iZettle, the European credit card reader for smartphones, is now officially out of beta and commercially available in Denmark, Finland and Norway – meaning the device can now be purchased in the iZettle website instead of being sent to you for free. The device will cost €24 (excluding VAT) but iZettle lets you earn that money back through a voucher that eats into iZettle’s service fees for the same amount. iZettle charges 2.75% for each transaction.
The Swedish payments company has also seemed to find a workaround for it’s issue with Visa credit cards. iZettle is EMV (Europay, MasterCard and Visa) approved, and compliant with the Payment Card Industry Data Security Standard (PCI DSS), but Visa has been giving them trouble in the recent months, first not allowing iZettle to process their cards, but has nowtacked on more rules for when they accept payments.
For Visa cards, instead of using the chip card reader you let your customer type their phone number into your iZettle app. Once they have done so, they will receive a text message leading them to a webpage where they can securely enter their credit card details. Once the transaction goes through, you receive a message on your iZettle app.
It’s not the best process in the world, but at least it means Visa payments can be accepted. Here in Finland it seems like everyone at least has a Visa debit card issued through their bank, so iZettle was somewhat useless during the hiatus when Visa was no longer accepted.
It’s not clear exactly why Visa decided not to work with iZettle, but perhaps it is noteworthy that Visa has invested in Square, iZettle’s American mobile payment competitor. iZettle is funded by MasterCard and American Express, as well as Index Ventures, Creandum, Greylock Partners, Northzone, and SEB Private Equity.
“We are seeing huge demand for our service throughout the Nordics,” said Jacob de Geer, CEO and co-founder of iZettle. “And with the holidays right around the corner we’re very happy to have resolved the Visa situation. For now, Visa transactions in Denmark, Finland and Norway will be done on the cardholders phone, as Visa Europe prefers. But most important for us we’ve restored Visa acceptance for our small business users and individuals there”