iZettle

File:IZettle chip and PIN payment terminal.jpeg

iZettle chip and PIN payment terminal and an iPhone 5, showing a payment being made.

iZettle is a mobile payments company based in Stockholm, Sweden and markets a single application and service called iZettle. Jacob de Geer and Magnus Nilsson founded the company in April 2010 and launched its first app and service in 2011.

The iZettle app and card readers allow individuals and small businesses in Sweden, Finland, Denmark, Norway, United Kingdom, Germany, France, Spain, Italy, Portugal, the Netherlands, Mexico and Brazil, to accept card payments on their iOS or Android smartphone or tablet. The iZettle app supports both chip cards and magnetic stripe cards through the iZettle EMV-approved card readers through two plastic devices which either plug into the audio jack or connects wirelessly via Bluetooth to supported smartphones and tablets. The app’s interface resembles that of a traditional cash register.

iZettle was one of the first companies to develop a chip-card reader and app for smartphone-based mobile commerce which meets international security requirements.

iZettle Products

iZettle’s EMV-approved mobile payment solution allows small traders to take credit card payments, with a payment system integrated directly into an app, for a flat commission of 2.75%. In 2013, iZettle upgraded its system to include a Chip & Pin device alongside its previous model, allowing it to accept all major credit cards including MasterCard, American Express, and Visa.

Merchants use the service by downloading the app and by plugging an iZettle card reader into an iOS or Android device. With iZettle’s free management software tool iZettle merchants can analyze credit card transactions and relay detailed information, i.e. top selling products and average payment volume.

iZettle launched its first SDK (software development kit) in January 2014. The SDK kit provides developers with the ability to add payment services to their mobile apps. It can be used in any of the nine countries iZettle is currently live in, allowing for users to take payments via the app from iZettle’s Chip and Pin reader, and return relevant information to the software to generate receipts.

iZettle’s solution achieved a MasterCard Best Practices certification in February 2013.

In February 2015, iZettle has introduced Lite Reader, a new card reader which it will offer to merchants free of charge, can be used directly by plugging into the audio jack of iPhone, iPad or any Android device.

History

Creation

Jacob de Geer and Magnus Nilsson founded iZettle in April 2010 and launched its first app and chip card reader in 2011. The name “iZettle” derives from the expression “settling a debt.” The founders wanted a name that described what the company would do. They decided on a stylized combination of the words “I” and “Settle.”

iZettle is Jacob de Geer’s fourth start-up. He was the first employee of TradeDoubler in 1999 and Ameibo and Tre Kronor Media in 2007.

Growth

iZettle launched its dongle-based mobile applications app for iOS in Sweden August 2011 to meet the local demands of a market dominated by smart card technology. The app worked initially with a Chip & Signature Card Reader. The company launched the full version of the service in Sweden later that year. Soon after launching, iZettle was listed as one of Tech Europe’s Pick of Stockholm Start-ups.

iZettle became available for Android devices in August 2012, making the system available to non-iOS users.

iZettle became Visa compatible in November 2012 when it added a new form of mobile payment to its list of services. Instead of using a chip-based reader, Visa customers entered the information manually onto a form, verified by their phone number. Due to a policy decision in August 2012 Visa was shut down in Europe. Visa acceptance was restored in Denmark, Finland and Norway in November 2012. To accept Visa payments in Denmark, Finland and Norway, iZettle had to introduce a third party option. Instead of using a chip-based card reader, Visa customers enter their phone number in the iZettle app on the merchants' phone and will then, via a text message, be directed to a secure site on their own smartphone where they can input their card details in a form. The customer gets an onscreen confirmation if the payment is accepted and the merchant receives a notification in the app that the sale has gone through. The company replaced the roundabout method in February 2013 by introducing a new wireless Chip & Pin reading device more convenient for VISA customers. This company entered a partnership with Banco Santander in February 2013, the Eurozone’s largest bank by market capitalization, who would invest more than €5M in iZettle in June 2013, giving the company access to Santander’s customers in the UK, Spain, Mexico and Brazil.

As final proof of support, Visa signed iZettle to its Visa Ready Program in June 2013, giving the startup access to tools for further developing mag stripe and mobile acceptance systems.

Financial

iZettle raised $11.2 Million in Series A Funding in October 2011, led by Index Ventures and Creandum.

In May 2012, the company removed its fixed €0.15 transaction fee in favor of a flat 2.75% charge on sales for credit cards including American Express.

In 2012, iZettle received $31.6M in Series B funding from investors including MasterCard, SEB Private Equity, American Express, Northzone, and Series A funders Index Ventures and Creandum. The purpose of this funding is to introduce iZettle to additional European and International markets where chip cards are the standard.

In May 2014, iZettle received $55.5 million in Series C funding from investors including Zouk Capital, Dawn Capital and Intel Capital, as well as previous investors Creandum, Greylock, Index, Northzone and SEB.

Areas served

iZettle serves individuals and small businesses in nine countries including Scandinavia, parts of Europe, the United Kingdom, Mexico and Brazil.

In 2012, the company expanded into the United Kingdom, Germany, and Spain corresponding to the launch of its new Chip & Sign system and partnership with MasterCard, American Express, and Diner’s. The pilot program began in Great Britain with iZettle offering 3,000 free mini card readers to British merchant testers.

The company launched its card service in Mexico in June 2013 and in Brazil in August 2013, marking the first time the company has operated outside of Europe.

Technology

iZettle’s technology converts smartphones into credit-card processors with the help of Chip & Pin and Chip & Signature card readers. With the system, credit card information isn’t stored over the phone, but is processed through iZettle’s encrypted connection. The phone operates as a secure modem. After a transaction is completed, buyers can choose to have a receipt and photograph of what they purchased e-mailed to them.

iZettle applications and services are compatible with Swedish FSA regulations.

External links

• Company Website

• https://www.izettle.com/gb/blog/111264793941/say-hello-to-card-reader-lite
• Sundar Kumar JVS (17 February 2015) To Grow Merchant Customers, iZettle Slashes The Cost Of Its Card Readers To Zero, Techcrunch, Retrieved ( 24 February 2015)