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The European Payments Initiative (EPI), the EU’s long-desired payments champion, has announced the launch of its new instant account-to-account payment solution, Wero, in Germany.
The EPI's ambition with Wero is to develop a single, trusted wallet that consolidates all payment functionalities, meeting the diverse needs of users across Europe and ensuring a seamless, secure and instant payment experience.
Wero's initial service will focus on person-to-person (P2P) transactions, offering consumers a rapid and straightforward way to send and receive money using a phone number, app-generated QR code or email address.
Funds are transferred directly into the recipient's bank account within ten seconds, adhering to the EU’s Instant Payments Regulation compliance requirements and bypassing the need for intermediary accounts.
The service will first be available to customers of German savings and cooperative banks, with Deutsche Bank's Postbank set to join by the end of summer.
Belgian KBC customers will gain access to Wero by the end of July, then the service will roll out in France in September or October following successful summer pilots.
The EPI aims for a comprehensive rollout to all member banks within the next six months.
Both more and less than anticipated
Wero’s launch is a bold move for the EPI, which had long been written off due to the extensive costs involved and members walking out in 2022.
However, it should be noted that the Belgium market entry is more limited than it should have been.
“All four large Belgian banks were supposed to go live this summer, so the fact it's only one of them is bad news if anything,” said Kjeld Herreman, head of strategy advisory at RedCompass Labs.
The payments expert added that “it's no surprise” that KBC will be the first to gain access, as it has the best European banking app, according to SIA rankings.
"We are delighted to announce the launch of Wero, which begins with the start of the service in the German market," said Martina Weimert, CEO of the EPI. "To familiarise consumers with Wero, we’re starting with person-to-person transactions, but Wero's aim in the future is to offer all kinds of payments through a single wallet combining the simplicity, immediacy and security of the banks."
"We are excited that from now on we can progressively deliver new value through additional services to the European market," Weimert added.
The service will soon extend to Belgium and France, with plans for cross-border payments to follow, encompassing the Netherlands and Luxembourg in subsequent phases.
Plans for expansion
Looking ahead, Wero plans to expand its functionalities significantly by 2025. Future features will include the ability to pay small professionals and merchants online via QR code, manage recurring payments and facilitate seamless in-store payments without the need for a cashier.
By 2026, additional capabilities such as buy now, pay later options; merchant loyalty programme integration; and expense sharing will further enhance the user experience.
"The launch of Wero marks an important step towards enhancing Europe's financial independence," said Dr. Joachim Schmalzl, chair of EPI's board of directors. "Further steps and functionalities will follow, gradually establishing Wero as a central solution for all transactions.
"Our goal is to sustainably build this innovative solution, paving the way for a secure and efficient digital payment future in Europe," Schmalzl added.
The EPI story so far
The EPI has been a major effort for the EU's retail banking sector.
Launched in the summer of 2020, it faced significant challenges in 2022 when 20 of its 33 member banks, including all Spanish shareholders and German banks including Commerzbank, left the project.
The payments champion consequently scaled back its plans, abandoning efforts to create a card scheme to rival Visa and Mastercard and instead focusing on developing a digital wallet using instant payments.
CEO Weimert partially blamed the EU's political institutions for the project's rocky start.
"The ideal situation would be to have everything financed privately, but let’s be honest, we are in a situation where Europe needs to catch up," she said at Money 20/20 in 2022. "We are in front of financial giants. Even with big European banks and acquirers involved, it is challenging to get to the market."
She also highlighted the difficulty of navigating the political landscape.
"We have two retail payment strategies in Europe, one at the Commission and one at the European Central Bank. We’re supposed to satisfy both," Weimert said. "Where is the political support for financing? You say you want a European solution? Independence? Quick market adoption? Support it financially."
Despite this, the EU has resisted financial support, and although the European Commission and the European Central Bank have advised the EPI, the project launched Wero without financial backing.
The EPI now faces a crowded market for EU payment solutions. European providers such as Spain’s Bizum, Portugal’s SIBS and Italy’s Bancomat signed an interoperability agreement in December 2023, separate from the EPI. These providers are also members of the European Mobile Payments Association (EMPSA).
The ECB’s digital euro plans also represent a challenge.
If the digital euro is issued, it is thought that it will have a separate mobile app, meaning that the EPI will not be the main distributor as some sources had suggested would be the case.
