The launch of Wero is near

Ronald te Velde en Hans Croon
Connective Payments, June 2024

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An exciting development this Summer: four years after the announcement of the European Payments Initiative (EPI), the first EPI application will finally go live. The digital wallet, called Wero, will launch in Germany, Belgium and France.

The first Wero version will be account-to-account

Wero is a so-called A2A (account-to-account) app. That is, electronic payments go directly from the buyer’s bank account to the seller’s account. Third parties such as Apple (Apple Pay), Google (Google Pay) or the international card schemes Visa and Mastercard are not involved. We already know A2A payments from the so-called ACH (Automated Clearing House) systems. Examples of such applications with instant settlement are iDEAL, Przelewy24, giropay, Monzo, Bancontact and Sofort. These applications are very popular locally, but they are not available throughout Europe. EPI has the ambition to replace all these local systems with Wero, which uses the European instant payments infrastructure.

Which banks and PSPs participate in EPI and Wero?

The Wero system is built by 14 banks and 2 PSPs, in alphabetical order:

ABN Amro
Belfius
BNP Paribas
Crédit Agricole
Crédit Mutuel
Deutsche Bank
Raiffeisen- und Volksbanken Gruppe
Groupe BPCE
ING
KBC
Sparkassen Gruppe
La Banque Postal
Nets (deel van Nexi Group)
Rabobank
Société Générale
Worldline

Wero’s main advantage: pan-European reach

Take Dutch consumers and companies, for example. With iDEAL and the Tikkie based on it, they have a comparable payment experience as Wero. But iDEAL and Tikkie can only be used for transfers between Dutch bank accounts. The advantage of Wero is that it is a pan-European system. If both the payer and the beneficiary have a bank account with one of the 14 affiliated EPI banks, they can pay each other quickly and easily. The chance of this is quite high, because according to EPI, these banks represent a large proportion of European account holders. In France, Germany and the Benelux, for example, about 75-85%, according to EPI.

Wero’s two flavours

Wero comes in two flavours: a layer on top of existing internet banking apps and a standalone mobile Wero app (on iOS and Android). The standalone version will be rolled out first. It is a P2P and P2Pro application that is very similar to the Dutch Tikkie. If both account holders have access to Wero’s transfer protocol, the telephone number is sufficient for a successful transaction. So no searching for an account number, exact name and required codes.

Other benefits of Wero

Because Wero is based on the existing banking infrastructure, onboarding is very simple: all the necessary steps in the field of KYC are already completed. Safety is not an issue for the same reason, Wero is regulated by all financial rules that apply in the EU.

Furthermore, it will have to be proven in practice, but in theory A2A transactions such as with Wero are faster than tokenized card transactions such as with Apple Pay and Google Pay. On the other hand, Wero users do not have access to the benefits of credit cards (such as loyalty points or credit). They will initially only use Wero for reliable beneficiaries such as family and friends.

Merchants will be happy with Wero’s likely much lower interchange fees. After all, these make up the largest part of the processing costs for credit card payments. We therefore expect that merchants will do their best to encourage customers to use Wero. Especially when, at a later stage, spread payments or even Buy Now, Pay Later (BNPL) options are added to Wero.

First transaction

The first cross-border transaction with the Wero app was carried out in December 2023. A customer of Sparkasse Elbe-Elster in Germany transferred € 10,00 in a split second to a customer of Groupe BPCE (Banque Popculair and Caisse d’Epargne) in France.

“Today marks a significant achievement for EPI and for the European payments landscape as a whole. The successful execution of our first account-to-account instant payment transactions with Wero demonstrates our capacity to deliver value and innovation to consumers and merchants in Europe. We have now launched our concrete journey of delivering all kind of payment use cases and related services to the market and are moving towards our goal of changing the way Europe pays.”

Martina Weimert, CEO of EPI

Six months later, it is time to roll out this first application in Germany, Belgium and France. From 2025, the EPI product portfolio will be further expanded to include e-commerce, point-of-sale payments, BNPL and ultimately digital identity.

iDEAL and Wero

In many ways, the Dutch iDEAL can be considered a predecessor of the Wero system. For example, last April new functionalities were added to iDEAL, which will also apply to Wero in a few years. With the iDEAL in3 option it is possible to pay for your purchase in three equal installments (provided the webshop allows this): the first immediately upon purchase, the second no later than 30 days later and the third no later than 60 days later. A credit check is done in advance. Furthermore, you can create an iDEAL profile for easy checkout and, among other things, delivery addresses. These are all functions that will later also become available with Wero. Partly because of iDEAL’s lead, the system and its developer, Payconiq, were an attractive acquisition for EPI at the end of 2023.

iDEAL will continue to exist for the time being. According to CEO Daniel van Delft of Currence, the former owner of iDEAL, it will disappear from the beginning of 2026 and be absorbed into the Wero system. With a disclaimer: the timing of that transition may still change. In an interview with the AD says Van Delft:

“As soon as the Dutch ecosystem is ready to switch, Wero will come to our country. The disappearance of iDEAL is a shame, but a better system will be introduced to serve the consumer.”

Daniel van Delft, CEO of Currence

Our prediction

In November 2020, we looked into our crystal ball to predict which future scenario would prevail in the European payment landscape. This is what we wrote four years ago.
“This playing field will probably remain fragmented for a few years before clear winners and losers can be identified. Banks, card schemes and Big Tech companies will try to entice consumers and merchants to choose their services. The role of Fintech companies is interesting in this respect: they will respond to all these developments with technological solutions. Evaluating these three scenarios against criteria such as customer reach, innovative power, user centric design and brand value, we believe the Big Tech companies have the best credentials to ultimately win the game, but much will depend on the strength of EPI and the pressure that the EU and the ECB continue to exert to make a truly European alternative possible. Time will tell whether that will be enough.”

Four years later, this prediction has certainly come true. The European payment landscape is still fragmented, with domestic payment schemes next to the international (card) schemes dominating the scene. Ten years after their introduction, Apple Pay and Google Pay have further expanded their market share in mobile payments. And finally, EPI is entering the stage with its Wero offer. We could again end up with “time will tell”, but it is likely that many European citizens and companies long for one payments system that works seamlessly, where convenience, speed and security come first. With a customer experience that closely matches their familiar internet banking experience. And, as icing on the cake, with a pan-European reach. Given the market power, investments and vision that the EPI company brings, we find it very likely that Wero will make a serious attempt to become that system, as from June 2024. We are pretty sure that Wero will claim and take an important part of the payments pie in the future.

Connective Payments is here to help you

At Connective Payments, we have extensive experience helping financial institutions to grow their business and improve their payment processes. In case you are inspired by this article and curious about how you can respond to new developments such as Wero, please contact Ronald or Eppo and let’s talk!

Ronald te Velde

Connective Payments
Growth Enabler | Managing partner
+31 657 343 406
ronald.tevelde@connectivepayments.com

Eppo Heemstra

Connective Payments 
Partner, PSD2 lead & Compliance 
+31 620 352 007 eppo.heemstra@connectivepayments.com