The acquisition of the Dutch payment service iDeal by the European Payments Initiative (EPI) and its technology supplier Payconiq has recently been making waves in the European payment industry. It marks a new chapter in the history of the payment system, as for years, iDeal has been a successful payment method in the Netherlands, but its expansion into other European countries has been limited.
This buyout could potentially lay the foundation for a pan-European payment network that can compete with American payment giants like Visa and Mastercard, oﬀering an international payment system.
iDeal was established in 2004 by ABN AMRO, Rabobank and ING, with ambitions to expand through Europe. Today, iDeal is the most used payment method on the internet in the Netherlands, enabling consumers to make online payments directly from their bank accounts, without the need for credit cards or other payment methods. Onan annual basis, it handles 1.2 billion transactions, as 70% of all online purchases are settled with the system.
However, iDeal’s introduction in other European countries was not successful. ‘We always had a European ambition, but working across borders from a purely Dutch solution is diﬃcult,’ says Daniël van Delft, CEO of Currence, theconsortium of Dutch banks that manages electronic payment systems in the Netherlands. Van Delft hopes that the recent acquisition by EPI will be the takeoﬀ point for iDeal’s European breakthrough.
Currently, the payment system of the Dutch banks has generated international interest but has not yet been implemented in other European countries. However, the purchase of iDeal by EPI, an initiative with shareholders such as Credit Agricole, Deutsche Bank and BNP Paribas, could change this by developing a pan-European payment network with iDeal as a key component.
EPI is working on a digital wallet for payments, similar to Apple Pay and Google Pay, as well as systems for directpayments from account to account. The first service that EPI plans to oﬀer is a peer-to-peer payment system, similar to Tikkie, which will launch in France and Germany by the end of this year, with plans for expansion to other European countries in the future. Eventually, payments in physical shops will also be possible.
An iDeal buy-out
The parties involved in the acquisition have not disclosed the financial details yet, and regulators still need to approve the takeover. However, the three Dutch banks will remain co- shareholders as they are part of EPI.
The acquisition of iDeal is a significant step for EPI, as it expands its current wallet oﬀering, which enables bank customers to conduct transactions between diﬀerent accounts. EPI’s future plans include providing electronic identification services, deferred payment and loyalty programs.
The takeover was a complex transaction due to the involvement of several partners in the three initiatives, as noted by the parties involved. CEO Martina Weimert expects the acquisition of iDeal to attract even more partners to EPI.
Changes to come
For Dutch users of the payment system, nothing will change for the time being. However, iDeal can potentially revolutionize the payment industry for European users by oﬀering a more eﬃcient and secure payment option. ‘It is possible that the name will change in the long term, but it can also remain iDeal,’ according to a spokesperson for Currence. Only after the integration with EPI is complete will the brand change, but that process will take several years.
The acquisition by EPI is a significant step towards creating a pan-European payment network that can compete with American payment giants Visa and Mastercard. Thus, the acquisition of iDeal will definitely have an impact on the payment industry.
In conclusion, with iDeal as a key component, EPI’s future plans will provide consumers with access to a more eﬃcient and secure payment method, while merchants can expect lower transaction fees and faster paymentprocessing times. As the integration with EPI takes place over the next few years, it remains to be seen how iDealwill evolve and what impact it will have on the European payment landscape. However, at first glance, it seems like a step in the right direction.
Written by Bárbara Luque Alanis