Cards Dominate Half of Belgium Payments
Introduction to Belgium
An overview of Belgium's currency, population and key statistics.
Belgium's official currency is the euro (€), regulated by the European Central Bank (ECB). The euro is divided into 100 cents. Euro coins come in different amounts, including 1 cent, 2 cents, 5 cents, 10 cents, 20 cents, 50 cents, €1, and €2. Meanwhile, euro notes are available in €5, €10, €20, €50, €100, €200 and €500 denominations.
Belgium does not have a digital currency but the European Central Bank (ECB) is examining the possibility of launching a digital euro. This currency would be a digital version of cash and would be introduced as a central bank digital currency, complementing physical banknotes and coins.
According to the UN, Belgium had a population of 11,589,623 as of mid-2020. Worldometer estimated that the country's population had risen to 11,622,651 as of February 26, 2021, with 98.3% residing in urban areas, particularly Brussels. The median age of the population is 41.9 years.
Languages spoken in Belgium
The official languages of Belgium are Dutch, French, and German. The population can be divided into three main communities. About 59% belong to the Flemish community and use Dutch as their first language, while approximately 40% speak French as their first language. The remaining 1% belong to the German-speaking minority.
Belgium had a gross domestic product of €552 billion in 2022, including consumer spending, government and business expenditure, housing investments, and the balance between the country's imports and exports. According to Trading Economics, the country's household saving rate declined to 10.80% in the fourth quarter of 2022 from 13.10% in the preceding quarter.
The PPRO Report revealed that the proportion of Belgians with bank accounts reached a peak of 84.39% in 2020, with 77% of them also having access to credit cards.
Belgium internet & mobile phone trends
As of 2022, 94.44% of households in Belgium had internet access, reflecting a 2.1% increase from the previous year.
Based on data from Statista, 98% of internet users in Belgium were between 16 and 24 years old as of October 2018. Meanwhile, Datareportal reports that there were around 10.57 million internet users in January 2021, a rise of approximately 158,000 (+1.5%) from the previous year. The internet penetration rate in Belgium stood at 91.0% in January 2021.
Additionally, 77% of the population owned smartphones in 2020.
Belgium e-commerce stats
Belgium has relatively high levels of banking, internet, and smartphone usage, making it easier to establish an e-commerce market. The PPRO Report reveals that the country's average annual revenue per paying user was $1,829 in 2020.
When it comes to cross-border e-commerce, most Belgian shoppers tend to buy products from China, the Netherlands, and France.
Summary of Belgium's fiscal policy
The Belgian government provided a robust fiscal stimulus during the coronavirus pandemic to support the country's economy, but this caused an increase in the budget deficit and public debt. These deficits must be reduced after the end of the crisis.
The government has three important policy documents that outline its policies: the Federal Coalition Agreement, the Federal Government Policy Declaration, and the Federal Policy Statement.
The Coalition Agreement establishes the government's policies, while the Government Policy Statement provides the framework for the Coalition Agreement. At the beginning of the parliamentary period in October each year, the prime minister delivers a policy statement to the House of Representatives, which outlines the government's policy priorities for the fiscal year and addresses current social issues.
Belgium's fiscal policy risks include a potential failure to reduce the budget deficit and public debt after the pandemic. If the government continues to rely on fiscal stimulus without reducing the deficit and debt, it may lead to a downgrade of the country's credit rating and increase borrowing costs.
How people pay in Belgium
An overview of how people in Belgium choose to make payments.
Most popular payment methods
Online bank transfer
Buy now, pay later (BNPL)
Traditional payment methods
The primary traditional payment methods used in Belgium
Visa offers electronic payment solutions through Visa-branded credit or debit cards. Visa cards in Belgium are issued by banks like KBC and ING as well as online banks like Nickel, Revoult, and N26.
Global payment and technology company Mastercard offers its service of processing payments between retailers' banks and card-issuing banks. Some examples of Mastercard credit cards available in Belgium include the Cofidis Mastercard, Argenta Mastercard, ING Mastercard Gold, and the KBC Mastercard series.
American Express is a company that provides various financial services, such as credit cards, charge cards, and traveller's cheques. Even though Amex is not as commonly accepted as Visa or Mastercard in Belgium, it can still be used at some merchants, mainly in the travel and hospitality sectors.
Online bank transfer
According to Statista, online bank transfers are a popular payment method for e-commerce transactions in Belgium, accounting for approximately 19% of the total transactions. One of the most widely used bank transfer services is SOFORT, a European payment method with millions of users in Belgium, Austria, Germany, the Netherlands, and Switzerland.
Alternative payment methods (APMs)
The top APMs used in Belgium
Apple Pay, a mobile payment service from Apple Inc., enables users to make in-person, online, and in-app payments. It replaces chip and PIN transactions at contactless terminals.
PayPal is a frequently used digital payment system that enables clients to pay through their PayPal account funds, debit/credit cards, or bank accounts. Customers use PayPal for secure online shopping and to send/receive money.
Amazon Pay is a service provided by retail giant Amazon that enables customers to use their Amazon account details to pay for other online stores and mobile apps. Belgian customers have extensively used Amazon's French and Dutch stores even before the introduction of the Belgium-based Amazon store. This extended use has resulted in the significant adoption of Amazon Pay in Belgium.
Klarna is one of the country's top BNPL services. It provides customers with diverse payment alternatives, such as deferred or instalment payments, when they shop at retail locations or online. Klarna also collaborates with vendors to furnish shoppers with these payment options during checkout.
Bancontact is a widespread payment system in Belgium that allows customers to make secure electronic payments for products and services from their bank accounts. This method is highly favoured by many Belgian merchants and has the backing of most major banks nationwide. It is also safe because the transactions are conducted through the user's bank account.
How to accept payments in Belgium
A guide to accepting payments in Belgium.
How to accept payments online in Belgium
Before accepting online payments, you must determine which methods you prefer. Then you can choose a payment gateway provider, a service that authorises and processes online payments with their specific system.
Although there are plenty of payment gateway options in Belgium, the general process for online payments typically involves an acquirer, issuer, retailer, and cardholder in the following steps:
The cardholder initiates a payment by presenting their payment card to the retailer to purchase goods or services.
The retailer sends the payment details to the acquirer, who processes the payment request and sends it to the payment scheme (such as Mastercard or Visa).
The payment scheme sends the payment request to the issuer (such as a bank or licensed issuer) who issued the card to the cardholder.
The issuer checks if the cardholder has enough funds to complete the transaction and approves or declines the payment request. if the payment is approved, the issuer sends an authorisation code to the payment scheme.
The payment scheme sends the authorisation code to the acquirer, which then sends it to the retailer, completing the transaction.
How long does an international payment from Belgium take?
The processing time for payments may vary depending on the method and the recipient's bank. For instance, online money transfers through platforms like PayPal and Wise can be quick and convenient for sending money to multiple destinations.
Bank debit/credit cards: International payments with bank debit or credit cards may take a few minutes to a few hours, depending on bank processing times.
Online money transfers: Platforms like PayPal can process international payments within minutes to hours, depending on the service and destination country.
SWIFT/wire transfers: Traditional bank-to-bank transfers via SWIFT or wire may take one to five business days or longer, depending on the destination country, intermediary banks, and transaction requirements.
Merchant fees for online payments in Belgium can vary depending on the payment method and the merchant services provider used. Here are some examples of typical merchant fees for online payments in Belgium:
Credit and debit cards: Merchant fees for accepting credit and debit card payments online can range between 1% to 1.5% of the transaction amount. But it varies depending on the type of card used and the merchant services provider.
PayPal: For domestic payments, PayPal charges a fee ranging between 1.4% and 3.4%, along with a fixed fee of €0.35.
Bank transfers: Bank transfer fees can vary depending on the bank used, with some banks charging a flat fee per transaction and others charging a percentage of the transaction amount.
Other fees surrounding online payments in Belgium include charges incurred by merchants, payment processors, and financial institutions involved in the payment processing chain. Below are some common fees:
Interchange fees: Interchange fees are charges paid by merchants' banks to cardholders' banks to cover the costs of processing card transactions. These fees are usually based on a percentage of the transaction value and can vary depending on the type of card used and the merchant's industry.
Payment gateway fees: Payment gateway providers charge a fee for processing transactions on their platform, which may be a percentage of the transaction value or a flat fee per transaction.
Cross-border fees: If a merchant accepts payments from customers outside the country, they may be subject to additional fees for cross-border transactions, including currency conversion fees and international processing fees.
Merchant discount rate: A processing fee that merchants are charged for transactions made using credit or debit cards. This fee generally falls within the range of 1% to 3% of the total transaction amount.
Security challenges of online payments in Belgium
Security challenges of online payments in Belgium can pose a significant threat to consumers' sensitive information, and there are several types of fraud that consumers need to be aware of several types of fraud. Payment card fraud, phishing, malware, and man-in-the-middle attacks are among Belgium's most common online payment fraud types.
To combat these threats, online payment providers, banks, and financial institutions in Belgium use encryption, multi-factor authentication, and fraud detection systems. Consumers can also protect themselves by using strong passwords, keeping their devices up to date, and being aware of phishing scams.
By taking these measures, Belgian financial institutions can help protect their customers' online payment transactions and reduce the risk of fraud.
Key sectors & industries in Belgium
An overview of the Belgian market.
Belgium's top 10 industries by revenue
According to the US International Trade Administration and other various sources, the top 10 industries in Belgium are:
Energy: Belgium's energy sector combines fossil fuels, renewable energy, and nuclear power. The country has limited domestic oil and gas production and mainly imports natural gas from neighbouring countries. Renewable energy, particularly wind power, is becoming more significant. Nuclear power provides around 50% of the country's electricity, but the government plans to replace it with renewable sources by 2025.
Medical Devices: Belgium has a well-developed and diverse medical devices market focusing on high-end and innovative products. The country's strategic location, highly skilled workforce, robust regulatory framework, and strong healthcare system contribute to the industry's growth. Some of Belgium's leading medical device companies in Belgium include Materialise, icometrix, and MaSTherCell.
Cybersecurity: The cybersecurity industry in Belgium is rapidly growing and sophisticated due to government and private sector investments. Belgium focuses on innovation, with numerous startups and research institutions developing cutting-edge technologies to tackle emerging threats. The industry is particularly strong in finance, healthcare, and energy sectors.
Defence: Belgium's defence industry is small but capable, with a focus on MRO and niche components for military equipment. Large multinational companies like Agoria, Sabca, and Sonaca are major players, along with specialised SMEs. The industry is primarily supported by contracts with the Belgian Ministry of Defense but also exports products and services to customers worldwide.
Travel and Tourism: Belgium's travel and tourism industry is essential to its economy, contributing 4% of its GDP and employing over 200,000 people. The country is a popular tourist destination due to its rich history, cultural attractions, culinary scene, and beautiful cities. After the start of the pandemic, the Belgian government implemented financial assistance and health and safety protocols to support the industry and ensure a safe travel experience.
Agricultural: Belgium's agricultural industry contributes approximately 1% of the country's GDP and employs around 1.6% of the population. The industry is divided into four main sub-sectors: arable crops, horticulture, livestock, and dairy. Belgium is also known for its diversified agricultural industry, with a wide range of crops grown, including grains, sugar beets, potatoes, and vegetables.
Finance: Belgium's financial industry has seen significant growth since the 1960s and features a range of domestic and foreign financial institutions, including banks, investment firms, insurance companies, and pension funds. The NBB takes the crucial role of issuing currency, managing monetary policy, and providing financial services to the federal government. Meanwhile, the ECB, also headquartered in Brussels, sets monetary policy for the Eurozone.
Manufacturing: Belgium's manufacturing industry is a vital part of its economy, contributing about one-third of its GDP. The eastern provinces of Limburg, Flanders, and Hainaut are the primary locations for manufacturing activities. The diverse manufacturing sector includes food processing, paper manufacturing, glass, chemicals, textiles, and metallurgy. Belgium is a global leader in processing cobalt, zinc, copper, lead, and radium.
Retail: The Belgian retail industry is diverse and resilient despite the challenges posed by the pandemic. The industry is expected to expand at a compound annual growth rate of 1.6% from 2020 to 2025, reaching a total worth of €98.1 billion. The clothing and footwear sector is projected to experience the fastest growth, expanding at a compound annual growth rate of 4.4% during the same period and reaching a value of €10.0 billion.
Construction: Thanks to its high private property ownership rates, Belgium is a major player in the European construction sector. Despite a 4.8% contraction in 2020 due to the pandemic, the industry rebounded with 5.3% year-on-year growth in the first quarter of 2021. Experts predict a 4.9% growth in 2021 and an average growth rate of 2.4% between 2022 and 2025.
Belgium has a highly developed and open economy that heavily relies on international trade. The country is a known exporter of a wide range of items, including chemicals, pharmaceuticals, motor vehicles, machinery, food items, textiles, diamonds, iron, and steel. Its top export destinations include the United States and several member states of the European Union.
The country also imports a variety of goods, such as raw materials, machinery, and foodstuffs. Its leading import partners include Germany, the Netherlands, France, the United Kingdom, Ireland, and China.
The Belgian government has implemented policies to boost trade and investment flows, including reducing business administrative burdens and promoting the country as an attractive destination for foreign investment.
Regulation in Belgium
The regulatory environment of Belgium.
Summary of the regulatory environment in Belgium
To maintain fairness and operational smoothness in business ventures in Belgium, entrepreneurs are required to comply with a range of laws and regulations, which include:
Company law: This includes regulations governing companies' establishment, operations, and dissolution.
Employment law: This includes regulations governing employment contracts, working conditions, and employee rights.
Product liability law: This includes regulations governing the legal liabilities and responsibilities of manufacturers, sellers, distributors, and other parties involved in the production and sale of goods.
Intellectual property law: This includes regulations governing copyrights, patents, and trademarks.
Competition law: This includes regulations governing competition and antitrust matters to promote fair competition.
Consumer protection law: This includes regulations governing the rights of consumers, product safety, and advertising standards.
Data protection law: This includes regulations concerning the collection, use, and storage of personal data.
Belgium has several government bodies responsible for regulating different areas of law. For instance, the Belgian Federal Public Service enforces regulations related to company law and product liability law. The Ministry of Labour and Employment enforces employment law regulations. Similarly, the Belgian Intellectual Property Office administers and enforces intellectual property regulations.
How card payments are regulated in Belgium
The NBB regulates card payments in Belgium. It oversees payment systems, card schemes, and processors involved in payment operations.
The central bank also ensures compliance with relevant domestic laws, international regulations, and guidelines, such as PSD2 and the EEA agreement. It collaborates with other regulatory bodies, such as the ECB and EBA, to align card payment regulations with EU-wide standards and promote competition and innovation in the market.
Do I need a licence to do business in Belgium?
Yes. To establish a business in Belgium, it is necessary to meet several administrative requirements, which include forming a company and registering with the Crossroads Bank for Enterprises.
Payment solutions in Belgium
An overview of how to accept payments from customers in Belgium.
Payment gateways and providers in Belgium
APEXX, a leading payment technology company headquartered in London, offers a comprehensive solution for merchants in Belgium seeking to accept payments from multiple providers. Recognising the importance of accommodating diverse payment methods to meet customer preferences and enhance their overall experience, businesses may require a seamless and efficient payment processing solution.
APEXX's Payment Orchestration Layer (POL) platform is a centralised hub connecting various payment providers, including banks, acquirers, and alternative payment methods. Through APEXX POL, businesses can effortlessly manage multiple payment options via a single platform, streamlining their payment processing operations.
One of the key features of APEXX POL is its intelligent routing capability, which automatically selects the optimal payment provider for each transaction based on cost, currency, and risk assessment. This ensures businesses save on transaction fees and reduce the risk of failed payments.
Integrating APEXX POL into existing payment systems is made easy through the availability of APIs and pre-built plugins, enabling seamless integration with various e-commerce websites and point-of-sale systems.
As a trusted payment provider, APEXX is committed to delivering innovative payment solutions that meet the evolving needs of businesses in Belgium and beyond. With its comprehensive payment orchestration capabilities, APEXX empowers businesses to manage multiple payment options effectively, optimise payment processing, and enhance customer satisfaction.
Cheapest payment solutions in Belgium
To reduce fees in their payment stacks, merchants in Belgium can implement the following strategies:
Negotiate fees: Merchants should negotiate with their payment providers for better rates, which can include transaction fees, interchange fees, and monthly fees.
Choose a suitable payment provider: Merchants should research and compare different payment providers to select the one that offers competitive rates and low fees.
Use alternative payment methods: Merchants can reduce fees by using alternative payment methods such as e-wallets or bank transfers instead of traditional card payments.
Prevent chargebacks: To avoid chargebacks and additional fees, merchants can offer clear product descriptions, prompt customer complaint resolution, and refunds when necessary.
Implement fraud prevention measures: Merchants should adopt fraud prevention measures to prevent fraudulent transactions, which can lead to chargebacks and additional fees.
Monitor payment processing fees: Merchants should keep a close eye on their payment processing fees and use payment analytics tools to track their expenses and identify areas where they can reduce costs.
Merchants can also consider using payment aggregators such as APEXX, which allow them to accept multiple payment methods through a single platform, reducing the need for multiple payment providers and lowering costs.
BNPL in Belgium
The Belgian BNPL industry has experienced significant growth in recent years, driven by the increasing popularity of e-commerce and the demand for convenient payment methods. The industry is expected to keep growing with a projected compound annual growth rate of 38.3% between 2022 and 2028, resulting in a gross merchandise value exceeding $17 billion by 2028.
Klarna, Afterpay, Cofidis, and Scalapay are the major players in the Belgian BNPL market, offering various payment options to consumers.
To provide BNPL options to their customers and manage their payment systems effectively, merchants in Belgium can integrate different BNPL providers such as Klarna, Afterpay, and Cofidis using APEXX.