Instant Transactions: ING unveils PayPal rival, Wero
Wero: A European Challenge to PayPal and Card Networks
In a move to consolidate and streamline European payment methods, the European Payments Initiative (EPI) launched Wero, a digital wallet, in July 2024. This innovative service aims to replace several national payment methods across the continent, including Giropay in Germany, Paylib in France, Payconiq in Belgium, and iDEAL in the Netherlands.
Currently, Wero is available in four countries: Germany, Belgium, France, and the Netherlands, with over 40 million registered users. While the exact number of active users is not publicly known, the service is gaining traction, particularly with its core feature of enabling instant, account-to-account money transfers using just phone numbers, without the need for IBANs.
The service's expansion is supported by major European banks, including Deutsche Bank and other prominent financial institutions. The collaboration aims to leverage consumers' trust in their local banks to encourage adoption. Wero also reduces merchant costs by lowering card processing fees, making it attractive, especially for high-value transactions.
One of the key supporters of Wero is the ING group, Europe's largest direct bank, with approximately 40 million customers. Although no specific announcement of ING's direct involvement in Wero has been made, the service is supported by 14 major European banks in total, and its adoption is growing through partnerships with banks and payment service providers across the EU. For instance, Revolut, a well-known fintech, is now a partner of Wero and offers the payment option to its customers in Germany, Belgium, and France.
Wero's initial phone-to-phone payment service was only available to customers of Sparkassen, Volks- and Raiffeisenbanks via their respective apps. However, as of late November, a standalone Wero app is available at Postbank.
The EPI's ambition is to build a European payment alternative to US competitors such as PayPal, Mastercard, Visa, and others. This ambition is echoed by the CEO of ING Germany, Stoy, who stated that Europe should develop its own payment systems to achieve independence and reduce dependence on other payment methods.
In the competitive payment landscape, Wero positions itself as a European alternative to PayPal and card networks, aiming for simple, low-cost payments. As Wero continues expanding, more EU banks like ING could integrate the system given its pan-European scope and bank support focus.
PayPal, with 35 million active customer accounts in Germany alone, remains a formidable competitor. However, with the support of major European banks and the growing popularity of Wero, it will be interesting to see how the European payment landscape evolves in the coming years.
The European Payments Initiative's digital wallet, Wero, aims to challenge US competitors such as PayPal by providing simple, low-cost payments, leveraging support from major European banks like ING. As Wero expands its reach and reduces merchant costs, it could potentially attract more European banks and disrupt the current payment business landscape.
The ambition of Wero is to build a European payment alternative to US competitors, with support from banks like ING, positioning it as a viable contender in the competitive technology-driven business of payment solutions, potentially impacting traditional players like PayPal.
