‘Europe’s Square’ iZettle Exits Beta In Nordics And Finds Workaround For Visa Acceptance

iZettle — often called the “Square of Europe” for being an early mover in its dongle-based mobile payment service for small merchants — is definitely getting down to business now. Today, the Swedish-based startup announced that it has finally exited its beta phase across the rest of its Nordic footprint of Denmark, Finland and Norway, including a launch of its Android service, and it has come up with a workaround to accept Visa payments in those markets once again, after a hiccup over payment security saw Visa withdraw acceptance over iZettle’s chip-based readers.

That means iZettle’s card readers are now available for anyone to use with and iOS or Android device — priced at €24 but free when users redeem a voucher to use the service — and users can accept any card over iZettle’s payment network — as long as users don’t mind bypassing the card reader to do it.

The news comes on three other big developments for iZettle in the last few weeks: an injection of cash from American Express; an official launch in the UK partnering with new 4G operator EE (itself a partner of key iZettle investor MasterCard), and a launch in Germany partnering with DZ Bank and T-Mobile owner Deutsche Telekom (also a direct partner of MasterCard’s, as well as part of the EE JV in the UK).

In all cases, iZettle takes a 2.75% commission on all card transactions.

iZettle describes the Visa workaround like this: instead of using the chip-based card reader, users will be directed, via a text message, to a secure site, where they type in their card details. Yes, it sounds a little cumbersome, especially compared to the zippy process of inserting a card, scrawling your name across a touchscreen, and being done with it all. “While it’s not our preferred solution, it is compliant with all Visa Europe’s regulations,” iZettle notes on its site.

But from what I understand, the Visa payment acceptance issue is still a work in progress and a further solution may come into play later. Payleven, the Rocket Internet-incubated competitor, has produced a separate device where users can enter their PINs to process card payments (last week Payleven signed up a German taxi firm for the first big trial of the service). While this is one option for iZettle, it takes longer to develop and produce these, so perhaps this is why that solution was not offered as a first alternative.

In the meantime, this move in the Nordics was an essential one for iZettle, which is now sitting on a decent amount of funding (€42.6 million), but has a lot of competitors breathing down its neck — Payleven is joined there by MPowa, Sum Up and others — yet for now still is in the clear in terms of Square or PayPal’s here coming into Europe and picking up users simply on brand recognition and financial heft.

The full blog post is below:

First of all, we’d like to send one enormous thank you to all our Nordic neighbours. These last few months, your patience, encouraging words and use of our service have kept us going through many long nights. Today, we’re over the moon to finally be able to bring some good news to you: We’re ready for an official launch in Denmark, Finland and Norway!

This launch means we have three pieces of good news to share:

• Now anyone can sign up and get their hands on a chip-card reader! Simply sign in to your portal to get an Original Chip-card Reader or an Audio Jack Reader for Android and iPhone 5.
• We’re finally releasing iZettle for Android in Denmark, Finland and Norway.
• As of right now, both old and new iZettlers will be able to take Visa payments! Check out the Help page to find out exactly how it works.
So please go ahead, download the app from the App Store or Google Play, get your very own chip-card reader and spread the word that now anyone can take card payments.

Thank you ever so much for your support.