The European Union is taking a significant step towards reshaping the payments industry with the rollout of Wero, a new platform designed to rival the dominance of Visa and Mastercard. For years, European governments and financial institutions have expressed concern over the reliance on U.S.-based companies to process a vast portion of their financial transactions. Now, with the backing of 16 major banks and payment processors, including BNP Paribas, Deutsche Bank, and Worldline, Wero aims to offer consumers a European alternative to Visa and Mastercard.
Wero enables users to make instant payments across borders using their bank accounts without the need for traditional credit or debit cards. For example, a customer in Germany could pay for a hotel in France directly from their bank account, bypassing the usual Visa or Mastercard transaction process. While this sounds simple, it has the potential to cost the U.S. payment giants billions in fees that they currently collect from European merchants every time a card is used at checkout.
This initiative reflects Europe’s growing unease with depending on foreign infrastructure, particularly in light of global political developments. When Visa and Mastercard suspended operations in Russia following the country’s invasion of Ukraine in 2022, European leaders were reminded of the risks of relying on non-European payment systems. These concerns have fueled efforts to develop homegrown solutions like Wero, which could offer consumers and businesses more control and independence over their payment processes.
Martina Weimert, CEO of the European Payments Initiative (EPI), the company behind Wero, emphasized the need for a European choice in payments. “Visa and Mastercard hold a lot of market control power,” Weimert said, explaining that Wero aims to provide a competitive alternative that is distinctly European.
Although Wero is still in its early stages, it has strong financial backing, with €500 million ($553 million) from its banking partners and a ready-made customer base. However, it faces stiff competition from Visa and Mastercard, which collectively handle trillions of dollars in transactions globally. Weimert acknowledged the challenge ahead, noting that it would be premature to call Wero a challenger to the payment giants, describing it instead as a startup with big ambitions.
The introduction of Wero comes at a time when European regulators are keen to assert sovereignty over the continent’s financial infrastructure. National payment systems, such as Swish in Sweden, Twint in Switzerland, and iDeal in the Netherlands, have gained traction in their respective countries but lack the cross-border functionality that Visa and Mastercard provide. Wero’s acquisition of iDeal and Payconiq aims to close those gaps and create a unified platform that can be used across Europe.
Despite previous failed attempts, such as the Monnet project a decade ago, Wero is positioning itself as a serious player in the European payments landscape. Its initial focus will be on account-to-account payments, which are cheaper and easier for member banks to integrate. By 2025, the platform plans to expand into e-commerce and in-store payments, offering a full range of services to European consumers and merchants.
