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There’s been much excitement in the world of mobile payments around Square, a credit card reader that allows merchants to take payments using an iPad or iPhone.

More than 1m businesses have signed up to use the device in the US, but it still isn't available in the UK.

However, as of this morning UK retailers can apply to join the beta phase for iZettle, a mobile card reader backed by Carphone Warehouse founder Charles Dunstone.

It already has 50,000 users in the Nordic market since launching in its native Sweden last September, increasing the number of point of sales terminals on the region by 10%.

CEO Jacob de Geer said he initially began working on the design in 2010 to help his wife’s business take card payments.

The problem with chip and PIN is that you can’t target a large part of the retail industry as the sign up fees are too expensive. Then you also have subscription and transaction fees.

Instead iZettle only charges transaction fees: 2.75% for MasterCard and Diner’s Club, or 2.95% for American Express.

The company is also talking to Visa about enabling its cards to work with the device. De Geer said there are 20m companies across Europe that only take cash or invoices, accounting for around 20-30% of the economy.

In the UK there are 1m point-of-sale machines but more than 10m iPhones.

It would therefore appear that there is a gap in the market for a mobile card reader, but that doesn’t mean iZettle’s UK launch is without its challenges.

The device uses signature confirmation rather than a PIN, and de Geer says that chip and PIN payments are more ingrained with UK consumers than they are in the rest of Europe.

We have to educate consumers so they know it is a safe process. No information is stored on the device, it simply acts as a modem and the payment is processed in the back end.

Furthermore, much of the focus in mobile payments has been on NFC, but de Geer says iZettle is a totally different solution. 

If you look at the number of NFC cards in the UK there’s still a long way to go until we see a consumer shift towards contactless payments.

He said iZettle isn’t designed to change consumer behaviour, but instead enables the 500m Europeans who currently have a bankcard to pay for goods in a different way. 

The success enjoyed by Square in the US certainly suggests that iZettle should catch on with consumers in the UK but that also means it probably won’t be long before it faces competition from other mobile card readers.

We are the first to launch here, but due to the size of the opportunity we expect there to be other products on the market soon. But that’s not something we are worried about.

To participate in iZettle’s beta programme you can download the app from the Apple App Store and request an invitation or sign-up via iZettle’s UK website. It has 3,000 mini chip-card readers to give away.

David Moth

Published 16 May, 2012 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

1686 more posts from this author

Comments (3)

Nico Koepke

Nico Koepke, CEO at KODIME LtdSmall Business

Great solution (what I have seen from Square so far), and this could be seriously disruptive to the traditional chain of hardware/software merchants in retail and small biz.

Another great example of the iPhone engine being used for a business scenario that probably even Steve Jobs didn't contemplate at the time!


over 4 years ago


Rye Campbell

I'm going to pass up on this. Firstly because I am a droid user and secondly because I prefer mPowa (www.mpowa.com). But as a small business owner I am happy that mobile card readers are now going to be available in Europe. Excited to see how this is going to pan out.

over 4 years ago



yes,it is really useful for small business.And the transfer fee it is more smaller than tranditional payment method.

almost 4 years ago

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