Earlier this week iZettle sent out e-mails to their users in Denmark, Finland and Norway that Visa Europe has cancelled their contract in those countries. Since then iZettle has been working on restoring the status of that contract so that it could continue to accept payments with Visa cards in those countries. The story has multiple weird twists, such as why hasn’t Visa Europe cancelled the contract in Sweden which is iZettle’s home market?
On Monday’s blog post iZettle has not commented on the specifics of the agreement and why Visa Europe decided to cancel it. Since then we have learned that it has to do with Visa Europe’s policies regarding security standards. Then again, this is where the story gets harder to understand.
Johan Bendz, the CMO of iZettle had the following to comment:
“It’s because of a policy decision by Visa Europe. For more specific reasons I’ll have to ask you to contact Visa Europe as we don’t fully understand their reasons. iZettle complies with the exact same security standards and requirements as other card terminals. We are EMV approved and comply with PCI DSS regulations, just as the card terminal in your local supermarket and we’re approved by FSA (Finansinspektionen). In just a few months time we have increased the card terminal market in the Nordics with approx 10 per cent, have had extremely positive feedback from users and well below industry average fraud rates. In addition, we’re working closely with MasterCard, American Express and Diners Club.”
While Bendz did not want to further speculate on the reasons why the blockade is affecting only certain markets, he reminded that “Visa Europe is a membership organization owned and controlled by European banks and each country is a separate entity.” This of course points the fingers at banks in Finland, Denmark and Norway.
As to when iZettle might be up and running again with its services, the company can’t promise anything. Despite the challenge, the iZettle has seen an enormous amount of support from its users, people using the service to pay as well as merchants. Earlier this week, Bendz tells us, the company received thousands of e-mails in support of it and wishing a quick restoration of Visa to their payment possibilities.
A user from Denmark has even started a petition that will be sent to Visa Europe demanding the restoration of its payment platform to iZettle.
Visa Europe is thus not the same company that has invested into Square, Visa Inc. They do have mutually beneficial interests in offering Visa in Europe though, but our guess is that the local banks have a tough time swallowing iZettle’s traction in their countries and have decided to take a time out to analyse the situation further. We’ll have to wait and see.