The rapid evolution of fintechs over the past decade has disrupted traditional payment methods, paving the way for innovative solutions tailored to consumer needs.
At the heart of recent developments lies Wero, a new instant payment solution that promises to mark a turning point in the way commercial transactions are conducted, with the aim of competing with the existing giants like the GAFA in the wallet market.
But what exactly is it? What are the stakes and contributions of Wero for users?
Let’s take stock with Jérôme Traisnel, CEO of SlimPay, a Trustly Group company.
What is Wero?
Wero is the result of the European Payments Initiative (EPI), a collaboration between certain European banks and payment service providers aiming to create a unified instant payment solution with pan-European ambitions.
The EPI, launched by a consortium of 16 banks and financial services companies, aims to develop a digital wallet solution called Wero.
This initiative stems from the desire to strengthen European sovereignty in the field of digital payments, in response to the dominance of non-European tech giants.
The EPI and Wero aim to eventually cover the entire Europe, offering a full range of payment functionalities, including instant transfers, online transactions, and loyalty programs.
Wero: Founding Banks and Acquisitions
The founding banks of the EPI include big names such as Groupe BPCE, BNP Paribas, La Banque Postale, Société Générale in France, Deutsche Bank and DSGV in Germany, ING in the Netherlands, and KBC in Belgium.
These financial institutions have joined forces to invest in the development of this pan-European payment solution, with the goal of offering an alternative to card or check payments, especially in France.
To accelerate its development and enrich its offering, the EPI has acquired several existing payment systems, including the Dutch Currence iDEAL, the Luxembourgish platform Payconiq International, and the French mobile payment solution Paylib.
These acquisitions enable the EPI to benefit from technical expertise and an established user base, facilitating the transition to the new Wero solution.
Wero: Positioning?
Wero positions itself as an innovative and secure solution, offering instant payments and a range of value-added services such as digital identification (e-ID) and integration of merchant loyalty programs.
The EPI plans to launch Wero by mid-2024 in Belgium, France, and Germany, before expanding to the Netherlands and other European countries.
The ambition of this solution is to gradually adapt to all usual payment scenarios:
- starting with peer-to-peer money transfers (P2P),
- then from consumers to professionals (P2Pro),
- followed by transactions made online,
- and ending with in-store payments.
The Wero initiative of the EPI aims to represent a major advancement in the unification and modernization of digital payments in Europe.
By leveraging the combined strengths of certain European banks and integrating existing payment solutions, Wero aims to offer a competitive alternative to international payment systems (especially VISA and Mastercard networks), while supporting European financial sovereignty and innovation.
According to Jérôme Traisnel, CEO of SlimPay of the Trustly Group, « Wero is excellent news for the market as it confirms the maturity of account-to-account payments and open banking, and it will also educate the market and customers throughout its evolution. »
Where Are Instant Payments in Europe?
Wero benefits from a fairly favorable regulatory environment.
Indeed, recent developments in instant transfers in Europe, and more specifically in France, mark a significant turning point, promising to transform how consumers and businesses manage their daily transactions.
At the end of February 2024, the Council of the European Union made a major decision aimed at making instant transfers more accessible and economical across Europe.
→ This initiative aims to harmonize the fees associated with instant transfers, making them free or cheaper, depending on existing bank fees.
→ This measure requires banks to offer transfers in less than 10 seconds, available 24/7, in all eurozone countries, without fees exceeding those of traditional transfers.
→ The implementation of this regulation is scheduled for autumn 2025 for countries already using the euro. Countries that have not adopted the single currency will have additional time, until 2027 or 2028, for payments made from an account denominated in their own currency.
This development represents a significant advancement in European financial integration, facilitating cross-border transactions and strengthening the efficiency of the single market.
→ For consumers, this development means a significant reduction in costs and transaction times.
- Instant transfers will allow money to be transferred in ten seconds at any time, including outside business hours, not only within the same country but also to another EU member state.
- In France, where transfers are often free, this measure should benefit the majority of customers, making instant transfers widely accessible at no extra cost.
→ For businesses, the impact is equally positive.
- The ability to make instant transactions at low cost will improve the fluidity of receipts and payments, contributing to more efficient cash management and reducing late penalties.
- This development is also a step forward in the fight against fraud, as banks are required to verify the correspondence between the account number and the name of the beneficiary before executing the payment.
Wero: A New Payment Solution Among Others
We see the arrival of Wero as excellent news for the market, validating the maturity and viability of instant transfers. Wero will enrich the ecosystem of account-to-account payments and Open Banking.
The support of many major banks for this initiative confirms not only the functionality of these technologies but also their increasing acceptance among traditional financial players.
This clearly indicates that instant transfers are not just a possibility but are becoming a common reality in consumers’ daily transactions.
However, it should not be forgotten that Wero is a new payment solution among others, in a market that already includes many established players.
Unlike SlimPay, which has specialized in recurring payments for over a decade and has recently joined the Swedish group Trustly, Wero does not aim to develop in this segment.
Interestingly, Wero boldly positions itself to compete with mobile payment giants like Google Pay and Apple Pay.
This ambition to regain a share of the market dominated by these major operators is not only bold but also beneficial for the financial sector, stimulating innovation and offering consumers more options for their payment needs.
For us, the arrival of Wero further confirms our roadmap to meet the needs of merchants in reducing transaction abandonment,optimizing user experience, and improving the lifetime value of their customers by maximizing their financial interactions and loyalty.
