iZettle is launching a free version of its card reader in an attempt to take the ‘final hurdle’ out of card payment acceptance for small businesses.
The new reader is aimed at small businesses that don’t take many – or any – card transactions, and are therefore reluctant to shell out for iZettle’s classic black card reader. Offering a free reader will hit the company’s margins, leaving it reliant on transaction fees of between 1.5 per cent and 2.75 per cent. But the company seems to think the gamble a necessary one to win over the 20 million small businesses in Europe that do not take card payments.
The Lite reader will first be released in the U.K., Sweden, Norway, Denmark, Finland, Spain, Germany and the Netherlands, with a South American roll-out expected to follow.
The Lite will not be wireless, unlike the existing $75 iZettle reader, and will plug into an iPhone, iPad or Android device through the audio socket, like the free dongles initially released when iZettle first launched. iZettle has cut costs even further by working with third parties to design the hardware, TechCrunch reported.
The new reader will also work a little more slowly than the paid for service, and iZettle may be hoping that new merchants will pay the $75 for an upgrade once they start seeing larger transaction volumes.
An overwhelming majority of consumers prefer cards to cash, and the value of payments made with cards in Europe was 40 per cent higher in 2013 compared with 2009. Visa Europe recently predicted that in the U.K., 95 per cent of payments will be made with cards within ten years.
European startups Payleven and SumUp continue to compete with iZettle, and Square is eyeing expansion outside the US. iZettle claims to have doubled transaction volumes in 2014 to €2 billion, with “hundreds of thousands” of businesses using its platform in Europe and Latin America. By positioning itself as the cheapest and easiest option in the market, the company could build on this lead by encourage those merchants reluctant to take card payments to finally get on board.
Whitepapers
Related reading
2020 hailed “year of contactless” by payments study
By Richard Young The coronavirus crisis has caused a surge in mobile and contactless payments, driving consumers to make fewer but larger ... read more
Redefining remittances: Fintechs during coronavirus
By Daumantas Dvilinskas, CEO and co-founder, TransferGo According to new projections by the World Bank, remittances are set to decline by as ... read more
Crypto’s safe-haven status wavers amidst market crash
Perceptions that cryptocurrency performs autonomously from other markets is being questioned as bitcoin crashed by 50 percent on March 12. Market participants ... read more
COVID-19: our action plan
Dear reader, As the coronavirus pandemic spreads, we continue to hear and read unsettling stories from around the globe. At Payment Eye, ... read more
