When we wrote about iZettle's partnership with Banco Santander, we mentioned that this is a big step for the company that will open doors to growth and expansion. Today, this is becoming a reality as iZettle announced its launch in Mexico today. Not a big deal, right? Wrong.
First of all, this is their first expansion outside of Europe, meaning that the company is on a path of growth in global markets. Strong presence in Mexico, the worlds 13th biggest economy, gives them the footing that the company needs to quickly spread across the Americas.
Today, iZettle announced a strategic investment of €5 Million from Banco Santander, the EU's largest bank by market cap and one of the largest banks in the world. How big is that? EUR 1.388 Trillion with a "T". iZettle started working with the banking group already a few months ago, when they announced a partnership which made iZettle available to Santander banking customers in Spain, their home market.
When we compare the investment size to iZettle's overall funding of over €35 million, then it is clear that this is indeed a strategic investment and the money is perhaps secondary. After all, when it comes to mobile point of sale solutions, the name of the game is partnerships. How many different parties and entities can you partner up that can help you grow in different markets? iZettle's US rival Square, for example, was backed by VISA when it clearly did not need the money.
iZettle Takes A Further Step Into The POS Market: Supports Cash Drawers, Printers, Introduces New Software
If you have been following the developments in the mobile payments scene, you would notice that the competition is fierce. For instance, just recently iZettle and Payleven launched a new Chip & PIN device that will support all major credit and debit cards. However with extremely similar services, offerings and prices, these companies need to find ways of differentiating themselves.
Today, iZettle announced that they will now support Star Micronics’ range of MFI certified desktop and mobile printers. This allows their users to connect wirelessly to cash drawers and printers. Which in turn makes iZettle into an almost complete POS solution for small to medium enterprises. For those of you that do not analyze POS and printer manufacturers on the daily basis, Star Micronics is well known for being the supplier of choice for Apple stores worldwide.
The VISA issue was one of the biggest hurdles for iZettle in Finland and pretty much everywhere else. They were unable to allow VISA transactions (For several reasons as outlined by VISA Europe) and since it is the major credit card brand in the country, many of the vendors were simply not motivated enough to use iZettle. They did try to solve the problem by introducing "a solution", however it was more of a hassle than a real solution.
Today, iZettle announced that they are introducing a new device based on Chip & Pin technology that will accept all major cards, including VISA. The Financial Supervisory Authority regulates iZettle and its services, which are EMV (Europay, MasterCard and Visa) and it approved and confirmed compliance with the Payment Card Industry Data Security Standard (PCI DSS).The way the device is going to work is by connecting to your smartphone or tablet via bluetooth, where the customer can then insert his or her card. The payment is then processed on the screen.
iZettle, the European credit card reader for smartphones, is now officially out of beta and commercially available in Denmark, Finland and Norway - meaning the device can now be purchased in the iZettle website instead of being sent to you for free. The device will cost €24 (excluding VAT) but iZettle lets you earn that money back through a voucher that eats into iZettle's service fees for the same amount. iZettle charges 2.75% for each transaction.
The Swedish payments company has also seemed to find a workaround for it's issue with Visa credit cards. iZettle is EMV (Europay, MasterCard and Visa) approved, and compliant with the Payment Card Industry Data Security Standard (PCI DSS), but Visa has been giving them trouble in the recent months, first not allowing iZettle to process their cards, but has nowtacked on more rules for when they accept payments.
iZettle announced on their website that American Express coming on board as an investor. This makes it the second credit card company to participate in the Series B funding round along with Mastercard. We covered the bulk of their series B funding last June, which included investments from Greylock Partners, Northzone, SEB Private Equity, as well as their series A investors Index Ventures and Creandum.
In the past, American Express charged nearly 1% more per transaction than iZettle's other supported credit card companies. But now in Finland, they charge a flat 2.75% for all supported cards.
We're super excited to announce more speakers to Arctic15. Our new bunch of speakers include representatives from organisations such as Airbnb, iZettle, Accel Partners, Jolla Mobile and Startup Sauna. We've still got about 20 more speakers to come which include the representatives from the 15 finalists.
Earlier this week iZettle sent out e-mails to their users in Denmark, Finland and Norway that Visa Europe has cancelled their contract in those countries. Since then iZettle has been working on restoring the status of that contract so that it could continue to accept payments with Visa cards in those countries. The story has multiple weird twists, such as why hasn't Visa Europe cancelled the contract in Sweden which is iZettle's home market?
On Monday's blog post iZettle has not commented on the specifics of the agreement and why Visa Europe decided to cancel it. Since then we have learned that it has to do with Visa Europe's policies regarding security standards. Then again, this is where the story gets harder to understand.
iZettle, the Swedish maker of chip card readers for iPhones and iPads, announces today it has received €25 million in Series B funding. The round was led by Greylock Partners and Northzone. MasterCard, SEB Private Equity and Series A investors Index Ventures and Creandum are also participating in the round. The chip card reader is now being tested in the UK after being available in Sweden, Norway, Finland, and will apparently use the funds for expansion.
Whith the funds, iZettle is looking at the European and world markets, wherever chip-card readers are standard. This targets the company away from the U.S., where a similar company, Square, is located. Currently iZettle has 50,000 users across the Nordics and the UK.
New startup solutions are becoming a big part of offline retail, providing real world impact in how we shop and make money offline. Take for example this recent news that we missed while it was fresh, but still is noteworthy: Estonian provider of business software, Erply, and Paypal have partnered to bring a seamless mobile payment solution to stores under Erply's LikePOS. The solution allows customers to simply "check in" to a store when entering, then pay with Paypal at the checkout counter. It's an innovation that's quick and easy for consumers, and it provides retailers more insight into their customers and their shopping experiences.
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.
iZettle, the Swedish payment app and credit card chip reader, announces today it has dropped their €0.15 fee per transaction. Now to receive payments, users must only pay a 2.75% charge for MasterCard, Visa, or Diners Club card payments, or 3.75% for American Express.
This dropping of a transaction fee brings iZettle nearly on par with Square, the similar American service for credit cards without the security chip, which only charges 2.75% per transaction for all major credit cards. The two companies operate in different markets (iZettle supports the higher credit card security features used in Europe), but the dropping of the transaction charge signifies iZettle has matured to a similar level. iZettle has more than 50 000 users in Sweden, Denmark, Norway, and Finland.
ArcticEvening Stockholm was held last night at the Hub Stockholm, where around a hundred people from the startup scene gathered to talk about startups, growth and everything else. The guests on the panel included Carl Waldekranz (Tictail), Peder Stahle (iZettle) and Hjalmar Winbladh (Wrapp). I have to say that this was most probably the easiest panel I've held in a while - the reason was simple; these gents know their stuff. It made me think though, looking at all the successful companies in the room, what is it that Sweden has that Finland doesn't?
Our second ArcticEvening of the year will be held in Stockholm on the 29th of March. The theme of the event will be the future of commerce and to make it all the more exciting, we have three fantastic Swedish companies at the event to share their views. We'll be having a panel discussion with Klarna, Wrapp and iZettle to talk about how they see the commerce changing and evolving through technology, but also how consumers are changing their behaviour.
iZettle has announced that they will begin their Nordic launch tomorrow, and will be releasing 5000 devices in Denmark, Norway, and Finland, each, for beta testing. If you haven't seen our previous coverage, iZettle’s iPhone and iPad app lets anyone take credit or debit card payments on the go, with or without iZettle’s chip-card reader.
The company offers a service similar to the US-based competitor, Square, although Square is built for magnetic strip cards and plugs into the headphone jack. The device has already been beta testing in Sweden since November, a month after the company raised €8.2M in venture funding. We've already gotten our hands on the device, and will be releasing a more detailed review later this week.
The third annual European Tech Startup Awards (Europas) were held in London last night. Quite a few Nordic and Baltic startups made the list of finalists in several categories again this year and over 40 000 public votes were cast to aid the advisory board in selecting the winners.
Nordic/Baltic highlights from this year's awards included iZettle (winner of Best Commerce, Finance or Payments Startup), Podio (winner of Best Business or Enterprise Startup) and Endomondo (winner of Best Sports, Leisure or Health Startup). Rovio's flock of Angry Birds took home The Europas Hero Award for "kicking ass globally from Europe". Alexander Ljung and Eric Wahlforss of SoundCloud (originally from Sweden) were also named the best founders/co-founders of the year. The Grand Prix Award went to UK-based Peer Index.
iZettle, the smartphone chip credit card reader and payment processer, is now out of beta and is offering its services to Swedish businesses and individuals that would like to accept credit card payments on the go. The device, which plugs into the data port of your iPhone, is given to users for no upfront costs. Somewhat unsurprisingly, the demand for iZettle’s card readers has exceeded their expectations but the company now guarantees that all registered users will have their card reader before Christmas. Only last month the startup received €8.2 million in venture funding.
While there are no upfront costs for using the service, they do take 2.75% of a sale, plus a €0.16 transaction fee. In comparison, Square, the similar U.S. service that plugs into an iPhone's audio jack, charges only 2.75% of a sale. iZettle is Europay, MasterCard and VISA approved, and compliant with the Payment Card Industry Data Security Standard (PCI-DSS). No sensitive data is ever stored on the mobile device or iZettle reader, and all data traffic is encrypted.
Ben Holmes has been a partner at Index Ventures since 2002, and has been heavily involved with Index's investments in Europe. In the Nordic region he currently sits on the boards of Gray Area Labs, Just-Eat, Rebtel, and Stardoll, as well as Mind Candy, Netlog, Notonthehighstreet, Shapeways in the UK.
He spoke with us to promote their newly announced €500 million growth fund, which will invest in emerging leaders with international ambitions. Below are the notes from the interview:
iZettle, a Sweden based company looking to crack the social payment problem, has closed an 8.2M euro investment from Index Ventures, Creandum and Charles Dunstone, CEO and Co-founder of The Carphone Warehouse. The round was lead by Index Ventures. iZettle's solution is very similar to that of the US leader's in this space, Square. They have an iOS app that users are able to download for free and then use that app, together with a small chip-card reader, to accept and pay for goods and services with your credit card.