Germany activates its payment app Wero and threatens the existence of Bizum

There is a hidden battle going on in Europe between the countries of the south, led by Spain and Bisum, and the countries of the center and north for immediate payments. Model of success Bizumowned by financial institutions in our country, has been a reality for many years and is negotiating with its Italian and Portuguese counterparts about the interconnection and possibility of sending and receiving money between banks in these countries. This is the Spanish model of interaction with platforms existing in each Member State.

On the other hand, Germany and France, among others, are betting on a completely different model. They have created we were so it becomes the only instant payment platform existing in the eurozone, thereby aiming to absorb all the others, including Bizum. Until now, everything was calm, but the launch of the app in Central and Northern Europe changes everything.

“Customers in Germany can now make instant person-to-person money transfers from one account to another via their banking app,” EPI said. However, it will take a few more months for the main German company, Deutsche Bank, to get on board, but it will be by the end of the year.

The rollout in Germany is just the first step. Wero will be activated in Belgium at the end of July; France will follow in September/October, and the Netherlands and Luxembourg will follow “at a later stage,” EPI noted. The giants love BNP Paribas, Credit Agricole, Deutsche Bank, BPCE, ING, Société Générale…

“Wero will allow customers in Germany (and soon also in Belgium and France) to transfer and request money simply and instantly,” EPI said. A distinctive feature of Bizum is the ability to make cross-border payments, for example from a German institution to a French one.

Two models facing each other

Bizum and Wero are two identical realities in terms of the functions they cover, but radically different in terms of their model. In the case of the Spanish Bizum, which currently has 26 million users and 38 associated banks, the model it is betting on is to connect with apps from other countries, as it is already in talks with Portugal and Italy. Wero, on the other hand, wants to be the only payment app in Europe.

The ECB and its favourite

The ECB has indirectly shown that the Wero model is the most sensible one and the one it wants for the eurozone. Last year, it praised Wero’s development and suggested that they should attract more banks from other countries. A few months ago, it also criticized that the solutions that existed so far were not pan-European. And it emphasized that such a vision “impedes the deepening of the single market.”

In Wero’s favor to impose its model across Europe, it can be said that immediate and free transfers between countries will start working almost in the near future, something the European Central Bank (ECB) and the European Commission have been asking for some time. Joachim SchmalzlPresident of the EPI Board of Directors, specified that “the launch of Wero represents an important step towards improving Europe’s financial independence. (…) “Our goal is to sustainably develop this innovative solution, paving the way for a secure and efficient future of digital payments in Europe.”

EPI wanted to make its intentions clear with the initial rollout in Germany, stating that Wero’s “promise for the future is simple: to become, over time, a single trusted wallet that unifies all payment functions to meet the needs of users worldwide.” Europe. Its model has no place for multiple payment systems in each country, although as ABC moved forward, Bizum reached out to collaborate so that no one would have to disappear in the future.

ECB backs Wero

The truth is that the ECB already seems to be leaning more towards the EPI solution. Just over a year ago, the company published a statement on the development of Wero. “Eurosystem supports the creation of European payment solutions for payments at the point of contact. These solutions should have pan-European reach and customer experience, as well as a European brand and European governance,” it said at the time. It also called for more international participants to create a European initiative.

In addition, the ECB criticized in a blog post a few months ago that “most European payment solutions are focused on national markets, cover only a few use cases and lack pan-European coverage.” “This fragmentation has made cross-border transactions within the euro area dependent on a very small number of non-European market players, hindering competition, innovation and sustainability.”

The publication, signed by Piero Cipollone, a member of the ECB Executive Board, denounced that “instead of pooling efforts and sharing resources to develop pan-European solutions, national communities often prefer to preserve the legacy of investments made in the past,” adding that “the fragmentation of European payment solutions according to national criteria hinders the deepening of the single market and greater digitalization of the economy. This is an indirect criticism of national platforms such as Bizum, which seek to interact with other systems in other countries.