amsterdam’s leading businesses

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3 CURRENCE 4 currence month. institutions andtenbanks, witharound14milliontransactionsper It quicklycaughton, andisnow usedbymorethan45payment after 24hours, you have themoneyinyour account.’ merchant you know that independentofthebank oftheconsumer. And iDeal, thereisarealtimepayment guaranteeforthemerchant. As a banking. aswiththeirinternet anduserinterface rights And ifyou use The schemeprovides rules. For instance, have consumers thesame work together: banks, payment institutions, andmerchants.” consumers ‘We said, “The bestway toorganisepayments isaschemewhereparties iDeal.was broughtintorun payment alreadyprovided systemsand anumberofdigital Currence situation: you have tousethesystem.’ toallow competitors excluded. Butifyou openittootherbanks, you cometoadifficult ‘Banks couldbehave likeamonopolistandotherbankscouldbe argument,‘From anantitrust thisisalittlebitdelicate,’ says Mallekoote. several bankscametogethertocreate iDeal. contracts witheachbank, whichwas costlyandtime-consuming. So nature ofthesecausedproblems. Merchantshadtohave separate most Dutchbankshadtheirown payment systems, but thefragmented developedgrew intheearly2000s.It first asecommerce Backthen, in theNordiccountries: amoresocialmodel.’ system,’ says Mallekoote. ‘This ismorelikethebusiness modelyou see MasterCard and istogetprofitoutofthe purpose Visa, whoseprimary merchant aswell astheconsumer, which isadifferentbusiness modelto istogetitlow‘Our policy costforeverybody, tomakeitefficientforthe passwordnormal andyou’re done. Nofees, andnocreditcardrequired. bankingservice. The nextscreenwillbeyour usualinternet Type inyour option insteadofcreditcardpayment. payments pageofawebsite that usestheservice,justclickiDeal The way itworks issimple. As anonlineshopper, whenyou gettothe ever have comefromtheNetherlands. savestogether aspartners, moneyandcouldperhapsonly consumers for acreditcardwhenyou buy online. Ithasbroughtcompetingbanks He istalkingaboutiDeal, aremarkablesystemthat removes theneed Mallekoote, Currence. CEOofe-payment firm ‘You cooperate tobakethepie, thencompeteforyour slice,’ says Piet A MORESOCIALMODEL CEO Currence) (Piet Mallekoote, for dividingthepie’ competition isthere the pieandthen needed tobake cooperation is Netherlands that ‘We thinkinthe currence

5 currence 6 currence currence products andiDeal) of Currence’s card (Max Geerling,head part ofourculture’ the Netherlandsis “polder model”in all industries.The between banks,but And notonly of cooperation… in theNetherlands ‘There isahistory need tobeconnected tothebankingsystem donot One mainadvantage isthatterminals parks andanywhere elsethathasaterminal. tosmall changeforshops,car alternative small transactions,youloadup valueasan electronic publictransportpass.Usedfor value inasimilarwaytophone card or An electronic paymentscard thatstores Chipknip In brief,theseare… that are rare tofindinothercountries. payment systems,whichoftenoffer solutions be common.Currence nowrunsfourmain where inothercountriesathree-day waitcan super-quick interbanktransfersforconsumers, something ofaninnovator. Ithelpstofacilitate transparent, safeandfair. Butithasalsobeen Dutch paymentsystems:tomakethem Its originalremit was torunandmaintain BNG, FrieslandBankandVan Lanschot. Rabobank, INGGroep, Fortis,SNSBank, initiative ofeightDutchbanks:ABNAMRO, Currence wasfounded inJanuary2005,asan Currence, inshort and incurnofees. pay directly from bankaccount yourinternet iDeal logoinsteadofacredit card orPayPalto you gettothepaymentspage, justchoosethe banking. Asanonlineshopper,internet when Online paymentsbasedona bank transfervia iDeal The Dutchdirect debitsystem. Incasso recognised andcutsdowntransferdelays. helps ensure thatpaymentsare immediately bankingpayment.It making theirinternet Acceptgiro codethatthepayerenterswhen bill payments,invoicesare sentoutwithan through a16-digitcode.Mostlyusedfor A credit transfersystemthatlinkspayments Acceptgiro valid after1January2015. 2011, itsuseisfading,anditwillnolongerbe are. From apeakof170milliontransactionsin in thesamewaythatPIN(EFTPOS)terminals common enemy ofencroachingwater. asvillagesjoinedtogethertofightthe cooperation grew hold backthesea. goesthat theseideasof The story A polderislow-laying bydykesto landsurrounded government policy. areaoflife, every fromlabournegotiationspervades to good,It isaboutconsensusbuilding forthegreater and embedded intheDutchpsycheasdykesandwindmills. The ‘polder model’ isasystem ofcooperation as ofourculture.’Netherlands ispart industries,’ hecontinues. ‘The “polder model” inthe and cooperation. And notonlybetween banks, but all between banks, balancebetween intheright competition intheNetherlandsofcooperation ‘There isahistory iDeal itself, takestheideafurther. Max Geerling, theheadofCurrence’s cardproductsand philosophy ofmany inthe country. industries It’s asimplemetaphor, but onethat capturesthe and thencompetitionistherefordividingthepie.’ Netherlands that cooperation isneededtobakethepie tohisearlierexample:And sohereturns ‘We thinkinthe then itisuseless.’ Mallekoote. ‘If Ihave atelephonebut nooneelsedoes, innovation. ‘If you innovate, mass,’ you needcritical says Dutchmodelof Cooperating tocompeteisavery COMPETE COOPERATING TO CURRENCE

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But trade is also embedded in the national psyche, and cooperation doesn’t have to come at the expense of profit. ‘The fact is, iDeal is quite a social model,’ says Mallekoote, ‘and if we have more transactions, our receipts rise. What we then do is decrease the fee per transaction. That is immediately to the profit of the banks.’ But consumers and merchants also benefit from reduced costs The ‘polder model’ compared to credit card fees, he explains. is a system of ‘iDeal is so popular, because there is so much difference in this fee. This has to do with being low-cost, high-volume. It’s a self-fulfilling cooperation as prophecy.’ embedded in the

A FINANCIAL ECOSYSTEM Dutch psyche Currence is based in one of the gleaming towers of Zuidas, a as dykes and commercial hub at the southern tip of Amsterdam that includes the World Trade Center. windmills. It is It is the nation’s main financial district and home to a cluster of about consensus international bank headquarters. building for the It has created a financial ecosystem that sees travel between meetings reduced to a stroll across a leafy square or a short ride in an elevator. greater good, and ‘The main advantage for us here in Amsterdam is that we are close to pervades every area our direct relations, the banks,’ says Geerling. ‘It’s also an advantage of the Netherlands as a whole,’ adds of life, from labour Mallekoote. ‘It’s not difficult to have several meetings a day. It’s not a negotiations to one-day trip, like in France if you have to go from Paris to Marseille. government policy So there is a big basis of knowing each other and being connected.’ So, could the iDeal model be exported? Mallekoote and Geerling are certain of its benefits, but less sure of the willingness in other markets. ‘There is an attitude here of being responsive to your customers which seems to be quite normal but its hugely far off in other countries,’ says Mallekoote. Concurs Geerling: ‘iDeal is a no-frills payment model. There are only payments: no extra services or loyalty schemes. From a Dutch perspective, we like simple design and iDeal is such a product.’ Mallekoote has presented the idea to policy makers from the EC and Asia. ‘The Asian market in mobile payments is booming and they were amazed and saw the advantage of cooperation,’ he says. ‘But they are still far behind. A lot of payment systems are in the central banks and the first step is to migrate to the private sector and then to cooperate.’ Those looking for ideas on how to make that happen could do worse that beginning in Amsterdam.