IDEAL

iDEAL is an Internet payment method in The Netherlands, based on online banking. Introduced in 2005, this payment method allows customers to buy securely on the Internet using direct online transfers from their bank account. iDEAL processed 4,5 million transers in 2006, 15 million transfers in 2007 and 28 million transfers in 2008. iDEAL is owned by the Dutch organization Currence, which also owns PIN and Chipknip.

The participating banks in iDEAL are: ABN AMRO, ASN Bank, Fortis, Friesland Bank, ING Bank, Rabobank, Royal Bank of Scotland and SNS Bank. Together these are serving the vast majority of the Dutch online banking market.

Process

iDEAL offers merchants a real-time payment method (publicized as low-cost and virtually risk-free) 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 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, often in addition to the regular credit card payment options
Consumer selects iDEAL and selects his bank
Consumer is redirected to his bank's login page
Participating bank displays transaction data
Customer enters account number and signs the transaction digitally using a 2FA token
Bank authorizes 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

Translation

The word "IDEAL" occurs as such in the following languages: English, Dutch.

Translation in German: IDEAL (Zahlungsverkehr).