Eurozone Members to Support Epi Payments in 2025
In six months, major banks from the European Payments Initiative (EPI) will be using a new standardized QR code payment method. A Brussels-based conglomerate, the initiative includes 16 banks and payment service providers such as KBC, ING, and BNP Paribas.
At the head of this change are the countries of Belgium, Germany, and France, which share a large portion of the digital payments in the area.
DSGV, DZ BANK, and KBC have already deployed the new payment service in Germany and Belgium. Meanwhile, France will begin launching the service at the end of August.
This system, known as Wero, allows users to make financial transactions quickly and easily. It’s useful for transferring money to another user or to another bank account. This new payment service will also come with a dedicated mobile app.
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Say hello to Wero—EPI’s new digital wallet
Wero is set to serve as the foundation of the European Commission’s and European Central Bank’s retail payments strategy. According to the initiative’s website, it will also be a “further catalyst to enhance Europe’s position as a global leader in payment innovation.”
While Wero was launched in Germany and Belgium only this year, the EPI began testing this service in the latter half of 2023.
The system’s pilot phase was launched to users in France and Germany and only allowed person-to-person (P2P) transactions. These transactions were done easily as long as the sender had the recipient’s phone number and email address.
Users could also scan a personal QR code generated by the app, which are barcodes normally created using a dynamic QR code generator online. With one quick scan, money transfers between two people could be accomplished within 10 seconds or less.
Services are still being implemented into Wero and will continue to do so until 2026. According to the EPI, Wero will eventually include payments to professionals, payments for online purchases, and payments at a point of sale (POS).
Wero is also integrated with the banking apps of EPI members, allowing users to view their bank accounts and manage payments in real time.
According to the service’s website, Wero will also add features such as a Buy Now-Pay Later function, merchant loyalty, program integration, digital identity verification, and many more.
One of the most attractive features of this digital wallet is that transfers can be done across countries without going through third parties. For the moment, this is only available in Germany, but the Netherlands and Luxembourg are set to follow suit.
Development of Wero preceded by Payconiq International's acquisition by the EPI
Before launching the first phase of Wero, the EPI announced its acquisition of Payconiq International, a Luxembourg-based payment solutions provider.
Other acquisitions included iDeal, an online payment system in the Netherlands. Four additional shareholders were also acquired by the conglomerate: Belfius and DZ Bank (which were acquired at the end of 2022), as well as ABN Amro and Rabobank.
These acquisitions were intended to further the EPI’s goal of building a unified and innovative payment solution for Europeans.
Just over a year after this announcement, the operational experience, technology, and expertise from these acquisitions have already contributed to the launch of EPI’s new digital wallet.
While more features are being added to Wero, the Payconiq app continues to offer the ability to use a QR code for payment to its users. However, users can expect Wero to take over the app’s functionalities as time goes on.
Success for QR code payments as they overcome years of challenges
This step towards a standardized payment solution in Europe is a massive success for the initiative over the many challenges facing QR code adoption in the continent.
While the rest of the world quickly adopted QR codes for payment, particularly in Asia, Europe has taken longer to fully integrate them into its systems. Copenhagen Economics claims that this is due to the fragmented landscape in Europe.
Currently, the European Union’s initiative to simplify bank transfer and payment methods is achieved through the Single Euro Payments Area (SEPA). However, several payment services that provide QR code options still operate independently from one another.
Businesses looking to use QR codes to receive payments have to generate different ones for each payment service provider they will use. This was an issue in Belgium in 2022, where, despite being mandated to offer some form of electronic payment, many businesses refused to do so.
While this flaw may have delayed the adoption of QR code payments in Europe as a standard, it began to loosen its grip in recent years. That very same mandate by the Belgian government has led to many citizens switching from cash to mobile and/or card payments.
This trend was noted to have begun in the country even before the pandemic. Before 2020, 72% of Belgians used cash payments. In 2022, this number had dropped to 59%.
The growing preference for cashless payments is something that can drive the full integration of the technology with existing systems. With the launch of Wero, the EPI is one step closer to placing Europe at the top of payment innovation.
European businesses may be late to the party, but they can still expect to enjoy the benefits of standardized QR code payments in the coming years.
