Wero Aims to Overtake Visa and Mastercard in Europe

European banks have launched Wero, a digital payments system aimed at challenging the dominance of Visa and Mastercard on the continent. The system has made progress, but still lags behind in processing volume, with RBC Capital Markets reporting that it handles less than 1% of the European Union's payment volume.

According to RBC analysts, Wero faces several hurdles, including its limited interoperability and lack of widespread acceptance. The system also only offers debit transactions, unlike Visa and Mastercard, which provide both debit and credit options.

The European Central Bank has expressed a desire to reduce reliance on US-based payment networks due to geopolitical tensions. Wero's backers plan to expand the system in coming years, reaching into more countries and adding new features such as merchant loyalty programs and subscription payments.

However, RBC analysts believe that Visa and Mastercard retain advantages in security, interoperability, and value-added services. The introduction of a digital currency system based on the digital Euro in 2029 could potentially build a universal acceptance platform for Wero, catalyzing its adoption.