Hi Jeremy, thank you for the deep dive. I agree with you in many aspects but would like to add som points:
* The SOFORT figures are incorrect. SOFORT supports 85 million accounts but not 85 million consumers (Germany has around 82.7 million citizens!). In fact, the concept of a consumer is not existing in SOFORT or the open banking world as users don't have to register.
* I am curious to see how the iDeal migration will look like? The technical concept of iDeal today is an A2A solution, wero works differently. If all existing merchants, PSPs, .. have to technically and commercially migrate I am not sure if the timeline of 2026 will be met.
* wero plans to launch online-payments mid of next year, but no commercials have been published yet to the market nor merchants.
* The market share of Nexi and Wordline is rather small in e-commerce. Stripe, mollie, Adyen are all missing. And considering iDeal is about to migrate, all of those must subscribe to wero as well.
* Last but not least, banks don't own consumers. Banks need to convince users to sign up to wero and use it as well. A hard job given the sheer number of alternatives in the market for making online payments.
So I do see a lot of risks which need to be addressed and with commercials being the most critical item to convince merchants to sign up for wero. I hope the founding banks will accept that it takes many many years to make wero as success.
1. On SOFORT you are correct, looking back at the websites I researched, I believe the 85 million refers to the number of Klarna's customers, Klarna owns SOFORT, rather than the number of people using SOFORT. Other feedback I have had suggests the actual figure is considerably lower, even though SOFORT is available in Austria, Belgium and Switzerland as well as Germany (where it started).
2. I have no information on the iDEAL migration to Wero and I believe none is available publicly. Initially, it could be just a brand change, with the NL version of Wero running on different technology - it will be interesting to see the approach they take
3. iDEAL is available to merchants through acquirers and collecting PSPs - there are over 70 in total including Adyen, Mollie and Stripe, so I expect they will all be included in the migration to Wero, at least for Dutch payers, even if initially it is just a brand change
4. Wero is available through banking apps as well as a a standalone app - therefore, as is the case with iDEAL today, Dutch consumers should have no need to sign up to Wero, access will be automatic from their bank account i.e. they click on the Wero button, select their bank, open their mobile banking app or online bank, make the payment and return to the merchant site. Again, it will be interesting to see how this is implemented.
5. There are a lot of risks, but the right ingredients are in place and flawless execution will determine Wero's success, particularly in the iDEAL migration - and, as you say, the commercial model for NL merchants to stay on board (they get a good price with iDEAL) and for merchants in France, Germany, Belgium etc to join.
Hi Jeremy, thank you for your feedback on my comments. Let me add some remarks on it.
The transition from wero to wero can't be only a brand change. Merchants integrating wero expects that Dutch clients can use wero as well. So you have two options: 1) establish a form of interoperability or 2) migrate iDeal consumers and merchants to wero. Option 1 is probably only delivering a compromise as interoperability can only be achieved on all functionality if both (iDeal and wero) offer the same functionality. I would expect wero to offer more.
2. If you want to migrate consumers you have two points to consider: the legal and technical migration. The technical migration may not be visible to the user (who doesn't care anyhow) but the legal migration will at least require a click by the user to accept new Ts&Cs. If not managed otherwise.
Anyhow, I guess we are both guessing here and make up a lot of thoughts. Let's see what wero and iDeal have thought and will deliver.
What concerns me in fact most is that all of this is not yet transparent to acquirers, PSPs and merchants.
Nice write up! I agree with the success factors listed here. Also general preference for debit based payments in Europe is a big factor compared to the UK and USA.
Hi Jeremy, thank you for the deep dive. I agree with you in many aspects but would like to add som points:
* The SOFORT figures are incorrect. SOFORT supports 85 million accounts but not 85 million consumers (Germany has around 82.7 million citizens!). In fact, the concept of a consumer is not existing in SOFORT or the open banking world as users don't have to register.
* I am curious to see how the iDeal migration will look like? The technical concept of iDeal today is an A2A solution, wero works differently. If all existing merchants, PSPs, .. have to technically and commercially migrate I am not sure if the timeline of 2026 will be met.
* wero plans to launch online-payments mid of next year, but no commercials have been published yet to the market nor merchants.
* The market share of Nexi and Wordline is rather small in e-commerce. Stripe, mollie, Adyen are all missing. And considering iDeal is about to migrate, all of those must subscribe to wero as well.
* Last but not least, banks don't own consumers. Banks need to convince users to sign up to wero and use it as well. A hard job given the sheer number of alternatives in the market for making online payments.
So I do see a lot of risks which need to be addressed and with commercials being the most critical item to convince merchants to sign up for wero. I hope the founding banks will accept that it takes many many years to make wero as success.
Hi Christian - many thanks for your feedback.
1. On SOFORT you are correct, looking back at the websites I researched, I believe the 85 million refers to the number of Klarna's customers, Klarna owns SOFORT, rather than the number of people using SOFORT. Other feedback I have had suggests the actual figure is considerably lower, even though SOFORT is available in Austria, Belgium and Switzerland as well as Germany (where it started).
2. I have no information on the iDEAL migration to Wero and I believe none is available publicly. Initially, it could be just a brand change, with the NL version of Wero running on different technology - it will be interesting to see the approach they take
3. iDEAL is available to merchants through acquirers and collecting PSPs - there are over 70 in total including Adyen, Mollie and Stripe, so I expect they will all be included in the migration to Wero, at least for Dutch payers, even if initially it is just a brand change
4. Wero is available through banking apps as well as a a standalone app - therefore, as is the case with iDEAL today, Dutch consumers should have no need to sign up to Wero, access will be automatic from their bank account i.e. they click on the Wero button, select their bank, open their mobile banking app or online bank, make the payment and return to the merchant site. Again, it will be interesting to see how this is implemented.
5. There are a lot of risks, but the right ingredients are in place and flawless execution will determine Wero's success, particularly in the iDEAL migration - and, as you say, the commercial model for NL merchants to stay on board (they get a good price with iDEAL) and for merchants in France, Germany, Belgium etc to join.
Hi Jeremy, thank you for your feedback on my comments. Let me add some remarks on it.
The transition from wero to wero can't be only a brand change. Merchants integrating wero expects that Dutch clients can use wero as well. So you have two options: 1) establish a form of interoperability or 2) migrate iDeal consumers and merchants to wero. Option 1 is probably only delivering a compromise as interoperability can only be achieved on all functionality if both (iDeal and wero) offer the same functionality. I would expect wero to offer more.
2. If you want to migrate consumers you have two points to consider: the legal and technical migration. The technical migration may not be visible to the user (who doesn't care anyhow) but the legal migration will at least require a click by the user to accept new Ts&Cs. If not managed otherwise.
Anyhow, I guess we are both guessing here and make up a lot of thoughts. Let's see what wero and iDeal have thought and will deliver.
What concerns me in fact most is that all of this is not yet transparent to acquirers, PSPs and merchants.
Love the ads. How come we never saw Paym ad like that?
Nice write up! I agree with the success factors listed here. Also general preference for debit based payments in Europe is a big factor compared to the UK and USA.