Controversial

iZettle CEO On Its Big Apple Pay Play

Henry David Thoreau wrote that “It is remarkable how closely the history of the apple tree is connected with that of man.” Since the launch of Apple Pay last year, many have written how closely they believe that the history of payments will be connected with the launch of Apple Pay.

There’s no doubt that since Sept. 9, 2014 when Apple Pay launched, players from across the ecosystem – established and emerging – have been influenced by Apple’s entry into payments and have been working hard to carve out their piece of payments history influenced by its launch.

One such player is the Stockholm-based mobile point of sale pioneer, iZettle, who’s making news today with the launch of its Card Reader Pro Contactless. This new hardware integrates its Chip and PIN card mobile reader solution with out of the box support for contactless payments – including Apple Pay.

And that, Jacob de Geer, iZettle’s CEO and co-founder, told MPD CEO Karen Webster, in a way makes payments history, too, for the small merchant that wants to be able to accept payments any way that consumers want to pay.

“The launch will make iZettle the first company of its kind to offer small businesses support for Apple Pay and contactless payments,” he said.

iZettle’s contactless expansion will work for any contactless product – card and mobile enabled. And, while the launch of this product on June 1 is slated for the U.K. where, at least as of this writing, Apple Pay is still not rolled out, merchants who purchase Card Reader Pro Contactless will be ready when it is. So far, Apple Pay does not work for any card issued outside of the U.S. as Apple Pay’s business model has some difficulties exporting easily to foreign soil.

And, yes, Webster asked the obvious question and, no, we have no reason to believe that June 1 is correlated to any forthcoming announcement by Apple related to Apple Pay. The U.K. is a market in which contactless cards are widely penetrated and usage for small dollar purchases are quite strong. It is a market in which contactless cards are available and merchants, with Card Reader Pro Contactless, can now support.

"Since the advent of the smartphone, we have all been longing to move on from both cards and cash. We all imagine a world where wallets are left home, where a simple swipe of a phone or a watch is all that it takes,” de Geer said. “We’re now getting there. Contactless payments offer unparalleled ease-of-use for consumers, and vastly increased transaction speed for merchants."

A real world reality that de Geer told Webster is also now within the reach of the small merchant who wants to take advantage of the payments innovation as it evolves at a price point that they can afford.

"We’ve watched this marketspace pretty closely,” de Geer told Webster. “The reasons we haven’t launched it up till now is that this kind of hardware is a bit more costly compared to traditional hardware so we have been trying to figure out a way to give our merchants the advantage of the tech at a low price point. We’re also committed to continuing to make it well-suited for the mobile payment system and also not creating a system that is more cumbersome than the traditional one.” Merchants, in the U.K. at least, have the knowledge that there are lots of consumers running around with contactless cards that they can enable with the new iZettle device.

And, perhaps, unsurprisingly, de Geer is excited by the outcome of iZettle’s efforts.

"We think we nailed it, we found a great price point for the hardware (£79) – and we still keep our free Chip and PIN option available to all merchants. This combination is pretty beautiful."

De Geer told Webster that as Europe’s main mPOS player, he believes it’s incumbent on them to create a solution that is “beautiful,” especially given iZettle’s complete focus on the merchant and serving them well.

"We’re happy with the mPOS business. We never spent any time or money trying to convert the cardholder into a wallet user or anything else. We were only ever interested in merchant services."

A clarity of focus that de Geer believes also most clearly distinguishes iZettle from the U.S.-based firm it is most often compared to: Square. As Karen Webster recently noted – Square has recently pivoted (back) to being a pure merchant services player after spending the better part of four years working to attract consumers to its platform and create a new payments network.

Part of iZettle’s focus on merchant services was also rooted into the reality of scaling in a market as fragmented and regulatorily complex as Europe. iZettle’s competition in the markets it entered wasn’t other mPOS players or networks wanting to knit merchants and buyers together around an mPOS offering, but figuring out how to provide the same services built out across a variety of ever-so slightly different regulatory environments, which forces a complete and total restart in each and every country any player, iZettle included, wished to enter.

"The fundamental difference in the U.S. and Europe is that from a regulatory perspective Europe is much, much more complex,” de Geer said. “The effect of that is there are three European mPOS players, whereas in the U.S. there are a hundred."

Well more like 187, according to PYMNTS’ mPOS Tracker, but who’s really counting.

“We have found that scalability in Europe is the secret sauce and it is still pretty complicated and we were one of the few firms that has managed to crack it,” de Geer said.

iZettle is currently in 11 markets, including France, a new market that is also part of its announcement today. One market that iZettle is noticeably absent from is the U.S. market that de Geer has been pretty adamant about not entering given its highly competitive landscape.

When de Geer and iZettle entered Mexico in June 2013, Webster asked him whether then was the time to enter the U.S., given its EMV expertise and platform and the migration to EMV in the U.S. At the time, he was pretty non-committal.

With the launch of Card Reader Pro Contactless – and its ability to enable contactless payments, including Apple Pay, Webster asked him about his U.S. intentions once again.

The answer, this time, was a little less adamant, while still non-committal.

"The U.S. is looking more interesting for us,” de Geer noted. He further told Webster this has been especially true as the U.S. is moving toward EMV – something with which iZettle has long experience given its European roots.

“Today in the U.S., you guys are effectively getting a solution that we launched four or more years ago,” de Geer joked.

On a more serious note, he said that though he believes there are many things iZettle could offer U.S. merchants when it comes to mPOS, but he still needs to be convinced that he could enter the U.S. marketplace with something that the market really needs.

"We’d like to move into the U.S. – but there are so many players offering payments the question has always been, ‘How are we relevant?'” he said. “How do you address a market that is already saturated by similar services?"

Because, de Geer noted, as the mPOS business, specifically, and the mobile payments market in general are evolving, it is less about the payment itself, and more about the services that go with the payment. Today’s Apple Pay (and contactless) tie-in announcement is part of iZettle providing the next level service that is increasingly becoming a standard ingredient in the successful payments platform recipe – a robust suite of connected services that help the merchant expand their consumer base.

Today, de Geer says he is not yet ready to commit to whether iZettle is ready to make a move into the U.S. But, he notes, the Stockholm-based firm may be getting closer – and that it is becoming an ever more possible future play.

“I think we are moving into a position where we could actually consider it,” he said.

And be part of the history of payments, influenced by Apple Pay.

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Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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