In the era of digital transformation and innovation, the European payments market is undergoing a remarkable shift. With the emergence of new technologies and the growth of new players, it is good to understand how these developments can influence the way we pay and what opportunities they present for consumers and businesses.

This analysis takes a closer look at the introduction of iDEAL 2.0 and EPI’s ambitious steps to develop a European payment wallet. The emergence of new payment cards such as Visa Debit and Mastercard Debit is also highlighted. The article concludes with the potential impact of these developments on the European payments market and what you can do now as a merchant.


iDEAL 2.0: The Next Step in Online Payments

iDEAL, founded in 2005 and long the most popular online payment method in The Netherlands, is now taking a leap forward with iDEAL 2.0. This new version (currently still in pilot phase) promises an improved user experience for ‘guest checkouts’. Customers are expected to create a one-off profile with IBAN and name and address details. This makes online payment via iDEAL easier for this consumer and makes the checkout process faster. The concept is very similar to the well-known PayPal wallet in combination with PayPal Express Checkout.

Possible benefits of iDEAL 2.0

Advanced functionality: With iDEAL 2.0, users can benefit from improved functionalities and order faster. This will enrich the overall user experience and possibly increase conversion for customers who do not want to create a customer account with the online store.

Customer loyalty: Merchants may benefit from greater customer satisfaction and an increase in the number of returning customers without a customer account in the webshop. The “wallet” concept will soon allow additional services to be added to the iDEAL profile in a customer-friendly manner.

Possible disadvantages of iDEAL 2.0

Technical challenges: Implementing this new service may involve risks and costs for merchants. It is important that challenges are quickly addressed to ensure a smooth transition to iDEAL 2.0. Users may have to get used to the new functionalities. This can lead to temporary confusion and frustration for both consumers and merchants.

Higher costs: iDEAL 2.0 is positioned as an added value compared to traditional iDEAL and payment providers may charge higher transaction costs to their merchants. iDEAL 2.0 actually remains a bank transfer from one (IBAN) payment account to another.


EPI’s European payment wallet (wero)

The acquisition of iDEAL (Currence iDEAL B.V.) and Payconic (Payconiq International S.A.) by European Payment Initiative (EPI Company SE) marks an important step in the development of an integrated payment system in Europe, the wero. There have been such initiatives before, for example MyBank, but this time it seems serious. EPI is owned by 15 European financial institutions including ABN AMRO and ING. iDEAL 2.0 could well be the basis of wero, but haste is needed to generate support and acquire international market share.

Possible benefits of EPIs wero

Geographic footprint: Where iDEAL is mainly a national party, EPI’s payment wallet will make it easier for consumers to make transactions across different European countries, without having to use other, alternative/local payment methods. This may further reduce the costs for international payment transactions.

Innovation and efficiency: By combining iDEAL with EPI’s technological expertise, the European payment wallet will offer a uniform and efficient payment experience for consumers and businesses. More standardization within the European member states and facilitating the commercial potential of the European internal market.

Possible disadvantages of EPIs wero

Adoption challenges: Adoption of a new payment method can be slow and dependent on effective marketing and education campaigns. Consumers must be convinced of the benefits and conveniences of the European payment wallet before they start using it en masse.

Regulatory Obstacles: EPI may face complex regulations in several European countries, which could delay the development and rollout of the European payment wallet. It is essential that EPI works with regulators and stakeholders to ensure that the payment wallet complies with all regulatory requirements and standards.


New Visa Debit and Mastercard Debit payment cards

The new payment cards such as Visa Debit and Mastercard Debit, replacing Vpay and Maestro respectively, are currently being rapidly rolled out to Dutch consumers. With the introduction of these payment cards, it is no longer necessary for Dutch consumers to use iDEAL to pay quickly online with their (IBAN) payment account.

Possible benefits of these new payment cards

Global acceptance: Visa and Mastercard are globally recognized brands, meaning cardholders can benefit from an extensive network of acceptance points around the world, online but also offline (POS). Visa Debit and Mastercard Debit have been accepted payment methods abroad for much longer, so merchants have direct access to the potential of these foreign consumers.

Increased functionality: Support for one-click payment/click to pay, support for pre-authorization (useful for hotel stays or deposit payments) and setting up recurring payments.

Possible disadvantages of these new payment cards

Potential costs: Some cards may incur annual fees for consumers. Merchants may also be charged higher transaction costs by payment providers than they are used to for existing/traditional payment methods.

Dependence on external parties: The use of international payment cards means that European consumers remain partly dependent on financial institutions and systems from outside the EU. This could pose geopolitical risks and affect the resilience of the European payment infrastructure.


Expectations for the Future: Innovations are on the way, but at what cost?

With the continued evolution of the European payments market, we can expect to see further consolidation and collaboration between different players. Innovation will continue to be the driving force behind new developments, with a focus on delivering frictionless, secure and cost-efficient payment solutions for all European citizens. It is not yet known which party will acquire a dominant position in this, but the parties mentioned in this article (… and parties not mentioned) will continue to do everything they can to position themselves as ‘conversion improvers’ and increase their European market share.

For example, if you, as a merchant, have already been told that transaction costs are being increased, for example for iDEAL 2.0, Mastercard Debit, Visa Debit or Klarna, and it is a significant cost item for your organization, please contact us.


Is this how a checkout page is going to look?

This article has also been published on on 15th April 2024.