Swedish start-up iZettle, which provides technology that turns mobile phones into payment terminals, has been forced to stop processing Visa card transactions in Denmark, Finland and Norway.
Sounds as if what is good for the goose isn't good for the gander if you are Visa.
Aggregation of merchant accounts wasn't kosher until Visa invested in Square - then it was fine. Now Visa, when it sees MasterCard has an investment in the much more technoligically advanced iZettle, shuts down iZettle's ability to aggregate Visa transactions.
How come that Visa stops the iZettle payments in Norway, Denmark and Finland but keeps them up in Sweden? Are there more security or functionality challenges in some of the nordic countries than in other? Or are the Sweden more relaxed about the rules on
chip+pin and payment security? Is Visa allowing the iZettle in any other markets?
Since Visa stands to lose interchange revenues as a result of this move, can't help feeling that it's going ahead with it only to stave off competition for the European launch of SQUARE, in which its has invested.
On another note, as long as nonbank mobile payment vendors use existing banking rails, they'd always be dependent upon banks and card networks for their very existence. This is a far cry from naive expectations that they'd disintermediate banks.
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© Finextra Research 2014