The Netherlands declining cash usage is set to accelerate as COVID-19 will have a profound effect on consumer spending, according to GlobalData, a leading data and analytics company.

GlobalData has revised its forecasts for the Netherlands total transaction value. While the country is still expected to see growth of 0.9% compound annual growth rate (CAGR) to 2023, this is down from initial forecast of 2.2%. Total ATM withdrawals are set to decline at a CAGR of 7% in the same period, but they were already expected to fall by 5.4%, as the Netherlands moves to online and contactless payments.

Ravi Sharma, Payments Analyst at GlobalData, comments: “Online spending is likely to surge as wary customers are staying home and using online channels to purchase goods. The number of payments via iDEAL, an e-commerce payment system, increased by 31% in the last week of March 2020, compared to the same period last year. Contactless payments are expected to surge as consumers and vendors look to avoid disease vectors.”

The pandemic is expected to have a profound effect on the country’s retail and hospitality industries due to reduced consumer spending. According to GlobalData’s 2019 Banking and Payments and Survey, food and drink accounts for 29.1% of the country’s total debit card transaction value. Credit card and debit card spending will still rise overall, but this will be at the expense of cash and growth will be dampened by the overall decline in consumer spending growth.

Sharma concludes: “The growing acceptance of electronic payments at merchant stores will support the adoption and usage of mobile wallet solutions, such as Payconiq and Apple Pay. These solutions offer enhanced convenience, allowing users to make payments via their mobile phones and avoid any contact with POS terminals.”