Paypal competition - New European payment system Wero launched
The new European payment system Wero of the European Payments Initiative (EPI) has been launched. Initially, the majority of German Sparkassen and Volks- and Raiffeisen banks are participating in Wero mobile transfers from one phone to another.
Users of Wero do not need a 22-digit IBAN number of the recipient for a transfer like in a traditional transfer. Instead, one can use a mobile phone number or email address for real-time money transfer. Real-time means that the money is recorded on the recipient's or recipient's account within ten seconds. Starting in 2025, Wero can be used online, and starting in 2026 in retail.
Deutsche Bank is following later
The Belgian bank KBC is also on board for the Wero start. Further partner banks from the Netherlands and France are expected to follow. However, the EPI member Deutsche Bank, their daughter Postbank, and ING-Bank are not yet on board. Experts expect a start still this year. On the other hand, Commerzbank, DZ-Bank, and neo-banks like N26, which do not participate in the EPI and Wero, are kept out.
Wero is operated by the European Payments Initiative (EPI), a joint venture of 14 banks and two payment companies. The partners want to compete against large US financial conglomerates like Mastercard, Visa, and Paypal. In addition, the advance of Apple Pay and Google Pay is to be stopped. A role model is the mobile payment solution Twint from Switzerland, which is very popular in the Alpine Republic.
"Wero will strengthen European sovereignty in payment transactions," said Joachim Schmalzl, Managing Director in the Sparkassenverband DSGV and Chairman of the Supervisory Board of EPI. "So far, we have had no common payment procedure in Europe."
European payment procedure
Even strong national procedures like the Girocard in Germany or the Carte Bancaire in France are dependent on external European providers for cross-border transactions, Schmalzl emphasized. "Wero will end this dependency sustainably and long-term by offering a European alternative here and thus also keeping value creation in the payment transaction sector within Europe."
Customers of Sparkassen and cooperative banks do not need to install a new app on their smartphone for testing Wero, but can activate the function in their banking app. However, those who not only want to send but also receive money via Wero must also deposit a mobile phone number or email address in the banking app.
- MasterCard Incorporated, along with Visa and other large US financial conglomerates, are viewed as competitors by the partners of the European Payments Initiative (EPI).
- The Belgian bank KBC has joined the Wero initiative, with other banks from the Netherlands and France expected to follow suit.
- Despite being an EPI member, Deutsche Bank, together with its daughter Postbank and ING-Bank, are yet to join the Wero project.
- The goal of the EPI partners is to create a European alternative to mobile payment solutions like Apple Pay and Google Pay, which are gaining popularity.
- In contrast to traditional transfers requiring a 22-digit IBAN number, Wero allows users to transfer money using a mobile phone number or email address.
- The new payment system Wero is expected to increase European sovereignty in payment transactions, as it eliminates the dependency on external providers for cross-border transactions.
- Banks like Sparkassen and cooperative banks in Germany can activate the Wero function on their customers' smartphones without requiring a new app installation.
- To receive money via Wero, users must provide a mobile phone number or email address in their banking app, enabling both sending and receiving capabilities.
