  • "The Dutch banks are, however, still the main source of finance for the housing market. Around 75% of the outstanding mortgages in the Netherlands are provided by Dutch banks. "
From Part 08
From Part 10
Quotes
  • "Dutch consumers usually use computers, tablets or smart phones to transfer money. In 2016, 91% of the Dutch used online banking and 54% a mobile banking app. Banks are incorporating and investing in fintechs to provide their customers with new technological insights and agility."
Quotes
  • "Concomitantly, online payments have strongly increased. For example, the number of iDEAL payments for eCommerce purchases rose by more than 20 percent, to nearly 138 million payments."
Quotes
  • "Contrary to payments at points of sale (41.4% cash payments and 58.1% electronic payments), cash payments are still the standard for P2P transactions, with 72% being made in cash."
  • "Of these payments, 72% are made in cash and 22% by electronic means such as online and mobile banking transfer, whether or not initiated using a mobile app such as Tikkie, iDEAL, ING, Rabo, Knab, Paypal or Bunq."
  • "Of all age groups, young adults (19-24 years) are the most frequent users of electronic payment methods (43%), and in 75% of these cases they opt for paying by smartphone."
Quotes
  • "Almost 89% of Dutch people used some form of online banking in 2018, while the figure is 68.7% for Belgians and 67.7% for Luxembourgians – all well above the European average of 54.3%."
Quotes
  • "In our latest retail banking study, 80% of all respondents who use mobile banking use it at least once a week. Mobile banking owes this wide-scale adoption to the rise of e-commerce and banking apps that bring the day-to-day banking routine to smartphones, including the ability to easily make online payments"