“We want to offer one tool for all payment use cases.” As Europe pushes to build a homegrown alternative to Visa, Mastercard, and PayPal, what will it actually take to win consumer trust and merchant adoption at scale?
In our latest podcast, Martina Weimert, CEO of EPI, explains how the digital wallet Wero is expanding across Europe, why bank backing has been the key driver of its early growth, and what lessons from past pan-European payment failures are shaping a different path forward this time.
Do not hesitate to reach out to Yuriy Kostenko, Yuriy@flagshipap.com, with any comments or questions.
Listen to the latest episode on the following platforms:
Transcript
Martina Weimert
Hello, good morning.
Yuriy Kostenko
Martina, good morning. Good morning. How are you?
Martina Weimert
Fine, and yourself?
Yuriy Kostenko
Yeah, yeah, doing well, doing well. It’s a pleasure to meet you, Martina, and thank you again for taking the time to speak with me today. So let me, why don’t let me just start with maybe a brief introduction to myself and Flagship, kind of explain where we come from, and then we can move on into our true discussion on Wero.
So just briefly, Flagship Advisory Partners, we are a strategy consultancy focused exclusively on the payments and fintech sector.
As for me, I’ve been an advisor in payments and fintech space for 20 years now. My primary area of expertise is merchant acceptance, and I focus primarily in the European region. So that’s in the gist.
Wero is arguably probably one of the most significant developments in European payments ecosystem today, and I don’t say that lightly. In our work at Flagship, you know, we spend a great deal of time with payment service providers, with merchants. And the one theme that we’ve been consistently hearing for some time now
is certainly the need for greater European sovereignty in payments, you know, solutions that genuinely compete with the international networks. So yeah, this makes today’s conversation particularly timing. So Wero is, you know, no longer viewed as just another payment method. It’s rather this coordinated pan-European initiative that’s aiming to build this multi-market, almost alternative rights to those big global giants, Visa, MasterCard, Apple Pay. So anyway, it’s been a strong momentum that we’ve been hearing around you. I’m looking forward to discussing kind of your latest expansions, you know, whether it’s geographies, channels, you know, the transitions that you’ve been doing with the domestic schemes like Ideal, Pay Koenig, and then obviously just the broader growing alignment across the industry. So yeah, it feels like a perfect moment to hear directly from the leadership.
So Martina, I mean, again, thank you for joining me for the session. Before we dive in, would you mind just really briefly introducing yourself to me and ultimately to the audience or to the reader, if that’s all right?
Martina Weimert
Yeah, no problem. Thank you. So thanks again for organizing this and for your interest. So about myself, yeah, I’m with EPI from the very beginning, even before it was a company when it still was a pure idea because I was with the consultancy that was working for the group of banks that launched all this. And I had the pleasure to reach out to many players in Europe to identify whether they wanted to join this adventure, there was a real need for such a solution at European level.
And so, yeah, I know the whole thinking about the solution, the motivation behind it, and finally the setup of the company, but mostly of the product and the product design and the vision that is behind it, which is, as you maybe know, or certainly know, it is a payment mean, but it’s also a wallet. It’s a platform, it’s also a specific rule book. So it’s a very particular setup because it goes beyond the payment mean and it’s really a full-fledged solution. So that is the overarching ambition to give an alternative to Europe which would be more independent and would over time allow us to have something complete, something that can cater for all payment use cases and can cover a whole Europe, but also have an international perspective because we see a lot of interest for account to account payments all over the world.
Yuriy Kostenko
Understood, understood. Well, it’s certainly coming at very exciting times here in Europe. That’s to say the least. Anyway, well, yes, thank you for that introduction. So maybe as a first question, we could start with just a few basics just to help broadly introduce where Wero is today. If you don’t mind kind of sharing the latest updates on the products, you know, expansion across channels, any geographic rollouts that are, you know, already have happened or maybe upcoming, certainly would, yeah, would love to hear it, of course.
Martina Weimert
Yeah, so I mean, in terms of update, maybe in a nutshell, we are at 53 million customers. So that means people that can receive transactions and operate with us. And that is through the three geographies, France, Germany, and Belgium.
So far, we are right now, as you might have heard, in the migration of IDEAL, that migration will go on until end of 2027, because of course, it’s a major shift for the Netherlands and this whole migration has to be done very carefully. And we are finalizing the migration of Luxembourg until September.
So that will bring us the two additional countries and we are in implementation talks in Austria. So that is for ourselves. And then you have seen in the press that we are working with other digital solutions, so five other solutions over Europe to come up with a kind of interconnectivity, interoperability network, allowing us to do transactions, each of us using their current setup, their own solutions, but being accepted also abroad. So meaning mutual acceptance, allowing consumers to pay with their domestic or well-known own local solution when they are travelling. That is what will allow us to cover 13 countries and as of now, 130 million consumers in Europe. And we are doing this, yes, with Bizum, Bancomat, MB Way, SIPs from Portugal and the four Nordic countries are covered by VIPs Mobile Pay. But there are many more to come in that collaboration. That’s good because of course it is our interest to cover Europe as soon as possible and to allow functioning in a most convenient way there. So that’s a bit about the current status of geographical expansion.
From the use cases, you have seen that we launched e-commerce end of last year. So now we are doing P2P, P2Pro, and e-commerce in Germany and Belgium launched. And the first e-commerce transactions in France were done. I think it was 8 days ago. Yes. So, but the big rollout for France is more towards September, October. So this follows the usual track as foreseen being focusing this year on e-commerce and then next year more on point of sale, with first cases of point of sale already this year. Point of sale for us will be QR code, but then later on also contactless. And in our wallet, we will not only, of course, present our own payment mean, but also in the future cards, meal vouchers, and why not one day the digital euro?
Yuriy Kostenko
Right, yeah, digitally is another big topic, of course, but I just to let you know, I’m Amsterdam based, so I’m already seeing Wero in my daily transactions. Of course, it’s the logo next to ideal for now, but again, yes, it’s certainly.
As someone who spends time in payments, it’s exciting to see that change. Okay, understood. So yeah, very, very exciting. So you, the intent of course, it sounds like obviously multi-geographic and also very universal in terms of use cases, right? And you already mentioned that you already reached 53 million users, which is a very impressive number, of course. I mean, in terms of your kind of latest adoption or attraction, are you reaching the rates of adoption that you’re expecting both across? The end users and the merchants in cases where it’s not just a person-to-person payment form?
Martina Weimert
Yeah, so it’s going according to plan so far. Now the big challenge will be on the merchant side. I think it’s no secret to say that for us, the most challenging market is Germany because of the strong competitor PayPal, which is very, very developed in Germany, I would say. Yeah, definitely, that’s the strongest country for PayPal. And so we are following up very closely on our merchant rollout now.
For the time being, we have a very good pipeline, so many merchants wanting to adopt the solution. But you know, it always takes time until the whole integration is done, that their acquirer, their acceptance provider themselves, and sometimes they have even other providers in between which we need to recover, where we need to be integrated. So that turns out to be a long-lasting process, this whole integration implementation. But yeah, as I said, the pipeline is very good. The uptake so far is a bit slower than expected based on this scheduling issue that there is a bit or implementation issue. But I think as we get along, this whole thing will get more industrialized. And, you know, as soon as each of the biggest acquirers has done the first cases, they will become better at it. And I think then we will see a speed up of the rollout process. But yeah, it’s progressing every day. And maybe also very interesting to know is that we have now more than 50 members, meaning at the beginning, of course, we only had our shareholding institutions, bankers and acquirers as members. Now we have 50 all over Europe. That gives you an idea of the level of adoption on the issuing, but also on the acquiring side. On the acquiring side, the uptake is very strong, which is of course very important because if you want to read the merchant you need their acquirers, right? So we are happy to see the strong interest there, that they are implementing it now. They need not only to implement it for themselves, but also connect to the merchant side. And yeah, that’s what is happening now.
Yuriy Kostenko
And what have been the biggest drivers of adoption? And I appreciate there are various stakeholders here, maybe on the payment acceptance side. So these are the payment providers that obviously keen to learn more about Wero and obviously the merchants themselves, excited or not, finding out about Wero as a payment method. Like once what’s been driving this adoption to date?
Martina Weimert
I think there are, depending on the profile, different motivations. For many of them, yes, they are looking for a European solution. They want to have something alternative to Visa and MasterCard, which today is of course far-fetched because Visa, Mastercard is so big. But definitely in terms of use cases, I think they will find what they are looking for because we will offer not only simple payments, but also what we call advanced payments or one click subscription pre-authorization, deferred payment, recurrent payment, all these kind of payment types. So beyond, for example, what you might know from ideal in the Netherlands, which is just simple transactions, there will be all these other transaction time types, which will be progressively rolled out.
And for example, let’s start this year in the different markets. And the other motivation is, of course, cost.
Yuriy Kostenko
Right.
Martina Weimert
We are cheaper than the American solutions, which is always an important motivation for a merchant, right? And I think the third one is the omnichannel aspect. They like that with us, well, they can do the QR code stuff. They can do the different payment types, which might be different from other alternative payment means, which are more restricted. And yeah, that they can do QR code, but also, as I said, contactless. So that combination is very attractive for them.
for example, to be integrated in their own merchant apps, as in payment mean that functions with QR code, which you cannot do with a card. So it’s this kind of main motivations, I would say.
Yuriy Kostenko
Martina, I think you already mentioned, you know, a handful of schemes like PayPal, you know, that are obviously creating differences in your adoption rates because of, you know, it brings up that competition level. So today, you compete across of all these environments, right? So you compete against consumer wallets, Apple Pay, Google Pay. You obviously compete against the big card networks, Visa, MasterCard, right? To an extent, I guess you also compete with other account to account payment methods, at least until you find ways to partner with them. If you look across this entire competitive landscape. What do you what do you see as your kind of clearest or best competitive advantage?
Martina Weimert
Is it is the fact that it is close to your bank account and that it is offering the all-in-one? But I think, yeah, of course the UX has to be there, but there are good examples of UX, but they do not do all the payment use cases. It’s definitely in a competitive environment like Europe, difficult to stand out, but there is no solution which targets all the payment use cases and value-added services that are relevant today for consumers, like the integration of merchant loyalty programs, like the integration of Buy Now, Pay Later, in a native way, meaning fully integrated into the payment flow, not as a I don’t know which service somewhere available, but really available in the transaction, meaning, if I’m standing there and wondering, oh, do I pay directly or do I take a short-term financing for a certain purchase, I can make that decision ultimately in our perspective and the way how we want to roll it out seconds before the transactions or afterwards. And I have that choice and control as a consumer. So I think there are still areas which are untapped in Europe, but of course, yeah, it’s a very competitive environment and therefore we need to do this whole rollout progressively in order to win our seat at the table.
Yuriy Kostenko
Right, fair enough. No, yeah, look, yes, it sounds it’s quite a uniform proposition. It seems like you’re trying to improve the user experience. You obviously offering that control that many of the other apps wouldn’t have and, well, cost that you brought up earlier. That’s always a sensitive topic, at least for the merchant community. Okay. Understood. And you mentioned the banking infrastructure, right? Which is, you know, naturally you’re dependent on it in order to facilitate your transactions. How important are the banks in this equation?
Martina Weimert
For the banks, honestly, I don’t think we would have 53 million consumers now if we would not have the banks, right? We would be another fintech trying to win consumer attention with the banks. First of all, they brought us, yeah, their existing solutions like Paylib in France, right? But they’re also bringing the promotion and that marketing power that they have to their own consumers, right? If my bank tells me, listen, there’s this new solution. It’s never like a straight through yet. Just because your bank tells you, you will not do that. But at least it gives us a good positioning and a high level of exposure to client attention because yes, all shareholding banks do the advertising for us. They finance us. So for us, the banks are super important. Otherwise, yeah, it would be way more difficult to compete because we can say whatever we want about the banks.
The people trust the banks when it comes to security. They trust them in terms of that this is a good proposition for my own use cases. And they have access to a huge amount of, a huge number of consumers, which is what you need because, otherwise, how do you want to come up with these giants already being in the place? You need that leverage point, and the leverage point that the banks bring is consumer access.
Yuriy Kostenko
Right. No, makes sense. Makes sense. Well, what about the kind of the merchant community? Do you expect any of the merchants, maybe at least, you know, big brands operating across Europe, to play any role in helping you push the adoption of your solution?
Martina Weimert
The merchant will only do when it’s in his interest, right? So the merchant, if they consider that this is an interesting value proposition for him because he will have less costs or because it will help him to touch base on new consumer groups, or speed up the conversion rate, then he will, of course, yeah, push for that payment method. It has to be one of these advantages.
Yuriy Kostenko
Fair enough, well wasn’t sure if there was enough political capital that you could raise among the Europeans here and see if all the stakeholders would be more proactive in promoting your proposition?
Martina Weimert
I think they are proactive by declaring that they want to use the solution early on, right? Because usually the problem that you have is that everybody sits tight and waits. Oh, will it become successful? I mean, people don’t like to be front runners. So I appreciate that we have quite a lot of people declaring that they want to start early on and that they’re interested to get going and not to wait until it is a big success, right? So, and we need that because otherwise you are also always in that chicken and egg dilemma. So it’s nice to see that from their understanding, of course, having looked deeply into the solution, they like it, they think it’s meaningful for the consumers and they are rolling it out. But I think beyond that, you won’t get like political support because this is a good idea or whatever. It has to be really related to their own business focus and then they support it.
Yuriy Kostenko
Makes sense, like those natural expected outcomes that are just focused around, yeah, your own commercials. I mean, speaking of kind of the economics and actually some of the existing schemes that you said you’re already transitioning, like ideal, like Bitcoin, so, it’s a particularly kind of interesting aspect to merchants is the outcome of that transition from those existing domestic schemes. So, you know, as you replace Pay Koenig in Belgium, ideal in the Netherlands, how big of a kind of a change should stakeholders expect, in terms of, well, first and foremost, the unit economics or just pricing structure, otherwise any other, you know, elements that will be new to them, you know, the way that, for example, payment method operates, you know, concepts like charge bags?
Martina Weimert
Yeah, yeah, there will be, especially for ideal, as I said so far, ideal is simple transactions. Of course, we also do simple transactions, but then we will have advanced payment plans. I think that is new to what the Dutch merchants know so far and gives them more opportunities to use our solution or to offer it to their consumers. Then there are things like consumer protection and dispute management, which are integrated in our solution and which did not exist so far in the Netherlands. So, on the pricing part now, we are committed to keep the pricing for the time being as it is. We can of course not take in for whatever long commitment, but for the mid-term future, yes, we keep it. That’s our clear commitment.
And yeah, I think as we will roll out progressively, they will get the additional value of Wero beyond being European, so cross-border, which was not the case of ideal, even though ideal was or is accepted at many merchants operating even beyond the Netherlands.
Yuriy Kostenko
Right. And you said you already started this process, right? So I appreciate it won’t, it’ll go all the way till the end of 2027. But any, you know, any positive elements or the reverse, maybe any drawbacks that you’re already experiencing, you know, within these transitions?
I don’t know, things like lower conversion rates because the logo is different and consumer is confused or, you know, or maybe something something more more positive to.
Martina Weimert
No, I mean, right now, as you might have seen, we just started the branding campaign. So to explain, to make it more visible to the consumer, there is something happening with ideal. And that’s why we put the Wero logo closed there. And what is now happening is more technical migration in the back of the platforms. So that’s not visible to the consumer. In terms of how this is going, I think the only aspect where there is some debate is, yeah, you might have seen this, the merchants questioning whether they need consumer protection in the Netherlands.
We think it’s a general trend in Europe. I think it’s one of the main reasons, if you look also at consumer research, why PayPal is successful.
Digital euro will also offer dispute management. So, I think it’s like the new standard, and that is creating some debate with some acquirers in the Dutch market. And on the other side, what we see is that while it’s not a change for the Dutch consumer.
Consumers from other markets, for example, Germany, they now see the Wero logo and they think that they can already pay. And that is not the case so far because for the time being, it’s just branding. It’s like a pre-announcement. It’s the preparation. And so, not in the Dutch market, but outside. So for example, for German, but also for Belgian consumers, it’s creating a bit of frustration because now they want to pay with zero. And for the time being, they can’t. That will be the case in a couple of months, but not for now.
Yuriy Kostenko
Understood. Yeah, look, I mean, building a pan-European acceptance network is no small task. So yes, all understood. I’m sure you will come across the hurdles.
Martina Weimert
No, no, each market, each market has its particular environment constraints, you know, starting points. So you have to adapt to each of it while you are going for a pan-European consistent, unique product and not like 5 different versions of it. No, it’s one unique product integrated ones by an acquirer for all the markets where he’s active and not just for one. I think that’s a huge advantage, but which of course in terms of migration comes with constraints because it per se means that everybody needs to adapt in a certain way.
Yuriy Kostenko
Right. No, yeah, that’s all clear. I have one question that kind of delves into the learnings from the past, and I can’t help myself but ask. I mean, there’ve been attempts in the past in Europe to build a pan-European kind of this payment initiative. You know, from money to P27, I mean, you name it, they all ultimately failed, right? They struggled to scale and then effectively closed the shop. Are there any lessons that you know you have taken from those efforts, and is it going to be different this time around? I mean, I personally hope so, but just curious to hear what your thoughts are there.
Martina Weimert
Yeah, definitely. I mean, there are many things which are different this time. First of all, I mean, in the markets where we are active now, you know, you always need in Europe like a coalition of the willing. You never get whole Europe. We are fragmented geographical area and yeah, people do very different things. But if you cannot make it to a coalition of the willing, a strong and large coalition, you cannot make it, right? And that was the case, even for the euro which did not start in all markets. So, you need that all European projects basically started on a crisis basis. There is a reason why they emerge, because there is a certain unsatisfying situation. And so, a kind of crisis mode, and you have that coalition of the willing aspect that you need. And before, for example, in money, you didn’t have the German savings banks. You had Germany participating, but you didn’t have the biggest German player, which is the savings banks with 50% market share.
There was also a conflict with the European Commission, which finally led to the stop of the initiative, which this time is different. When we started, we went first to visit DG competition to understand how they would see such an undertaking. And there is enough I would say political support for such an initiative, so this time it did not face
huge regulatory constraints, which made it fail, which is also, of course, very important. So, and I think maybe most importantly, you know, there is a lot of debate, especially these days. Yeah, but European banks, they have sold Europay, they have sold Visa Europe and whatever. They will sell it again.
I think there was a huge movement in Europe to understand that some things happened in a bad way in the past, that it was an error to sell certain assets, and that banks have also learned from these errors. So I think we are benefiting from a huge learning curve from a very strong commitment. I mean, my board, I must say, they will see only in 2030 that if everything goes according to plan, and that the solution will reach the break even and that finally we will start making money. And, they are nevertheless very committed. I think it takes that long-term commitment, which today only banks can bring, because they are not in a short-term perspective. You know, we get approached by many private equity funds who want to invest.
I always know that this will not happen because it’s not a short-term investment. You don’t make the big cash in in five years. It takes longer. If you have to pay for the investment yourself, become profitable and compete in this very mature market.
Right, so, I think this long-term perspective, having learned from errors, a more friendly political environment, a bigger, way bigger interest for a European solution today than ever before, I think that are very important drivers for success, and gives us different conditions. It’s nevertheless not easy, let’s be clear, because of all that fragmentation and many markets sitting there and waiting to see if it becomes successful, then we will join, right? If everybody would have that attitude, nothing in Europe would happen.
But we have enough people that are convinced. And if I look at our member numbers, I see, well, there’s definitely a very strong traction because to have now 50 members that went through the whole scrutiny process, signing legal, blah, blah, blah, means that there is a lot of interest. But of course, we have also many challenges ahead of us.
Yuriy Kostenko
Yeah, fair enough. And look, I think you actually jumped to my next question, and I will make it my last. I think I’ve tortured you enough here. Well, I mean, you’ve described this future vision. Well, you didn’t describe it just yet, but you mentioned kind of, you know, what are the expectations in the long run, right? There’s a long-term vision here. I mean, if you fast-forward into the future, let’s say it is 2030, right? So, the year that you mentioned, what does success look like to you? What do you expect Wero to be? You know, how do you claim it as success?
Martina Weimert
I would say that we would become for Europe the preferred P2P wallet. And that one is clearly an indicator that we are aiming for, but beyond that, that we reach in a reasonable time frame at least 10% in e-commerce and that we have the first, yeah, big merchants out for point of sale, which is definitely happening, but which of course in terms of implementation, since each big merchant is different, requires some time. But I would say our near-term goals are these. And when I say near term goals, yeah, I think about 2030. So, and that we would expand in more markets, whether it’s through our own rollout or in cooperation with the interoperability network. But yeah, I would expect that through this, that we can cover at least like 16, 17 European countries until then.
Yuriy Kostenko
Right. And I think you gave me a flavor of that as well. You know, is the intention also to potentially expand beyond payments, you know, as a, you know, as a scheme, as a brand?
Martina Weimert
We are not beyond payments in terms of what, for example, the wallets or the solutions do in Asia, which are more like life portals instead of just being there for payments. We think that this space is covered by other solutions. You have your social media in Europe, where you do your lifestyle topics, right? You don’t do your messaging through a payment solution. We have to take in consideration what is our digital context or usage pattern that consumers have in Europe.
But I think that everything that is related to payments near or far, as I said, buy now, pay later, so credit, but also the integration with the digital identity, which I think is a vector of expansion, value-added services that are some are related to payments, but are not really, I mean, transaction driving, but that are important for consumers because yeah, they expect them. I think we need to build this up progressively. It doesn’t help to overwhelm the consumer with a lot of things.
But, you know, for example, on digital identity, once it will be rolled out at European level, there will be the vision of, oh yeah, but now it would be nice to combine it with payment because not only I need to provide my identity proof here, but I also need to pay for something if I ask for a new passport, if I want to do my inscription at university, you know? So, in this case, combining the identity element and payment in one flow can be very attractive beyond the simplest use case, which is you have to prove your age, especially in e-commerce, right? You have to prove that you are above 18.
So, wouldn’t that be nice if everything goes through in one movement, one transaction, instead of having to prove it first and then do the transaction?
Same thing if you rent a car or if you want to book a hotel. You don’t want to stand there in the line and queue to show your passport, your identity card, and your driver license and give the proof of your credit card. You can do all this in one flow.
And so that’s not directly payments, but it’s related to payments. So we are focusing on everything that is connected or related to your payment on top of the fewer different use cases. And there’s a broad variety of use cases to be covered in Europe.
Because we see a lot of sub-use cases fragmented, you know, this whole recurring payment, but also the whole area of subscription management. I want to have control there. I want to have the full-fledged overview of all the subscriptions I have, because as a consumer, I’m lost now. I have no tool at all that gives me the full-fledged overview of all my subscriptions and I think that is something which is valuable for consumers.
Yuriy Kostenko
No, yeah, I hope that feature comes soon enough. Like I, what you’re describing touches me even as an end user, not as even a practitioner in payments. But yeah, look, it’s a great, great note to probably end on. So Martina, thank you again. Thank you very much for joining me today for, you know, it’s been a great discussion and it’s certainly is a really important topic for European payments ecosystem for, frankly, the future of European payments. So it was great to hear that directly from you. Yeah, we can end it here, although I thought I would keep it short, but it seems like I’ve actually utilized most of the hour anyway.
But look, the insights were instrumental. Like, I’ve actually learned something new today. So that was really exciting to hear. So I really appreciate it. So Martina, thank you again.
Martina Weimert
Thank you. Thanks for your time.