Finextra TV: iZettle launches in the UK

Finextra TV: iZettle launches in the UK

Swedish start-up iZettle, which provides technology that turns mobile phones into payment terminals, has teamed up with wireless operator EE to launch in the UK.

The iZettle app and card reader, which works with iPhones, iPads and more than a dozen Android handsets, enable merchants to accept card payments through their phones.

Initially, the dongles will be available to buy at EE's 297 stores and through its tele-sales channel for £20, with buyers also receiving a £20 voucher towards the transaction fees.

These fees are set at 2.75%, with the firm targeting small businesses and tradesmen. According to an EE survey, the UK's plumbers, electricians and builders are currently owed up to £283 million by late or non-paying customers.

At the launch in London yesterday, Marion King, president, UK and Ireland, MasterCard - which is an iZettle investor - tested the system with online jewellery retailer My Flash Trash: 

The iZettle device is EMV-approved and generally works on a 'chip and signature' basis on the phone. In the UK, a merchant using iZettle can accept MasterCard, American Express, Diners Club and Visa.

However, Visa Europe's rules and regulations mean that payments are not accepted via the card reader. Instead a text message, with an embedded URL, is sent via the merchant to the purchaser's phone and the card details are entered at a secure Web site. The compromise comes after much wrangling, with iZettle unable to accept Visa payments during its six month, 4000 participant-strong UK beta phase.

Jaqcob de Geer, CEO, iZettle, says: "The beauty of iZettle is that it's simple to use, totally secure and takes seconds for transactions. Whether you are a cabbie, florist, tradesperson or a courier, iZettle gives you the flexibility to operate in both cash and cards."

De Geer, King and EE chief marketing officer Gerry McQuade, discussed the launch in a special panel: 

The full UK launch comes on the heels of iZettle's arrival in Germany through a partnership with DZ Bank and Deutsche Telekom. In Sweden, Denmark, Finland and Norway, the start-up already claims more than 75,000 customers.

However, it faces plenty of competition from the likes of PayPal, German-based Payleven and London-headquartered mPowa, while, across the Atlantic, market leader Square is expected to make an international push.

Comments: (4)

A Finextra member
A Finextra member 07 November, 2012, 07:391 like 1 like

In Scandinavia this device is mostly used by consumers paying monies to each other for private sales of second hand items. The vast majority of transactions and turnover is consumer to consumer payments and not consumer to small business. It is sold through channels attracting mostly consumer customers like appliances store catalogues. It seems like the card schemes are opening up merchant point of sale payments to be used also for consumer to consumer payments normally dominated by the credit transfers. In iZettle the issuer is earning interchange revenue on these consumer payments while this revenue source is prohibited for credit transfer type of payments in the sepa end date regulation. Cunning! 

Craig Lawrance
Craig Lawrance - Starkspur Ltd - Chalfonts 07 November, 2012, 08:57Be the first to give this comment the thumbs up 0 likes

This is a step forward for increasing electronic payments. But please help me understand how chip and "signature" will not attract more card fraud.  Or is the signature somehow captured and compared with an electronic profile?

Is 2.75% really enough to pay for all that additional fraud?

A Finextra member
A Finextra member 07 November, 2012, 09:581 like 1 like

Craig-  the fraud will be dependent on the type of merchant and goods sold - generally tradesmen (for example) perform work at an address -  if you want to pay for your plumbing with a stolen card fine, but expect to have an irate plumber on your doorstep sometime soon!  This is going to be horses for courses.... I understand Square have some very strange settlement interruption rules when it comes to fraud management.. as with all these things, time will tell. Personally I think this is one form of Mobile Commerce that has a real opportunity to flourish and also move into the developing world in a very meaningful way.  I wish IZettle every success

Chris Harris
Chris Harris - Worldline Group - London 07 November, 2012, 14:531 like 1 like

Great to see iZettle bringing solutions to latent under-served markets; from Home Hairdressers to Skip Hire, consumers will no longer have to fumble around kitchen draws to find chequebooks. As an industry we should do all we can to prevent fraud but please let keep things in perspective and not lose sight of the overwhelming vast majority of payments that are honest and legitimate but inconvenienced by lack of availability or stifled by authentication protocols so obviously tacked on to dated processes. In today's social, always on, connected multi-channel world having a different payment method and process for each is not sustainable. Good luck to the innovators of our industry that dare to question the cosy norms of the payments. 

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