When we wrote about iZettle’s partnership with Banco Santander, we mentioned that this is a big step for the company that will open doors to growth and expansion. Today, this is becoming a reality as iZettle announced its launch in Mexico today. Not a big deal, right? Wrong.
First of all, this is their first expansion outside of Europe, meaning that the company is on a path of growth in global markets. Strong presence in Mexico, the worlds 13th biggest economy, gives them the footing that the company needs to quickly spread across the Americas.
Then you need to consider the fact that this was done in a tight partnership with Banco Santander, the largest financial group in Spain and Latin America with a very strong presence in the US. Considering that Banco Santander is also a strategic investor in iZettle, it can be expected that they are going to help iZettle enter their strongest markets worldwide.
As Jacob de Geer, the co-founder and CEO of iZettle commented, “This is a very important day for us. Shifting from local to global operations in financial services in less than three years of operation is a major accomplishment from our perspective.”
The company also carefully considered the specifics of the market, as Chip & Pin is not common and magnetic stripe cards are still the norm.
To tackle the issue, iZettle teamed up with Thomas Sandell and his agency Sandell Sandberg to create a Chip & Magstripe card reader that will be sold at $499 (MXN) / EUR 29 in Mexico.
As de Geer told ArcticStartup, “iZettle’s Chip and PIN device is enabled by bluetooth technology. Chip and PIN is mandated by certain schemes in Europe. This is not the case in Mexico, where the majority of EMV cards issued are verified by signature only. This is the start of big change for Mexico, where accepting card payments has never before been an affordable option for new or small businesses.”
Senior Vice President at MasterCard Worldwide, Ricardo Ibarria also commented on the news: “Mexico has a great potential for growth in terms of card acceptance and the increasing use of smartphones is a great opportunity to expand the number of businesses that accept card payments.”
Mexico also has a very large street economy with a lot of individual vendors, shops and pop-up stores, who all want to allow more payment options. Combine that with the growth of card acceptance and you will realize that iZettle is entering the right market at just at the right moment.
This news also demonstrates that iZettle is getting ready to face their US based competitor Square, who have so far only launched in United States, Canada, and Japan. Considering that iZettle is already in eight countries with more to follow, it would not be too far fetched to expect them to enter Squares home turf, especially if iZettle is to continue partnering up with multinational corporations such as MasterCard and Banco Santander. At that point the real battle of mobile payments will commence. Too bad if credit cards will become obsolete in 5 to 10 years with advances in NFC and other creative payment solutions.