AmEx invests in iZettle; O2 launches PINpad for mobile payments

23 October 2012 | 6706 views | 0 iZettle1

Swedish start-up iZettle, which provides technology that turns mobile phones into payment terminals, has expanded its series b funding round with the addition of American Express.

The development sees AmEx become the second major card firm to join the round, following in the footsteps of MasterCard which signed on in June, along with Greylock Partners, Northzone, SEB Private Equity, and Series A investors Index Ventures and Creandum.

Werner Decker, SVP, merchant services Europe, AmEx, says: "The payments landscape is changing rapidly and we believe iZettle's solution will play an important role in helping to further enable commerce - especially in small merchant segments that have historically relied on cash - by delivering a smart and convenient way for small businesses to accept consumer payments."

IZettle has not revealed how much AmEx has invested to add to the initial round of EUR25 million but says the money will be used for product development and expansion into new markets.

The most immediate target is the UK, where the firm is already beta testing its technology ahead of a wider European roll out. In the Nordics, it claims to have increased the number of point-of-sale credit card terminals by more than 10% since the company began operations in Sweden last August, and expanded to Denmark, Finland and Norway in February this year.

However, while it may have secured the blessing of MasterCard and AmEx, iZettle has fallen foul of Visa. In July it was forced to stop processing Visa card transactions in Denmark, Finland and Norway over security concerns.

In the meantime, another dongle and app-based outfit Payleven has launched, building a keypad into its reader for PIN verification to meet Visa's standards. Another rival, mPowa is currently building its own keypad dongle and asking customers not to use its old swipe hardware.

And today, wireless carrier O2 launched a PINpad device, which works with Visa, MasterCard and Amex, connecting to a mobile phone via bluetooth for accepting payments via Android phone or tablet or BlackBerry smartphone. The company is also working on aversion for iPAD and iPhone.

The O2 PINpad costs £150 upfront or £15 per month for 12 months, with credit card transaction fees of 2.95% or £0.75 for debit cards.