Wero Mobile Wallet: Added Value for Swiss Consumers?

On July 2, 2024, two German banks and three Belgian banks jointly launched the payment app Wero. Other banks from various European countries like France, Italy, and the Netherlands plan to add support for Wero in the coming months.

The Swiss mobile payment service Twint and the Danish app Mobile Pay were frequently mentioned as role models for Wero. That does not surprise me, considering Twint’s success story. Many consumers in Switzerland have adopted Twint, which has been installed on five million phones. Around 590 million transactions were made using Twint in 2023.

Is Wero the Pan-European Twint?

There are many similarities between Twint and Wero:

• Use is limited to a specific region: Twint is only available in Switzerland, and Wero is only available in EU countries.
• No IBAN required for transfers: One of the main reasons that Twint has become widely adopted is that users can make transfers using only the recipient’s phone number. Bank account information is not required. Wero lets users make transfers using either a phone number or an email address.
• Instant transfers: The transferred money is credited to the recipient’s account within seconds.

But there are also a few important differences between Wero and Twint, apart from the geographical regions (Twint in Switzerland, Wero in the EU).

• A bank account is required: Twint can be linked to a bank account, but a bank account is not a requirement for using Twint. Additionally, Twint is available to all Swiss consumers, and not just customers of specific banks. The UBS version of Twint can be linked with any Swiss debit card or credit card. That is not the case with Wero. You can only use Wero if you are a customer of a bank that supports it.
• Features: Currently, Wero can only be used for bank transfers between users, though it is possible that new functions will be added in the future. Twint, on the other hand, can be used to pay at both online and brick-and-mortar stores, and also includes a number of other features in addition to transfers between users.

Wero and Twint could complement each other

The idea of adding cross-platform transfers between Twint and Wero seems obvious. If Wero adds the ability to make payments in stores, then it could eventually be possible for Swiss consumers to use Twint to pay at stores that accept Wero. Likewise, Wero users may eventually be able to use Wero to pay for purchases from Swiss merchants that accept Twint. But currently, no such cross-platform transactions are possible.

EMPSA, an association that promotes cross-border transactions with various European mobile payment solutions, has existed for five years already. Twint is a founding partner of that association. But up until now, it has not been possible to make cross-border transactions using these platforms.

In response to a moneyland.ch inquiry, Twint said that considering a possible collaboration will make sense if the service becomes widely adopted. But currently, no such collaboration agreements have been made.

Wero is currently not widely available to Swiss consumers

In order to use Wero, you have to have a private account at a bank that supports it. Because of that, using Wero is not a realistic option for most Swiss. Theoretically, Swiss consumers can use Wero if they have an account at a foreign Wero partner bank.

Residents of countries that border Switzerland can use Twint without needing to link a bank account. But Vero, on the other hand, is not readily available to residents of Switzerland. I find that a shame.

Ralf Beyeler’s assessment of Wero

In principle, I welcome the idea of a pan-European payment app. But I find Wero’s somewhat closed system somewhat disappointing. For a payment app to be successful, it has to draw as many consumers and merchants as possible. Being able to transfer money between friends is good, but the most important function of a mobile wallet is to make payments at online and brick-and-mortar stores. According to media reports, it will likely take around two years for Wero to add this important feature.

My detailed assessment:

• Late to the game: Wero is very late in coming to the mobile wallet table. By comparison, Twint launched almost a decade ago. A number of attempts to build national mobile payment systems in European countries have failed. Creating a pan-European mobile payment solution makes sense – and is long overdue.
• Unnecessary bank account requirement: Only people with an account at one of the participating banks can even use Wero at all.
• Closed ecosystem: Currently, then banks planning to incorporate Wero are primarily large, established banks. Neobanks have not yet expressed an interest. Younger, digitally inclined people are more likely to use neobanks, and therefore will not benefit from Wero.
• Fierce competition: There is already fierce competition in the mobile wallet space. Paypal is just one example of a strong competitor. Neobanks like Revolut and Wise have enabled fast transfers to phone contacts for many years now.
• Instant payments: The SEPA Instant Credit Transfer system that enables instant bank transfers is already widely used in many EU countries, and competes with Wero’s fast transfer service. Neobanks like Revolut and Wise also offer instant SEPA transfers.

One of the goals of the European banks behind Wero is to reduce dependence on the US payment networks Mastercard and Visa. The addition of a new competitor to this playing field is a healthy development, in my opinion.

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