IDEAL


iDEAL is an e-commerce payment system used in the Netherlands, based on online banking. Introduced in 2005, this payment method allows customers to buy on the Internet using direct online transfers from their bank account.
iDEAL remains by far the most popular method for online payments in the Netherlands, well beyond credit card use, and was used for 54% of all Dutch online payments in 2014. The service processed 4.5 million transfers in 2006, 15 million transfers in 2007, 28 million transfers in 2008, 45.4 million in 2009, 68.8 million in 2010, 93.8 million in 2011, 117.2 million in 2012, 142.5 million in 2013, 180.2 million in 2014, 222 million in 2015 and 282 million in 2016. iDEAL is owned by the Dutch organization Currence, which also owned PIN and Chipknip. As of April 2016, the total amount of payments exceeded one billion.
The participating banks in iDEAL are ABN AMRO, bunq, Friesland Bank, ING Bank, Knab, Rabobank, Triodos Bank, Van Lanschot and De Volksbank. Together they serve the vast majority of the Dutch online banking market.

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, 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:
iDEAL 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 webshop 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 have complained about regular down time. In 2014, the average availability of iDEAL was 99.5% for most customer banks, equivalent to 1.8 days of downtime per year.