Euro

As you should know, the currency of Nederland is the euro. Many European countries use it and it is a strong currency. In general, Dutch people are fine with it. Before the euro, we had the gulden (guilder or ƒ) for  centuries. In many respects, Nederland has lost a bit of history with the transition. Almost every Nederlander loves the design of the guilder banknotes, which were bright and colourful with graphic sans-serif fonts (see below). But, the progress embodied in the new currency is seen as a big plus as well. Overall, the hospitality business and especially bars and restaurants are seen as profiteering from the transition; as prices for drink and food have doubled in recent years. Naturally, a big part of the blame lies with increased food prices.

Cash

Nederland is not a cash-based society; for daily groceries almost everybody pays with debit card (PIN; see below). Bigger transactions are done electronically. Only in bars and cafés is cash still king. In general it is a good idea to have 40-50 euro walking-around money with you; use it to pay a street vendor, a parking meter (although using the chip on your debit/credit card is now commonplace) or a beer in a café. The smallest coins of 1 and 2 eurocents are completely worthless; these will not buy you anything. When paying cash, shops will round to the nearest five cents. The bigger coins are worth €1 and €2 and these are useful for paying drinks and food. Notes start at €5. The biggest notes are €200 and €500; these are not accepted in supermarkets and smaller shops.

Debit card society

While the US economy is based on credit in general and credit cards specifically, Nederlanders pay almost exclusively with debit card. This system is simply called ‘PIN’ and is pronounced like you would in English. The most commonly used cards all have a Maestro logo; if yours has that, it will work. PIN is freakin’ ubiquitous: even market stalls offer a pin machine. We use the old-fashioned swipe system; lately it has been causing controversy because of criminals ‘skimming’ the magnetic strip. Luckily, Dutch banks do not seem to make a fuss about reimbursement when it happens to you. There is talk of a new Europe-wide PIN system based on Visa; alledgedly things will become more expensive while service will go down. That’s progress innit?

Along with the PIN-machines in shops is the ATM machine on the street. These are always attached to a bank; stand-alone ATMs are very, very rare and even if you can find one, it will be from a bank anyway. Service charges are nominal and using ATMs is part of everyday life. Among the bigger banks with ATMs in Holland are Postbank (will become ING in 2009), Rabobank, ABN-AMRO and ING, but there are others as well. Using a machine is safe, most often they are directly on the street or inside a small vestibule inside the bank building. They have notes of 10, 20 and 50 euro.

A new system for paying small amounts (on the order of 1-2 euros) is being introduced: it’s simply called ‘chip’. (It would seem money and fancy names don’t mix very well in Nederland.) Initially this system was a flop since there were two competing standards and nobody would bother to invest. Now though the standards have merged and chipping is slowly gaining ground. It is used a lot for paying parking meters. Unfortunately, if you’re from abroad your chip will not work. The new European standard is set to change this too.

Credit cards

The big credit cards are accepted everywhere: Master Card, Visa and American Express. And with everywhere I mean mostly restaurants and non-food shops. You can generally not pay with credit card in a supermarket, nor is it useful in smallish stores. You can use it to ATM cash though. Not very many people will use a credit card to pay for everyday purchases, and even for people using them, it is quite common to pay off all debt every month. Of course, there are many people who live on credit as well. Card interest works the same as you’d expect. We have a national bureau which checks people’s credit called Bureau Kredietregistratie or simply “Tiel” after their place of business. All personal debt is registered here; mortgages and loans for instance. In theory you can be denied a loan but you’d have to be in serious debt before that happens.

Across the wire

For bigger amounts and certainly anything above 1000, electronic transactions are the norm. Only people working in restaurants and bars will receive their paycheck in cash; virtually everyone else receives it directly in their bank account (and most full-time restaurant staff as well, I’d wager). Checks are completely phased out: you cannot use them anywhere except at a bank window. And even then it’s usually a lot of trouble. Traveller’s checks can be exchanged for money at banks and exchange-offices; though if you are from a somewhat developed country I would strongly suggest you use an ATM to get your cash.

Among friends it is common to wire money if someone has footed a bill. When shopping for big stuff like kitchens or cars paying electronically is the norm as well, often paying the deposit using PIN. People under 30 all use internet to deal with banking affairs; under 40 most people do, above that age it is actually a rare thing. Banks are pushing people to use the internet since it’s cheaper for them. How Dutch!

Paying for things like magazine subscriptions, taxes and donations and utility bills is done electronically as well. You either receive and fill out an ‘acceptgiro’ card (see above) or allow the other party to deduct the amount directly from your bank account. The acceptgiro method is, again, slowly being phased out. It’s usually a few euros more expensive than the direct-transfer option. In general it is quite safe to allow businesses to deduct the money; there are laws governing these transactions and you can always call the bank to undo the transaction. They will do this (called a ‘stornering‘) without fuss, making this a widely used choice of payment.