It has been only two months since iZettle entered Mexico and it seems that our speculations about possible rapid expansion through the Banco Santander partnership might not be far from the truth as they have just announced that they are now in Brazil.
At first glance, this news might seem a little blunt, but we really do need to look at the global picture. For instance, you might be surprised to find out that Brazil is the worlds second biggest card payment market, second only to US. Moreover, as Magnus Nilsson, iZettle's Co-founder and Chairman of iZettle Brazil, told us: "99.7% of companies in Brazil are SMEs and micro merchants and [they] want to empower them with a cost-effective way to take payments other than cash, so they never have to miss out on a sale again. From sole traders in remote towns, to micro merchants in major cities, this is the start of a big change for Brazil."
Still, the biggest story of all is that iZettle did this in just two months, which means that an extremely rapid growth and expansion is possible and likely to happen.
With this, we have reached out to Johan Bendz, who is iZettle's Chief Marketing Officer and he told us that expansion to Brazil is of great importance to the company. He told ArcticStartup that "Brazil is a country with a population of almost 200 million. From a payment volume point of view it is also a huge country. Since last spring, we have global infrastructure that allowed us to launch in Mexico and now also in Brazil. It means than just in a couple of years, we have built a payment network infrastructure, which is truly global. We are fully prepared to handle both customer acquisition and service."
This talk of a global infrastructure basically "means that it makes it possible to offer iZettle service in all parts of the world", according to Bendz. This is exactly what we mean, if iZettle was able to launch in two very large economies in under two months, then they have everything ready for rapid growth and we can expect them to become a true leader in chip & pin mobile payments solutions.
It is not about an ability to quickly open a local office, which they do have in Brazil, but more importantly to quickly enable payments anywhere in the world, almost at a flick of a switch.
Couple that with their, apparently ever tightening, partnership with Banco Santander, who act as resellers in countries such as Span, UK & Mexico and you have a potentially perfect cocktail for success.
iZettle seems to also understand that they have to treat their potential customers as you normally would in SaaS businesses. Basically if you get them using iZettle, they probably will continue doing so for considerable amount of time, increasing their customer lifetime value significantly. And if you customer lifetime value is high, then you can afford to have quite an expensive cost for customer acquisition. Which is exactly why iZettle has given away 10 000 free chip & pin devices in Mexico and announced that they would be free in Brazil until September 30th.
In Mexico, the campaign was very successful, as Bendz told us: "Mexico has been an amazing start. There has been a huge interest. We had an introductory offer of 10 000 free card readers and the last one of those went out the door before the first week was over."
Put all of this together and we can assume that this expansion is not going to stop here and we can see other countries, where Banco Santander is present, to be targeted by iZettle. Of course, it would be great to see iZettle enter the US market, but Bendz told us that it is too early to comment on that. He did mention that he was happy that the Finnish iZettle office has moved to ArcticStartup's Minimum Viable Office co-working space, so I guess we will hear about any possible future plans firsthand.