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The Netherlands (Holland) - Currency and Cost of Living

Currency and Payment Methods

Along with many other European Union countries, the Netherlands adopted the Euro (€) as its monetary unit in 2002. If coming from another country where the Euro is in use, therefore, there is no longer a need for travellers or expats to exchange their currency on arrival in the Netherlands. Banknotes come in denominations of 5, 10, 20, 50, 100, 200 and 500 Euros, while coins are in denominations of 1 and 2 Euros and 1, 2, 5, 10, 20 and 50 cents (100 cents = 1 Euro).

Money in other currencies can be changed into Euros at banks, post offices or at the GWK exchange bureaus which can be found at the airports, major railways stations and in other tourist areas. There is no informal currency exchange market operating legally in the Netherlands, and all of the banks and exchange bureaus are required to use prevailing exchange rates, which should be publicly displayed. There is usually a charge for changing currency, although this may be discounted for students on provision of an international student card.

The most common methods of payment for goods and services in the Netherlands are cash and debit cards (the latter use a PIN number to authorise payment and you will often hear Dutch people ask if they can "pin" for something when wanting to pay). It is quite common for people in Holland to use cash, even for large purchases, either at the store or when the items are delivered to their home. Small purchases are sometimes made using a type of smartcard, called a chipknip or chippas, which has to be topped up with money from a bank account. Credit cards are not widely used in the Netherlands, except for some large purchases or for online payments.

Most people in Holland pay their bills by bank transfer using the giro system, or by direct debit from their bank. Bills usually have a giro form (acceptgirokaart) attached, which the recipient completes with their bank account number, signs and forwards to their bank, using the bank's own postage-free envelopes if these have been provided. The bill is then settled by the bank and the money deducted from the person's account. If a giro form is not included with the bill, it can be paid using a general form available at the bank. Additionally, anyone can use the giro system to pay their bills via the post office, even if they do not have an account there, by using cash and paying a small fee. It is also becoming increasingly more common for bills to be paid via the Internet as most Dutch banks now offer online banking facilities.

Utility bills, mortgage payments, rent and other regular payments can also be paid by direct debit (automatische overschrijving) from a bank account, following authorisation from the account holder. In order to set up a direct debit, you will be required to complete a bank instruction (machtigingskaart) authorising the relevant company to take money out of your account every month.

There are also various ways of making electronic payments between individuals in the Netherlands, such as the Way2pay email payment system which has been established by ING Bank. You will be required to have a bank account and an address in the Netherlands in order to use this service.

It should be noted that when writing figures, including prices, the Dutch reverse the English convention of using commas and decimal points. For example, in Holland €1.000 means a thousand Euros and €10,50 means ten euros and fifty cents.

Cost of Living

Although the cost of living in the Netherlands has reportedly increased steadily in recent years, it remains lower than in many other European countries, and the Netherlands was recently reported as being one of the two cheapest countries in Europe to buy groceries, along with Germany (ACNielson, 2006). This is largely due to the market dominance of discount supermarket chains.

Restaurant and hotel bills normally include Value Added Tax and a service charge, so it is unnecessary to tip, although it is common practice to leave a small tip for good service. In the case of waiters and taxi drivers, a tip of around 10% of the bill is customary.

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