iZettle, the chip card reader that allows anyone to take credit card payments on their smartphone, announces it is launching a test run in the UK. Three thousand mini-chip card readers are being made available for small businesses and individuals who are willing to participate in the beta trial.
We covered iZettle's payment fees recently, as the company just dropped the €0.15 transaction charge, leaving just a 2.75% fee for MasterCard, Visa, or Diners Club. American Express comes with a 2.95% fee. Missing from the UK launch is Visa credit card acceptance.
The strategy of most Nordic startups seems to be first knock out your home market, and then use the UK as a launching pad for the U.S. market. But as most American credit cards do not support chip card payments, this is obviously not iZettle's strategy, leading to the question why they chose the UK over Germany, for example.
Jacob de Geer, CEO and founder of iZettle tells us that a combination of factors led to their decision to launch in the UK as their first step out of the Nordics, such as smartphone penetration and chip card penetration. The UK also uses a chip and signature solution, which iZettle sees as a "complexity well worth exploring."
The company plans to hit all the prime European markets by the end of the year.
I also had to ask de Geer whether they were considering getting into the online payments space as well, as seeing that the app doesn't even require a credit card reader and information can be plugged in manually in some circumstances.
de Geer responded, "To be honest, not right now. The market is pretty crowded as it is. Offline payments and these new segments are a much more interesting market right now."