IDEAL

This article is about the e-commerce system. For other uses, see ideal (disambiguation).

iDEAL

Developer(s)	Currence (Payconiq, ABN AMRO, Friesland Bank, ING Bank, Knab, Rabobank, Triodos Bank, Van Lanschot, De Volksbank)
Initial release	2005
Website	www.ideal.nl

iDEAL is e-commerce payment system used for online banking in the Netherlands. It is an online payment method that enables consumers to pay online through their own bank. In addition to online merchants, other organisations that are not part of the e-commerce market also offer iDEAL.

iDEAL is used to pay energy bills, make donations to charities, buy mobile credits, pay local taxes, and traffic fines. The payment method allows customers to buy on the Internet using direct online transfers from their own bank account. iDeal is owned by a Dutch e-commerce organization Currence.

History

The system was first conceived by the then major banks in the Netherlands ABN Amro, ING Bank, Postbank N.V. and Rabobank to develop a single system for online payments that could be used by all banks.

The payment platform was first introduced to consumers in 2005. In 2006 the consortium moved the iDEAL brand to the Dutch banking organization Currence.

The system gained notoriety in 2014 when it claimed 54% of all Dutch online payments. In 2023 iDEAL claimed to have 70% of all Dutch online payments.

EPI Company has acquired iDEAL and Payconiq International, new shareholders and the upcoming launch of its instant payment solution. iDEAL is to become a European payment account-to-account (A2A) instant payment scheme and a multi-faceted digital wallet. EPI will initially enable person-to-person (P2P) and person-to-professional (P2Pro) payments, followed by online and mobile shopping payments and then point-of-sale payments. A comprehensive range of transaction types will be supported, including one-off payments, subscriptions, installments, payments upon delivery and reservations. Additionally, value-added services will be incorporated into the solution over time, including responsible ‘Buy Now, Pay Later’ (BNPL) financing, digital identity features and integration of merchant loyalty programmes.

Process

iDEAL offers merchants a real-time payment method to accept internet payments. For customers, iDEAL uses the same environment as their banks' online banking sites. A high level of security is realized by using two-factor authentication (2FA), such as a challenge–response access token based on the chip embedded in the debit card or ATM card. Furthermore, no sensitive information is being shared with the merchant, such as credit card numbers. There is no chargeback right, however, which can be considered a disadvantage for the consumer using this payment method. This is considered an advantage to the merchants.

iDEAL works as follows:

• Merchant offers iDEAL as payment method
• Consumer selects iDEAL and selects their bank
• Consumer is redirected to their bank's login page
• Participating bank displays transaction data
• Customer enters account number and signs the transaction digitally using a 2FA token
• Bank authorizes the transaction in real-time, deducting the amount directly from the consumer's account (if there is not enough balance, the transaction will be refused)
• Merchant received real-time confirmation of the payment by the bank
• Consumer is redirected back to the merchant page with a confirmation that the payment has been successful

Criticism

iDEAL's payment makes use of the online banking environment of participating banks and therefore makes use of the extensive safety measures of the individual banks. While the transactions themselves are widely considered to be safe, iDEAL transactions could technically be regarded as cash payments between customers and suppliers, to which the bank is no party and offers no insurance. This means that iDEAL payments cannot be reversed when, for example, a online merchant fails to deliver. If a user suspects fraud, their only option to get paid money back, is to make a case with their bank, in which the burden of proof lies with the customer and results are unsure. For purchases from untrusted suppliers, other methods of payment can have benefits.

Although banks have been joining efforts to limit technical failures of the system, users (especially sellers) have complained about regular downtime. In 2014, the average availability of iDEAL was 99.5% for most customer banks, equivalent to 1.8 days of downtime per year.

Transaction statistics

The number of transfers processed:

Annual payments

Year	Transactions
2006	4.4 million
2007	14.9 million
2008	27.8 million
2009	45.4 million
2010	68.8 million
2011	93.9 million
2012	117.2 million
2013	142.5 million
2014	180.2 million
2015	222.0 million
2016	282.6 million
2017	378.1 million
2018	523.8 million
2019	666.9 million
2020	890.3 million

See also

• Payment Service Provider
• POLi Payments