[dadoum]

Can anyone explain me exactly why it is a suitable alternative to VISA and Mastercard (and why people were waiting for it). I am trying to understand the full picture here, so multiple things come to my mind.

First, SEPA instant payments already exist and are really instant up to a certain amount, and I am guessing that Wero builds on top of that a sort of identity layer, to sidestep the whole IBAN thing. But it is likely more than a SEPA alias, since it was supposedly hard to set-up.

Second, VISA and Mastercard are worldwide payment networks (or rather, they each operate payment networks with various names?). But I am failing to grasp what's hard to reproduce here too. I heard that in Europe there were only a few national alternatives, like Carte Bancaire or Girocard, but why? Is it just because banks can't agree on the design of an alternate network? But all the fees associated with using VISA or Mastercard should be a big enough incentive to push something else. (basically what's a payment network?)

And lastly, why are all the new (free) digital banks (néobanques as we call them here) relying on either Mastercard or VISA and never on Carte Bancaire for example, while it generally offers lower processing fees (and that they can be cobranded).

I think I am missing a lot of context, and I asked LLMs a while ago about these but themselves don't really explain what is the infrastructure needed to operate such a network.

[holgerschurig]

Well, Visa and Mastercard are expensive and suck. The shop always has to pay them some percentage for a transaction. That adds up.

For decades, european countries like Netherlands or German had cheaper alternatives, e.g. in Germany the old "EC Card" and now "girocard". That costs a shop just a fixed amount of cent... and a very low amount.

(That is BTW one of THE reasons why US travellers won't see "Credit cards accepted" in every store ... our alternatives are just cheaper, so the market decided)

Also, Visa and Mastercard as US companies. So they are sniffing on all european transactions.

And it happened more than once that US companies tried to execute bullshit US laws in Europe. Example: there was once an german online shop that sold cuban cigars. Eventually the US website that hosted the shop said "Oh, that's not allowed" --- despite it perfectly legal by german law. And they didn't just delete this cuban cigars, they disabled the whole shop, with IIRC 20000 EUR positive balance. And the shop owner didn't even get his money, since their customer service sucked and was only automated response and untrained indian call center clerks.

So no, we cannot really depend on US services. They are expensive, they customer service sucks, they are sniffing either directly or let the NSA sniff everything.

And, bank-wise the USA seems to be some decades back (not online-bank-wise!). I mean, they still have pay cheques? Not direct bank transfers? Shudder. No wonder that, if they have no alternatives, they think everything must be Visa or Mastercard operated.

[pepa65]

I am sure they have no direct transfer because of the credit card lobby... Just trying to keep screwing their customers as usual.

[Freak_NL]

It's really simple.

You're in the Netherlands, and you are going to buy something in an on-line store. Steam perhaps, or any Dutch retailer.

You put the game in your Steam cart, and go to pay. You select Ideal (which Steam provides as an option), you pick your bank, and you follow the on-screen instructions (but you probably do that pretty much automatically). Usually that means scanning a QR code with your bank app on your smartphone where you confirm the amount and recipient, but you can use a physical card reader with your debit card for an OTP to use as well and do it in your bank's online environment in the browser.

That process is what the whole of Europe wants (Wero builds on the Dutch Ideal). It is stupid simple, and once you've used it you don't want to deal with credit cards and bank transfers for buying a thing on-line any more.

That's all there is to it. There is a whole country which already does this, and it works so well everyone wants it. No major US companies needed (big plus these days), and no parasites like Klarna either. Just an easy way to pay a shop using your bank account, just like you use a debit card in physical stores do the same.

[microtonal]

That process is what the whole of Europe wants (Wero builds on the Dutch Ideal). It is stupid simple, and once you've used it you don't want to deal with credit cards and bank transfers for buying a thing on-line any more.

Can confirm. I almost never pay by card because iDEAL is simply much smoother and even many Shopify/Stripe shops offer it as a payment option nowadays. Getting this on all European webshops, for P2P payments (like Tikkie in The Netherlands), and in-store payments is just fantastic.

[drnick1]

> Usually that means scanning a QR code with your bank app on your smartphone where you confirm the amount and recipient, but you can use a physical card reader with your debit card for an OTP

This seems to be mobile-centric system that essentially requires a cell phone, and probably one blessed by Google or Apple. The app will probably leak a huge amount of meta data, far more than a credit card (especially a privacy-oriented prepaid one). This kind of "solution" is dead on arrival as far as I am concerned.

[haagch]

> but you can use a physical card reader with your debit card for an OTP to use as well and do it in your bank's online environment in the browser.

That's nice for ideal users, but Wero here in Germany is completely exclusive to mobile banking apps.

I have yet to see any actual confirmation in any way that ideal will keep the alternative web based payment once they fully merge with Wero. On the one hand, EPI never puts out any concrete info, on the other hand no Journalist ever seems to ask EPI representatives the important questions.

[pbreit]

How is that better than a card payment? Cards are accepted by far more merchants, have dispute rights, are inexpensive (in Europe) to process, supported by Apple & Google Pay, superior checkout experience, etc.

[MilaM]

You should not be distracted by the fact that SEPA Instant payments are used as the clearing mechanism. The Wero (EPI) backend IS the payment network and provides the messaging layer between the customer's bank and the merchant. Payment processors can interface with Wero and provide payment services for merchants in much the same way as they offer credit card payments.

[cyberpunk]

Sepa-inst requires 10 seconds or less end to end, this isn’t as easy as it sounds to implement, but we are kind of there.

The problem is how do you initiate this payment? Some kind of scannable code or nfc interaction seems to be the missing part. I’d also like to see some kind of physical card also work for those who don’t want or are unable to have an attestable device with them.

[WA]

I‘d love if every receipt had an EPC QR code on it: https://en.wikipedia.org/wiki/EPC_QR_code

You scan it with your banking app and have all the details. But it’s not super seamless. If you find this code on a website on your phone, you have to screenshot the code and load it in the app. Would be nice if there was some kind of deep-link standard.

[pbreit]

Industry observer Dwayne Gefferie took a stab at it (although I'm still highly skeptical): https://dwaynegefferie.substack.com/p/epi-european-payments-...

[omnimus]

I think they are hoping wero would one day work in countries worldwide as competition to visa/mastercard.

EU local payments already work instantly and feeless in many countries through SEPA. Lot of these countries are already on trajectory to gradually get off visa/mastercard for domestic payments as every ecommerce store pushes SEPA as the default payment to save on fees.

[hocuspocus]

There's no need for a worldwide solution, federation and interoperability between major schemes are enough.

The same way AliPay can be used in most Asian countries already, we can imagine a world where EPI, UPI, Pix and so on interoperate smoothly.

I assume Visa and MC will try to remain walled off as the US are a big and slow mover in this space, until they'll need to open up as well.

Note: payments (unlike transfers) are never really zero fees, for good reasons.

[tormeh]

For the neobanks I think it's very easy to explain: Their customers need Visa or Mastercard. No Visa/Mastercard? No retail customers. It's as simple as that. Any other payment scheme is a bonus thing that can be put on the backlog.

[wolvoleo]

That's a chicken/egg problem. It's going to be really easy to circumvent. Just make an EU card provider and mandate that it has to be accepted everywhere in the EU. Then users will want it and a critical mass will be created for vendors outside the EU to accept it as well.

[pbreit]

The merchant/processor/issuer network with all the correct incentives is (nearly) impossible to replicate. Visa and Mastercard work more or less, perfectly.

The only entities that need/want "instant, non-recourse payments" are fraudsters.

[globalise83]

In the EU countries with local instant bank payments schemes they are much more popular with consumers than credit cards when paying attrusted merchants, who in turn pay around a quarter in fees of what they'd have to pay for cards. No need for expensive credit cards schemes in Europe any more.