iZettle Launches Chip-and-PIN Mobile Card Reader, Resolving Visa Europe Impasse (Feb. 20, 2013)
Feb. 20, 2013
Sweden-based mobile payments player iZettle this week announced the launch of a new smartphone-based card reader for small-business merchants that uses chip-and-PIN technology and Bluetooth to accept all major card brands, resolving iZettle’s six-month impasse with Visa Europe over a security issue. iZettle in 2011 began offering its card reader to merchants across Scandinavia as competition heated up among rivals, including payleven, to equip European entrepreneurs with Square-like readers. MasterCard and several venture capital firms are among iZettle’s backers.
iZettle said it was forced to stop accepting Visa transactions beginning Aug. 1, 2012, when Visa Europe blocked processing of iZettle transactions in Denmark, Finland and Norway, apparently because its smartphone-based card reader did not comply with Visa’s security rules. iZettle’s card reader previously used an electronic signature to authenticate transactions instead of a PIN. The company’s new card reader, which works with a free iZettle app available for iOS or Android devices, connects wirelessly to a smartphone or tablet and accepts all major card brands, including Visa, according to iZettle. The reader sells for 49 euros (US$65) in Germany, Sweden, Norway, Finland and the U.K. Adding the PIN feature will “extend our target group of individuals and micro merchants to include businesses with higher transaction volumes,” noted iZettle CEO Jacob de Geer.
iZettle simultaneously announced a partnership with Banco Santander, which will help market iZettle’s card readers through its Innova program targeting self-employed professionals and micro-merchants. Bank customers who sign up for iZettle will receive a “substantial discount” on the card reader, iZettle said. Merchants pay a 2.75 percent processing fee with each iZettle transaction.
