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European equivalent of Square, iZettle, commences UK beta trials

16 May 2012  |  8764 views  |  4 london tower bridge

Swedish mobile card swipe start-up iZettle - billed as the European equivalent to Square - is set to begin a beta-test of its technology in the UK.

Under the programme, iZettle is working with MasterCard, American Express and Diners Club to make 3000 of its mini chip-card readers available for small businesses and individuals in the UK.

Jacob de Geer, founder and CEO at iZettle comments: "The UK is a priority market for us and we are very excited about kick-starting this beta programme with three of the major card networks."

With more than 50,000 users today, iZettle has increased the number of point of sale (POS) card acceptance terminals in the Nordic by 10 percent since it began operation in Sweden last September and expanded to Denmark, Finland and Norway in February this year.

The iZettle reader is EMV-approved, and compliant with PCI-DSS standards. Much like Square in the US, there is no set up fee, or monthly fee or minimum, with the company making its money by taking a 2.75% to 3.75% tax on all transactions passed through the reader.

In February, iZettle hired former Barclaycard innovation chief Stewart Roberts to lead its operations in the UK. It also counts Carphone Warehouse founder Charles Dunstone among its investors. Dunstone is likely to play an important role in ensuring mass-market distribution once the service is ready for commercial roll-out.

"Taking payments is becoming increasingly difficult with people carrying less and less cash in their wallets," says Dunstone. "With iZettle - problem solved - you can focus on growing your business."

iZettle may face domestic competition on UK shores, with British outtfit mPowa preparing for launch. Initially slated for release in February, the company has yet to issue any devices on the market, but is instead inviting prospective users to pre-register their interest over the Web.

Comments: (4)

Philip McCarthy-Clarke
Philip McCarthy-Clarke - Market Gravity - LONDON | 16 May, 2012, 12:14

Good to see UK market entry at last. Interesting to note that it's a Mastercard/Amex trial - it'll need to be more universal to really scale, given Visa's dominant position in debit.

 

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 17 May, 2012, 17:10

Like Square, iZettle doesn't require its small business customers to have a merchant account. mPowa's pricing structure suggests that it does. Given that getting a merchant account directly from an acquirer bank is a major pain area for such businesses, iZettle shouldn't have any significant competition from mPowa. 

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A Finextra member
A Finextra member | 18 May, 2012, 07:40

iZettle today allows pan key entry of card numbers and therefore it is an excellent device for making card payments without the cardholders presense - why this is needed for face to face trading is unclear. Furthermore it is also distributed to private consumers enabelling these to receive payments from credit cards. This takes card payments to a new dimension when consumers start paying to consumers in a payment system like mastercard or american express, where all point of sale rules are based on that consumers pay to businesses. Exciting development. How come that point of sale terminal manufacturer giants have not been able to build a cheap and simple device like this? Does the device really meet all the normal requirements a pos terminal is expected to meet?  

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A Finextra member
A Finextra member | 18 May, 2012, 09:27

Not that I want to blow anyone elses trumpet, but anyone who's been in an Apple store recently will have seen that they run their EMV POS solution via ingenico jackets wrapped on iphones/ipods, wified to receipt printers under desk. The issues for smaller merchant use of mobile based POS, as others have commentated, are 1) the need for the merchant to sort out thier own merchant account, which is a REAL pain if you're a little sole trader or second income business, which is where the real market for these devices are, 2) the prohibitive hardware price point and 3) distribution network for the EMV devices. All the current mobile dongle type devices for the UK market are questionable for PCI, and more importantly, cardholder confidence, so I'm looking forward to a proper market release of a simple, reasonably priced EMV solution. This has potential not only for UK markets, but anywhere that has high EMV CH use. Well done iZettle. I'll certainly be trying out your solution, and hope that other solution providers join the fray.

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