What are iDeal payments and how do they work?

‍iDEAL is an online payment method enabling direct transfers between a customer's and a merchant's banking environments. It is accepted by all major banks in the Netherlands, as well as thousands of online merchants, including fashion brands, airlines, food delivery companies, travel booking providers and streaming platforms.

iDEAL payments have grown to be the leading payment method in the Netherlands. Customers expect to see it as an option at the checkout page.

Due to its strong security, speed, and widespread acceptance, iDEAL is also frequently used for public services. For newcomers to the country, iDEAL is often the only practical way to complete important payments, such as healthcare or university fees.

Failing to offer iDEAL can lead to increased cart abandonment and lost sales, as customers may hesitate to complete purchases without their preferred payment method. In this article, we explore how iDEAL works, its main advantages for business performance and integration methods.

Which countries use iDEAL?

iDEAL was developed specifically for the Dutch market and is almost exclusively used in the Netherlands. While some e-commerce platforms (notably in Germany and Belgium) may offer iDEAL as a payment method, the use of iDEAL payments outside the Netherlands is fairly limited.

History of iDEAL payments

Launched in 2005 by the largest Dutch banks, iDEAL offers a unified payment platform for consumers in the Netherlands. Due to its speed, security and low transaction fees, iDEAL has built confidence in the Dutch market from its early days. Within the first year, iDEAL processed over 1 million transactions, and by 2024, annual transactions exceeded 1.4 billion. Today, iDEAL payments account for over 70% of all e-commerce transactions in the Netherlands.

How to use iDEAL payments

iDEAL operates as an online payment system that facilitates the immediate transfer of funds directly from the customer's bank to the merchant's account.

The process starts when a customer selects iDEAL as their payment option at the checkout page. iDEAL is also often set as the default option on many Dutch e-commerce websites. Customers must subsequently pick their bank (usually the one that issued their debit card) and fill in their bank credentials. After doing so, customers are directed to their online banking environment, where they need to authorize the transaction via two-factor authentication.

Once authorized, the payment is processed instantly, and the customer is redirected back to the merchant's website. The authorization triggers a real-time transfer of funds from the customer's bank to a collective settlement account, which is then distributed to the merchant account.

With the development of iDEAL 2.0, new features like iDEAL Snel betalen allow customers to complete payments even faster. Customers can create a personal profile to store their preferred bank account details and approve payments directly via a push notification, without the need to select their bank each time.

Advantages of iDeal for merchants and shoppers

With iDEAL, merchants benefit from the fast settlement of online transactions and guaranteed payments. The system's immediate payment confirmations and low transaction fees enhance cash flow and reduce operational costs. Since payments are authorized directly through the customer’s bank, there are no chargebacks arising from fraud-related disputes.

Thanks to its seamless and familiar checkout experience, iDEAL enjoys widespread popularity with consumers. It represents a fast and secure payment method, with no need to share sensitive information with third parties.‍

Why is iDEAL a must-have for businesses?

iDEAL processes over 1.3 billion transactions annually, accounting for approximately 70% of all e-commerce payments in the country. As Dutch customers expect to see iDEAL as a payment option, its absence can signal inconvenience or even a lack of legitimacy.

Not offering iDEAL at checkout can result in abandoned carts and low conversion rates. A study showed that 48% of customers in the Netherlands abandon their carts when their preferred payment method is not offered. Unlike many other markets, Dutch customers cannot typically use their debit (PIN) cards directly for online purchases. iDEAL is thus a necessary payment option, since it allows customers to pay directly from their bank using a familiar and secure process.

How to accept iDEAL as a payment method in the Netherlands?

There are two key steps to accepting iDEAL, including opening a merchant account and ensuring compliance with regulatory standards

Merchant account registration

Businesses must open a merchant account with a bank that enables iDEAL payment method. Most major banks in the Netherlands, including ING, Rabobank and ABN AMRO, offer iDEAL integration for merchants. Businesses should contact different banks, since the requirements for transaction volumes, security protocols and operational procedures for the integrity of the iDEAL system may vary.‍

Compliance with regulatory standards

Since iDEAL is a Netherlands-based payment method, all transactions must be secured through two-factor authentication, as required by EU law. Businesses must also adhere to the EU privacy and security frameworks (e.g., GDPR) and the Payment Card Industry Data Security Standard (PCI DSS) to handle customers' information securely.‍

iDEAL integration tips

Thanks to its compatibility with various systems, integrating iDEAL into an e-commerce platform is a straightforward process. It usually requires just a few configuration steps via APIs and software development kits (SDKs). Small businesses can also integrate by partnering with a payment service provider, such as Stripe, that enables iDEAL. This ease of integration allows merchants to offer a trusted and familiar payment method with minimal development effort.

To ensure a smooth rollout, merchants should:

✅ Test the payment flow across devices for a seamless user experience.

✅ Enable iDEAL alongside other local methods.

✅ Make sure their online platform supports instant confirmations.

iDEAL can also be integrated with a business's financial and operational systems to simplify accounting and reporting.

Consumer behavior insights

Customers in the Netherlands exhibit specific online shopping preferences, as 90% expect to see their preferred payment method at checkout.

Due to the security and trust associated with direct bank transfers, customers show a strong inclination towards bank-based payments, particularly iDEAL. Dutch shoppers utilize iDEAL for both small and large purchases, reflecting its versatility and reliability across various transaction sizes. iDEAL's real-time payment confirmation enhances consumer trust and reduces friction at the checkout page.

Since April 2024, customers in the Netherlands can also create an iDEAL profile, which enables quicker and more secure online purchases. With access to detailed transaction data from iDEAL, merchants can analyze their customers' spending behaviors for marketing campaigns and targeted rewards programs.

What is the difference between SEPA and iDEAL?

iDEAL is a real-time, bank-to-bank payment method specific to the Netherlands, while SEPA (Single Euro Payments Area) is a broader European initiative for cross-border euro transfers. iDEAL offers instant payment confirmation and is optimized for consumers in the Netherlands, while SEPA is used for broader, sometimes slower, transfers across Europe.

What is the difference between WERO and iDEAL?

In October 2023, the European Payments Initiative (EPI) acquired iDEAL as part of a broader scheme to establish a unified and instant payment system across Europe. The EPI ensured the business continuity of iDEAL payments across the Netherlands and invested in the deployment of iDEAL 2.0, which offers an upgraded shopping and payment experience.

As part of its plans to unify the European payment systems, the EPI also launched Wero, a new digital payment platform that aims to offer seamless transactions across multiple countries in the European Union (EU). Similar to IDEAL, Wero uses account-to-account technology to facilitate immediate bank-to-bank transfers.

How iDEAL can drive conversions and offer a frictionless checkout experience

iDEAL's instant bank authentication and real-time confirmation reduce friction and cart abandonment. For many, iDEAL is not just a preferred option, but the only method to complete online payments, since Dutch debit (PIN) cards can rarely be used. iDEAL Snel bestellen allows consumers to securely store their payment and shipping details during checkout, simplifying repeat purchases.

Conclusion

iDEAL payments are the backbone of e-commerce in the Netherlands, offering a secure, swift, and convenient method for consumers to make online purchases. Supported by all major Dutch banks and thousands of e-commerce platforms, iDEAL accounts for more than 1 billion online transactions in the Netherlands. Its widespread adoption across various sectors, including e-commerce, government services, and education, underscores its integral role in Dutch daily life.

For businesses, integrating iDEAL is essential to meet consumer expectations and minimize cart abandonment. It facilitates real-time transactions without the need to share sensitive information, enhancing both trust and efficiency in the payment process. The system's immediate payment confirmation and low transaction fees improve cash flow and reduce operational costs. Embracing iDEAL not only aligns with local consumer preferences but also positions businesses for success in the Dutch market.

Nuvei offers over 700 alternative payment methods (APMs), including iDEAL, to enable businesses to boost their business, locally and globally. Learn more about how APMs can boost your business.