HOT COMPANY PROFILE: mobile payments company iZettle

CEO and co founder Jacob de Geer

Last year was a great year for Stockholm based mobile payment company iZettle who launched Europe’s answer to Square in November. Quickly establishing itself in the Swedish market, its mobile payment technology has enjoyed rapid adoption. The company also raised $11 million of first round funding in a round led by Index Ventures, presumably with plans to expand abroad. The business is standing in great stead for the future and has big plans for 2012. In a recent conversation, iZettle’s CEO and co-founder Jacob de Geer gives PaymentEye an insight into the company’s outlook and mentions some exciting announcements.

  • What would you say is the hottest trend in payments right now?

It depends where you are but mobile payments is finally happening and not in the sense that people expected it to. What we and Square offer is simply traditional card payments with different hardware. I think iZettle and Square are extremely hot in payments due to the fact that we show what you can leverage from the infrastructure out there. When we started in Sweden there were roughly a total of 170,000 card acceptance places in the country, that’s everything from parking metres to McDonalds and H&M and what have you. Four months since our launch in November 2011 and we’ve increased the number of card acceptance places in the country by roughly 15% in a market that’s been extremely flat for the last couple of years. It’s the same everywhere, in the UK alone you have roughly 1 million card acceptance places whereas you have 12 million iPhones. Bridging that gap provides huge potential for the industry and also people in general because in the end what we do and what we provide really makes a difference to small businesses in their day to day work.

  • What differentiates iZettle from Square?

 The biggest difference is that we are still the only EMV and chip compliant solution for mobile payments out there. Square is mag stripe whilst we only take chip card transactions; furthermore we are completely encrypted and certified according to EMV regulations.

  • Where exactly and how is sensitive card data stored?

The beauty of EMV and chip technology is that when you enter the card into our device none of the information on that chip ever touches the phone; everything is sent encrypted all the way to the bank back end and then encrypted back up and displayed in the phone. The phone is basically a stupid modem. It’s all controlled by PCI and the PCI compliant environments by which we abide.

  • How long does it take for the funds to hit the account?

One working day.

  • What is your policy on NFC?

We find NFC interesting. In the short term from our perspective its way over hyped and will not deliver like all new technologies. In the long run I think there are great advantages, especially for merchants. Given the card networks have put so much money and effort into it it’s bound to happen, whether it’s going to be successful or not time will tell. A shift in consumer behaviour takes time and it’s difficult to see the outcome. If you look at developed NFC markets such as Australia people are really excited about it from several perspectives, whilst on the other hand people like as Keith Rabois and Square say it should stand for Not For Commerce! We’re more positive than that and are actually considering NFC for our solution – I think it’s quite interesting and the fact that we are EMV certified gives us the opportunity since it runs on the same kind of contraption we are already compliant with.

  • What is the biggest challenge you face at the moment?

Actually right now one of our biggest challenges is how to focus on handling the demand from banks and acquiring banks, the card networks, the telecoms and everyone that wants us to move into their particular market with this solution. Balancing expectations with regards to expansion and how fast you can actually move is the biggest challenge we face at the moment. And then of course continuing to maintain our core product, which is payments made easy for everyone and democratising card payments. Everyone is shouting and screaming wanting us to listen to them which is fantastic but it takes focus to deliver.

  • Will you be expanding outside of Sweden this year? 

We are launching Tuesday 28th February in three new markets: Norway, Denmark and Finland. Whether it’s Norway or the UK the workload and challenges are still the same, the reason why we are moving into neighbouring markets is really that before we go into the UK, which is the logical next step for us, we have to be certain that it’s going to work. Expanding abroad is a pretty complex system due to different currencies, languages, and rules and regulations such the FSA – we have to be certain our strategy is going to work before approaching the UK market of 62 million people.

  • Will you be in the UK by the end of the year?

Much sooner than that because we have also just appointed Stewart Roberts, former Global Director of Innovation at Barclaycard, as our new Managing Director in the UK. Stewart has a fantastic track record and a very solid background in the payment industry. He knows the industry well but isn’t the most conservative person which is incremental to the success and future development of the payment industry. It’s therefore a fantastic start for us and I’m expecting a UK launch much earlier than the end of the year, a few months.


IZettle’s future looks bright and their plan to be in the UK in the next few months is particularly exciting, especially for many small businesses who will be keen to get their hands on the solution before the Olympics. Apprehension is however clearly expected from mPowa who are also due for a UK launch soon. De Geer doesn’t seem particularly fazed by the UK competition as mPowa seem to be offering a mag stripe solution in an EMV market. De Geer says he’s interested to see how the industry reacts to a mag stripe solution in Europe but “doesn’t think it will be overwhelmingly positive.” IZettle will be available for iPhone and iPad in open beta in Norway, Sweden and Denmark Tuesday 28th February and the company is offering 5,000 free chip card readers per country. IZettle charges 2.75% of the sale plus €0.16 per transaction.

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