Instant account-to-account payments have been around in Europe for more than a decade now, with several schemes operating very successfully at national level, like Blik in Poland, Swish in Sweden and iDEAL in the Netherlands. They are extremely popular, often with market shares of over 70%. But while these systems have been a success, they cater only to their specific markets and don’t often work across national borders.

While national systems have been a huge success, they cater only to their specific markets and don’t often work across national borders. So if I am a Blik user in Poland and I travel to Sweden, for example, I can’t pay with Blik.

One payment system across borders

There have been some moves towards interoperability between national systems, but it’s complicated. It’s simple enough set up interoperability for P2P systems, so a Polish user can send money to a friend or relative in Sweden. But paying for things in store or online is a whole different ball game. For one thing, different systems use different ways to initiate a payment – QR codes, bar codes and numerical codes – so visitors will often be presented with an unfamiliar, confusing interface.

What’s more, all these systems are completely different. Building interoperability between Poland and Sweden won’t help you when it comes to linking Poland and the Netherlands, or the Netherlands and Sweden. It’s a hugely complicated, hugely fragmented and hugely expensive technological challenge. And that’s before you get on to the different regulatory, consumer protection and dispute resolution systems across all those different territories.

All this friction means domestic payment systems are less attractive to businesses with an international focus, and they are more likely to opt for one of the large international payment schemes instead. That’s the problem Wero was designed to solve: making cross border payments in Europe secure, seamless and simple, Piotr Jan Petrzak, Head of New Markets at the European Payments Initiative (EPI), commented on this for the DIGIPAY BLOG.

The idea of EPI and its Wero system – which was founded by a group of 14 banks and the two largest European acquirers – is to remove as much of the complexity and fragmentation I mentioned above as possible by developing a truly pan-European system which is consistent and can be implemented all around Europe. It’s designed from the ground up to challenge the major international schemes, and to make cross-border payments in Europe not only possible, but easy.

Wero uses a single API to deliver a consistent user experience for the consumer no matter where they are – and it delivers economies of scale, long-term cost-efficiency and operational excellence to merchants and member banks alike. By removing borders, we can create a unified payment system allowing European consumers and merchants to buy and sell freely across our continent.

The wallet is linked to customers’ bank accounts, and is usually available in their regular banking app, it is already on their phones and in their pockets. In our three launch markets of Belgium, France and Germany we had access to 75% of all consumers from day one – and a share of up to 90% of retail transactions are handled by our member banks. There’s no need to persuade people to trust an unfamiliar brand or download a middleman app. It’s just a new service offered by the bank you already know. Which makes adoption a lot less of a challenge.

Bulgaria has a good payment infrastructure

Bulgaria is in a good place. It has developed a robust payment infrastructure, with high smartphone penetration and a growing acceptance of digital payments. That’s a good fit for the adoption of the Wero digital wallet, which is either available directly in the customer’s existing banking app, or as a standalone Wero app.

As Bulgaria gets ready to join the Eurozone, it is becoming more closely integrated with the European Union than ever before, and Bulgarian businesses and consumers alike are connecting with Europe through business, commerce and travel. By enabling faster, easier payments whether online or when travelling, Wero can help strengthen the country’s economic toes with the EU to promote both greater financial inclusion and increased economic growth.

Now that Wero is up and running, it’s relatively easy for new partner banks to join and to add the service to their consumer apps. It is a great opportunity for Bulgarian banks to prepare for a future where digital interactions are likely to surpass traditional, physical, card-based and cash transactions.

Consumers currently have to rely on different payment methods for different solutions, such as mobile banking apps, payment cards, or platforms like PayPal or Apple Pay. None of these existing payment solutions in European markets cover all use cases, which means customers have a fragmented payment that may even require multiple accounts. With EPI, this inconvenience is eliminated: our customers can pay anyone from one account through a unified solution. Wero empowers consumers with choice and control.

The great advantage for merchants is that there is only one integration

Having the means to settle disputes efficiently and in compliance with financial regulations like PSD3 is a key component of any payment solution – and Wero was designed to be fully PSD3 compliant from launch. But the real key is to avoid disputes as much as possible to begin with. By giving our customer as much information as possible– the merchant's commercial name, logo, location, and more, while still respecting the recipient’s data privacy – Wero users can feel confident their money is being sent to the right place.

In the event of a dispute, the customer can first contact the merchant, supported by data provided by EPI. If the issue is not resolved, a straightforward pre-dispute or chargeback process can be initiated, giving both the customer and merchant the opportunity to justify their claim and challenge the other side.

In this way, EPI makes payments much more secure from the very beginning of the transaction while also adding a chargeback capability to instant payments. This enhanced protection and provisions for both customers and merchants means EPI can also aid in commercial disputes. This is an important differentiator compared to existing digital payment solutions that do not provide the same support.