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.

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.

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.

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.

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

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.

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.

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.

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.