Wero: Europe’s New Rival to Visa, Mastercard, and PayPal

Discover Wero, the emerging payment platform in Germany and Belgium. Learn how it works and its standout features in the competitive landscape.

In a bold move that could shake up the European payment landscape, a new contender has emerged to challenge the dominance of established giants like Visa, Mastercard, PayPal, Apple, and Google Pay. Enter Wero, a digital payment service that is already making waves in Germany and is set to expand into Belgium by the end of July. But what exactly is Wero, and how does it function?

Wero: Europe's New Rival to Visa, Mastercard, and PayPal

Wero is the brainchild of the European Payments Initiative (EPI), a consortium of 16 prominent European banks and financial institutions that was established in 2021. The initiative aims to create a unified digital payment solution for businesses and consumers alike, a feat that has been long overdue in a region where digital transactions are increasingly prevalent.

Drawing inspiration from existing systems such as Payconiq and iDEAL, Wero introduces a digital wallet that simplifies money transfers to the mere act of entering a phone number—no IBAN required. This innovative approach not only streamlines transactions but also promises to extend its reach, allowing users to send money across Europe in the near future.

The impetus behind this initiative is twofold: to facilitate seamless and instantaneous digital payments within the eurozone, which encompasses 20 of the 27 EU member states, and to fulfill the bloc's enduring aspiration for strategic autonomy in financial services. As it stands, a pan-European digital payment solution remains elusive, with 13 out of 20 eurozone countries lacking a national card scheme and relying heavily on international providers. According to estimates from the European Central Bank, these providers account for a staggering 64% of electronically initiated transactions within the euro area.

However, it is crucial to note that the EPI is a private initiative, spearheaded by banking institutions, and should not be misconstrued as a substitute for public monetary systems, such as the European Central Bank's forthcoming digital euro. The digital euro is designed to serve as an alternative payment method, freely usable throughout the eurozone.

The European Consumers' Organisation (BEUC) has expressed its support for the Wero initiative, while also emphasizing that further efforts are necessary to ensure its availability to all consumers. Looking ahead, Wero plans to roll out enhanced services in 2025 and 2026, including the ability to make online payments to merchants and settle invoices via QR codes, alongside features like buy now, pay later.

Prominent banks such as BNP Paribas, ING, and Société Générale are set to integrate Wero's services into their banking applications in the latter half of this year. Following Germany and Belgium, France is expected to adopt Wero this autumn, with the Netherlands and Luxembourg slated to join the ranks in 2024.

In summary, Wero represents a significant step towards a more integrated and autonomous digital payment landscape in Europe, but as with any ambitious initiative, the journey is just beginning.