Lidl has enabled SEPA bank transfer payments for customers in Germany through its Lidl Plus mobile application, bypassing card network infrastructure.
Through this move, Lidl allows shoppers to complete purchases using direct bank transfers via the Single Euro Payments Area (SEPA) framework. Customers initiate payments through their banking application, with funds transferring directly from customer accounts to Lidl's account without card network intermediaries.
SEPA Instant Credit Transfers, which became mandatory for eurozone banks to support, settle within seconds on a 24/7 basis. The regulation enables direct bank transfers to function as viable point-of-sale payment options comparable to card transactions in terms of settlement speed.
Payment sovereignty initiatives reduce network dependency
The implementation aligns with European policy objectives to reduce reliance on US-based payment infrastructure. EU policymakers have emphasised payment sovereignty and the development of regional alternatives to international card networks, citing economic considerations and data governance factors.
Lidl's direct transfer method eliminates card network interchange fees, which typically represent a percentage of transaction value charged to merchants. The approach removes tokenisation processes and foreign payment processor involvement from the transaction flow.
European retailers have increasingly adopted local payment rails, including direct bank transfers and mobile wallets such as Wero, developed by the European Payments Initiative (EPI). The EPI consortium comprises European banks building pan-European payment solutions as alternatives to Visa and Mastercard infrastructure.
SEPA infrastructure supports retail transactions
SEPA operates as the unified payment framework for euro-denominated transfers across the EU. The system standardises bank transfers, direct debits, and instant payments across participating countries.
The SEPA Instant Credit Transfer regulation, which entered full implementation in stages from 2024, requires all payment service providers to offer instant euro transfers. The mandate ensures universal availability of real-time settlement infrastructure across the eurozone.
Direct bank transfers avoid these fees while providing immediate settlement through instant payment infrastructure. However, the payment method requires customers to use mobile banking applications and complete authentication processes during checkout.
Consumer adoption of account-based payments has increased as mobile banking usage expands. Digital wallet usage and direct bank transfer familiarity support alternative payment method acceptance at retail locations.
Payment orchestration platforms and fintech infrastructure increasingly support multiple payment rails, enabling merchants to offer diverse payment options based on cost optimisation and customer preference.
