Wero are not in the business of issuing cards, though obviously they could get into that business - just like UnionPay did in China. I suspect there would be a lot of inertia there, as card payment fees are capped in Europe anyway.
Granted, the FAQ entry is rather light in details:
https://support.wero-wallet.eu/hc/en-us/articles/39413057671...
Neither are visa/MC for the most part. Mostly debit. ;) this isn’t really about the card anyway but the network behind it.
This is likely to be similar to the existing European payment systems just wider in scope. There are a bunch already it’s just fragmented and country specific. Sepa wero ideal girocard crates bancaires
I've paid numerous time using the swiss counterpart, Twint, in small shops. For some like the farm I used to buy vegetables to it was their only supported payment besides cash because they deemed the card systems too expensive.
The same way chinese tourists can already pay with alipay in many retatail outlets in europe, you can already pay with such european systems on Aliexpress. More are probably comming.
Developing countries have mostly leapfrogged to total contactless payments.
In South Aast Asia, you typically scan a QR code and approve a payment from your own phone. Far less fraud as a result. Nobody is able to touch your card, you don't have one.
Europe likely identified they better make the jump.
There are benefits to non-QR based payment systems, such as not wanting to pull out your phone, open an app, scan a QR and approve to make a payment that takes me 2 seconds with regular contactless payments.
Physical cards are also a nice fallback to have in cases of running out of battery, theft, etc.
“Breakup” seems a bit exaggerated considering the % of payment volume which might switch to the new system.
It's not seamless if it includes a war, global isolation, exodus of all business and disconnection of the banks. This means they were left with no alternative, in which case, sure, it's 'seamless' to use the only alternative method.
Europe will have a lot of friction with consumer habits and Visa will always be relevant for buying things from outside EU. These are all competing entities which hate anything that makes them seamlessly lose their business.
Of course, right now nothing can dethrone Visa/MC for international payments, besides perhaps crypto in very limited and often shady scenarios. And Europe can't really do anything about that. But that's a different problem altogether (one that annoys me to no end as a frequent purchaser of digital products from Japan).
On the other hand, if you step back a little bit, Russia is currently stuck in a Sovjet civil war, so I don’t think the Kremlin way is that great.
It's about card payment and even if things ending up in your network they first going through visa.
And it's about online payment (PayPal).
no it isn't
for bank to bank payment your statement might be true
but this isn't true for EC card payment and most online payment
_all_ EC cards either use the Visa Payment network and secure modules or the Mastercard one (but by now it's mostly Visa in most places). Sure they have your banks local branding but it's Visa anyway.
This also applies to payment terminal, most (not all) go through the Visa payment network to process payments.
And even in the same country a lot of online payment either goes through credit cards (again mostly Visa in EU) or PayPal. This isn't technically needed at all but due to fragmentation whatever alternative you want to use is just sometimes available.
Which is where Wero comes in:
- try to reduce fragmentation by making it a cooperation across many banks (of which most had their own failed PayPal alternative)
- onboard people on (local) online banking and private Phone2Phone payment (e.g. bill sharing)
- then (now) expand to pushing some payment terminal providers to support it with Phone based payment. There are multiple initiatives for it.
The later part is possible due to 3 reasons:
- payment apps on phone bypassing secure module monopoly nonsense related to EC/Credit cards and visa
- a lot of the in-person checkout systems of small businesses are now a tablet + separate cash register + EC terminal. This means that even if the EC terminal doesn't support Wero the payment system can still do so through their tablet.
- Also I think some of the wider used payment terminal in large EU specific chains can get Wero support with a software update.
Still it's by far not a perfect situation:
- still too much fragmentation/to little adoption by banks
- "old" payment terminals and (physical) checkout systems which are bound to Visa and can't easily be updated
So there most likely won't be a hard break anytime soon, and your EC card will likely continue using Visa secure module and network for a very very long time.
But having a technical working alternative which can slowly start eating market share is already a huge step forward.
No, these companies keep themselves in power not because they've solved such a difficult problem that nobody else can, but because they have a moat which they protect.
Time to do away with these foreign entities.
Regulation changes "why bother" to "oh crap".
This is the central power lever of the EU and one that is frequently underestimated.
European power projection doesn't work through tanks and aircraft carriers. It works with regulations, trade deals and economic incentives. Remember how a few years ago was scrambling to get GDPR-compliant? That wasn't some random event. That was the EU projecting power.
Why do iPhones have USB-C now? European soft power.
Why are things like Champagne and Prosciutto di Parma protected brands that can only be sold if they're from the actual region? And I mean not just in Europe itself, but everywhere it has deals? Canada, Japan, India, China, Mercosur, etc etc? European soft power.
The EU is playing a different game from the other major players. Not one of brute force, but one of shifting the foundational rules of commerce in their favor. And they're very good at it.
I don't know that the problem is sophisticated, but it's certainly complex [1]. It's a bit of both in terms of complexity and defending a moat, which all businesses do, including, and especially European ones.
And companies like Visa, Mastercard, American Express, &c. arose initially from solving a real need. Before these companies came into existence when you traveled you'd have to take cash, or traveler's checks or some other nonsense. Today you can, at least as an American, just walk in to the subway in just about any country and tap to pay. Need a coffee at Mt. Fuji? Easy. Buying a bottle of Calvados in some remote area? Yea just tap to pay with your Mastercard.
> Time to do away with these foreign entities.
You'll never do that. Why? Because at a minimum you want American tourist dollars and Europe isn't going to start issuing European credit cards to Americans or other citizens around the world.
[1] Why is it complex? Well you have to deal with American and European financial regulations, KYC, &c. - you have to vet merchants, you have to run the infrastructure to process transactions, refunds, direct payments from bank accounts to pay for cards, and all of those things. Those are real, genuine business activities that are non-negotiable and while they may seem simple, in practice they are not at all simple.
And people do underestimate the complexity of it
Had to use debit.
Is that really true? I remember wanting to buy a train ticket at Charles De Gaulle airport, and the machine only took French credit cards. That was around 2010, so I don't know if something changed.
The wonderful French train company wouldn't refund the ticket either and instead insisted that we might use it one day on another trip to France. Thankfully by the time I got to the front of the line to chat in broken French to the ticket administrator, I had already accepted my fate after hearing a number of tourists (not Americans mind you) yell and stomp their feet uselessly in hopes of obtaining a refund.
[1] That was a fun adventure too. At CDG, well I found out later that taxis are "allowed" and are the same price as the Uber ride and so we could have avoided this by just taking a taxi through Uber, but a group of folks from Great Britain were ahead of me in line and I came across them later when looking for where to get a taxi/Uber. There were rideshare signs or something but they didn't lead anywhere that made sense. They seemed rather aspirational. Well, one of the members of the British group spoke good French (or good enough) and found out the secret spot to go after chatting with an airport employee I think it's at Terminal E (someone else may know for sure) or something and so my wife and I befriended the same British group and went along with them for the long walk over.
We were able to get a ride, though not cheap. Of course the bus was an option and we're no stranger, but we were on vacation and the $50 ride was just chalked up to the cost of doing business. We were already 2 hours behind schedule because of the train fiasco.
All that to say, I think using an American credit card these days is the least of your concerns. I was surprised to see American Express taken rather much more widely than anticipated. Be careful getting gas though as they place holds on your card for $250 or something like that, and once you get enough holds you can't get any more until the prior ones "roll off".
Those are partially or completely taken over not by the card network but by the bank that is issuing you the card, so a change in the underlying technology will be transparent.
It could be handled similarly to how tourists in Brazil can now use Brazil's Pix payment system.
One way Brazil handles it is with 3rd party digital wallets that tourists can install on their phones such as Wallbit [1]. Another way is with 3rd party services that let you pay from your own digital wallet or bank app and the service makes the Pix payment [2].
[1] https://www.wallbit.io/en/blog/brazilian-pix-and-a-payment-a...
[2] https://www.pagbrasil.com/lp/pix-for-international-travelers...
Thankfully Americans at least have enough purchasing power that the demand for convenience - just take my money with this card will keep us away from bad solutions in Europe.
Only sucks for the Americans though, I think most people non American countries will be fine with that
Hard disagree. Until Covid, many small shops didn't take cards in Europe. Taxis, restaurants, market stalls, even trains were often cash only not that long ago. I in the UK ran accounts in companies that had people travel extensively in Europe. We used to issue travellers with EUR200 for the things that cards couldn't buy. Most shops didn't take Amex due to fees. Americans will either have to bring a compliant card or change some cash at the airport.
I also think you have misjudged the mood. I guarantee there are a large number of people in rural Europe that would be very happy never to meet another American tourist, even if it costs them. Americans can look forward to worse service everywhere. I wouldn't be suprised if some people in rural France refused to let you have the Calvados at all.
National banking players did not want to give up their turf. The European Union had to twist their arms to get them to agree to SEPA transfers, instant transfers, etc.
If banking players cannot agree, then regulation (or the threat of regulation) must be used.
Trump sure has moved the needle on that! We used to pay protection money to the US via this. Now we don't get the protection, so we don't need to pay.
VISA and Mastercard never resolved major technical problems. It's nothing a bank wouldn't already be able to achieve internally from a technological complexity point of view. They didn't invent any of the technologies, they just navigated the political and regulatory hurdles, then leveraged their position for more.
Your comment makes it look like the problems are "just" political or regulatory. These are more often then not the bigger ones.
Technology and some systems could be shared.
Most Dutch people were unaware of the issue (because Dutch cards worked abroad), and those who were, were fully convinced that it's because Dutch system is objectively better (it wasn't, it was just a separate network). Then in like 2024/2025 Visa and Mastercard finally retired their special V-Pay and Maestro brands, and now most terminals in the Netherlands accept most normal cards.
Just dealing with fraud is a major problem in itself.
Now most merchants have to work with two companies, visa and mastercard. Want to accept russian MIR cards? Well, in some countries you're not allowed to, and in some, you must, since visa and mastercard don't work there. Now if you add a european company to the mix... whill their cards get accepted in south africa? What about in eg turkey? China? Will whatever indian alternative is get accepted in france?
Currently, with a visa and mastercard, except for maybe russia and iran, you're pretty sure it'll get accepted at least somewhere in any urban area you visit, so you won't be hungry and have somewhere to sleep. If my bank replaces my mastercard with the EU alternative, I won't be that confident about that for quite a few years.
On the other hand, cash is still the king of everything everywhere... somehow some politicians are trying to get rid of that for some reason.
Diners club? Well.. "it depends". Many don't work with it.
Indian, russian, chinese, cards? Maybe in india, russia and china, but you shouldn't expect it to work "everywhere" like visa and mastercard. Same will be true for EU cards for quite a few years, especially if the system gets fragmented into many different companies using many different systems, and you'll always wonder if your german card will get accepted in Algeria like your friends' french card is.
Hence why crypto hasn't taken off with merchants. Because who's going to pay for merchants to change their point-of-sale systems to accept a new payment method.
- For many consumers there isn't sufficient money in the account to settle all the one-time and ongoing transactions they are liable for -- credit cards are giving you a revolving loan, there's risk it will not be repaid, and that risk ends up reflected in processing fees
- For many _businesses_ managing cash flow is existential -- as merchants they want to be paid as quickly as possible, but as B2B customers they want to have 30-60 days to sell the input goods they've purchased so they can pay for them upstream. There is a premium for that flexibility that gets reflected in processing fees.
- For both consumers and merchants, fraud risk is real and while it's the most solvable part of all this it's a real (and costly!) factor today. That risk for fraud gets moved upstream to the networks/acquirers/processors/issuers and that premium shows up in (you guessed it) processing fees.
If you want to switch the world to a debit-based system where economic transactions are limited by cash on hand, I'd argue that's a poorer and less dynamic world than the one we're operating in today.
They fought tooth and nail against cash discounts OR credit surcharges and they finally lost. In some areas it's rampant that you get a pretty substantial discount - often 4 or 5%, better than cash-back - and many places post "cash prices".
You can get even more if you're willing to ride the hassle of the gift card train.
The credit card companies know people spend more if they use credit cards, and they turn around and sell that to the merchants.
Credit card companies are allowed to run cashback for using them.
All in the name of "consumer rights": https://www.gov.uk/government/publications/payment-surcharge...
Colorado law recently changed permitting merchants to pass on the actual cost of processing, except for cash, check and debit payments.
https://colorado.public.law/statutes/crs_5-2-212
This law overrides any prior contractual agreements with banks/processing companies that prohibit surcharges. This is previously how MasterCard and VISA coerced merchants into absorbing the processing fee, by contractually requiring credit same as cash pricing.
This is a uniquely American viewpoint. In most of Europe you don't buy anything on credit ever.
I lost 3 credit cards INSIDE an airplane (hello AirAsia!). I only realized it when I turned on my phone while queuing at immigration and was bombarded with dozens of "Successful transaction" messages. That's ~30min from stepping off the airplane. When I checked my statements, I saw dozens of physical transactions (swipes/taps) with different merchants in different cities from the airport.
All 3 cards have different PINs. All require a PIN for transactions above ~USD200. Yet the banks rejected my disputes because "it's a physical transaction, so you must be the one doing it." Apparently, they all think I could fly to different cities, buy different items, and fly back to wait in immigration, all in 30 minutes.
Neither Visa nor MasterCard are loaning customers their money. It's the European banks that hold the bulk of the risk for European credit card transactions.
Chip and pin and NFC transitions took off much quicker outside the US because merchants generally owned more of the chargeback risk than in the US, and therefore were willing to update their POS equipment accordingly.
Risk (like debt) is another place where a US-centric view will likely lead you to misunderstand the purpose of Visa/MC.
This is really much less of a thing in Europe, or at the very least in Germany and Spain. Mostly it's the overdraft from banks that you can use as what you call a revolving loan. Most of the visa and mastercards I've had in my life simply debit from my main account.
I'm confused - is it not the issuing bank that gives you the loan, and the credit card company just provides the infrastructure?
Btw. having an overdraft limit of a few hundred Euros is quite typical for those liquidity issues. You don't need a credit card for that.
It’s about the cost of another employee in salary per year for restaurants.
While many other countries employ pay by QR code which is free.
Fyi just to clarify about VISA & Mastercard. Those are transaction networks not banks. VISA and Mastercard aren't the entities with mainframe computers that track money balances. It's the customers' and the merchants' banks (JP Morgan, Citi, etc) that participate in the VISA/MC network who manage the balances.
AMEX would different in that they act as both the transaction network and as a bank of customers balances.
In computer science terms, VISA and Mastercard do 2 things that makes their transaction networks useful:
- database holds the authoritative global namespace of 16-digit unique account numbers. (The # printed on everybody's plastic cards.) This avoids all participating banks from assigning any duplicate account numbers to customers.
- act as a "hub" by having a database with the many-to-many relationship between customers' multiple banks -to- merchants' multiple banks. It can then act as routing mechanism between banks. This is what allows a random restaurant to accept a credit payment without contacting the customer's particular bank directly (is it Chase? or Citi?). Instead, the restaurant's payment gateway contacts VISA/MC computers and those networks route it to the correct banks to ask for authorization.
Any new payment system that wants to displace VISA/MC need to recreate all the relationships with 1000s of banks so that the hypothetical new payment cards are "accepted everywhere" across the globe. Definitely not impossible. But not that easy either.
That's exactly the problem. Several actors have won the market of their country, but only of their country.
Will Trump be enough to make the europeans realize that they need to work together, and that an italian win is just as good as a german win?
I agree with you
However that specific example somehow feels off and déjà vu
For someone from france, sure.
For both italians and germans, it matters who wins (and i'm not making a pun here).
Point being that with a cheap alternative, it's actually much more convenient now to use a Visa or Mastercard especially with tap to pay because with competition being so high, the diversity means people allow all payments.
If in EU a local payment system captures the cash market, then the habit of using digital payments will actually also help Visa and Mastercard make more sale.
I currently don't have a credit card, but when I do, I find paying by a Visa/MasterCard much more preferable than UPI, simply because it's easier by tapping.
My experience is opposite, Now with UPI which 99% of people have access to there is no incentive for people to accept Credit Cards.
Even before UPI credit cards were common accepted online. So I am not sure about that as well.
Visa: 1.3% to 2.3% Mastercard: 1.5% to 2.6% Mastercard: 2.3% to 3.5%
Nothing precise as it depends on whether that's debit vs credit cards, and the type of card. Also volume related and what the bank may subsidize, or take on top.
A % of that also goes to the issuing bank*, not to MC/Visa, so I suspect the mentioned 0.2% is talking about what MC/Visa has as their cut.
*: That's also how banks can profitably offer things like cashback.
The low fees are for debt and high for credit cards and VISA/MC won't allow you to accebt only the debt cards
https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...
> Specifically, the regulation:
> caps interchange fees at 0.2% of the transaction value for consumer debit cards and at 0.3% for consumer credit cards;
There was a recent case of one Serbian company being sanctioned by the USA, and Visa and Master refused to process payments. No big deal, since even a small country like Serbia has its payment system called Dina that kept the company afloat.
There's not a single technical reason for bigger and richer countries to develop their own card payment system. It's not rocket science. The only reason they didn't is their regulators wanted a dependency on the USA payment processors.
Instead, we are getting a digital euro, a fully dystopian abomination.
But I'm sure there are plenty of villains and idiots that will try (and succeed) in diluting those principles and will get some dystopian (trace everything) version of that.
https://x.com/moo9000/status/2006304163404128289
The difference this time is that Digital Euro is forced by ECB and control (and deposits) are taken away from banks.
It's now been about a month since a White House deputy chief of staff for policy and homeland security advisor openly talked about/advocated for taking Greenland by force.
Yeah, that 4D chess is working.
With credit cards, they actually claw that money back from the merchant, and then if the merchant can't pay they just eat it themselves.
So the merchant has to work in fraud rates into their pricing, and the credit card company has to work in fraud rates that the merchant can't cover into their rates.
It always seemed toxic it to me that the merchants are the one's responsible, despite the fact that they easily have the least power to do anything about it. But the ease of payment processing, and the number of people who just won't buy it if they can't use a card, outweighs dealing with fraud I guess.
Is it really just PayPal left offering a sane online payment service?
---
From https://support.wero-wallet.eu/hc/en-us/articles/25599074240...:
> It is not possible to use Wero via a web browser or on a computer.
> The Wero app can be installed on any mobile device or tablet running iOS 16 or later, or Android version 9 or later. We recommend updating your device to the latest version of its operating system for maximum performance, convenience and security.
> It is not possible to use Wero via a web browser or on a computer.
Of course, what could go wrong!!
Unbelievable, a chance to make a whole new standard, new system, new everything, but yet we still have the need to tie it to ancient protocols, only to find later it’s broken by design and we start adding all sort of duct tape solutions to make it “secure”..
This is either a completely and entirely stupid move by some boomers living in the 80s, or maybe, it’s intentional to enforce something insecure like a phone number/GSM as a “national ID” to easily track citizens and force them to have a phone number linked to their real life, and I think it’s the second one, the same reason why many “secure” chatting apps still require a phone number.
Last August US threatened tariffs on Brazil over their Pix system. One of the reasons given was that people using Pix instead of credit cards deprived Visa and Mastercard of fees.
I can send money ONLY to my contacts. It doesn’t allow to type in phone number, one needs to create a contact.
I feel like Europe is just doomed. The stupidity is endless here.
We've already got a strong payment processing brand with Interac, it's used daily for millions of debit transactions, and supports all the features you'd expect (in Canada) from a payment card (tap, chip&pin). There's also the MasterCard Debit and Visa Debit branding which seem to bridge debit transactions to the MasterCard and Visa networks. And there's already Interac-capable terminals basically everywhere that Visa and MC are accepted.
My thought is that Interac should launch a credit card brand called "Interac Credit". The actual credit would be via the banks, just like it is with Visa and MC. Interac already has the relationships with merchants and banks to make this happen, and it has the mindshare with consumers to make it successful.
As long as all the other cards still get acceptance, this seems like a great system.
Card terminals here in Poland usually accept BLIK payments
It is also very popular payment method in e-commerce
The digital euro could be a good candidate here and it also aspires to have cash-like privacy features. It's also mentioned in the article as separate and hopefully non overlapping product.
It's not as much about replacing Visa/Mastercard, as it is about plastic card technology becoming obsolete, and the duopoly failing to react to the market because of corporate inertia. Had they created a modern online payment system, Wero would never take off.
NASDAQ (NYC) currently runs on software/systems built and maintained by Stockholm-based developers. NASDAQ merged with Swedish OMX in 2008, founded as Optionsmäklarna OM AB in the 80s.
Can't we have cards for this? In Spain, for example, to use Bizum, you need either an Android/iOS smartphone (and for the Android case, as you use it from your bank's app, it would typically require some Google security assurances - so no Huawei phones allowed, for example) or logging into your bank's website and use Bizum from there, only if your bank allows you to use Bizum via web. And it's not very practical or convenient to do that when you're in a store and want to pay, in contrast to swiping your credit card.
So while I see very convenient gaining some sovereignty from American companies for these payments, I think we're losing it when we will need devices controlled by other American companies in order to use the new system.
Likewise, in Germany we can have SEPA for most stuff.
And in Greece there is Viva.
Problem is getting something that actually works across all European countries.
Wero is like a monolith, while EMPSA is more like mobile phone roaming. If I would bet, I would bet on EMPSA.
https://en.wikipedia.org/wiki/European_Mobile_Payment_System...
MonkeyIsNull•1h ago
yosito•1h ago
qingcharles•1h ago
AshleyGrant•1h ago
They didn't just switch. They purchased Discover.
edit: added the "just"
LgWoodenBadger•1h ago
yardie•1h ago
Curiositiy•1h ago
aveao•1h ago
There are examples of other co-branded national payment systems out there (troy + Discover comes to mind).
If a European payment system (with cards, at a store) is to exist, then visa/mc will still want a piece of the pie by at least playing along to remain as a co-brand and taking their cuts from international payments.
danelski•42m ago
aveao•1h ago
maest•4m ago