Merchant Innovation

Will EMV Tempt iZettle To Enter The US Market?

One might think that iZettle gets tired of being called the “European version of Square.”  Sure—they are both leading mobile point of sale systems that bring the wonders of credit card acceptance to small businesses, but the comparisons are seemingly unending. Running a Google News search of the term “iZettle” on August 11th 2014 pulls up 10 stories in English. Of those stories, eight mention references to Square, and three actually refer to Square in the headline.

Although a more abrasive, aggressive or, well, frankly American company might pound its metaphorical chest, and demand to be recognized as the amazing and disruptive innovator that they truly are, iZettle’s CEO and founder Jacob de Geer is somewhat more laid back by nature.

Perhaps it is the ever present sunlight in Stockholm at this time of year, perhaps it is having regular access to fjords or being in the place where the Noble Peace Price is handed out—but when asked by PYMNTS CEO Karen Webster if his company ever gets tired of being compared to Square, or if he thought there were a better analog out there on the market—de Geer only had nice things to say about his American rivals.

(Listen Here) “Well actually we don’t mind the Square analogy I must say. We are obviously impressed with what Square has done in the last couple of years and we find them extremely informative in many ways. For us, we are still sticking to the core of card payments and we haven’t gone down the road of trying out so many different things as Square seems to be doing.”

de Geer says that as a European company they regularly deal with European venture capitalists, who don’t quite share their American counterparts enthusiasm for writing large checks and seeing what happens. As a result, European firms have to be a little more careful with their funding, as they are often dealing with smaller amounts and so must be more focused to prove a return on their investment.

And so while Square has sought to take on the world with a line of products and services that seems to be ever revising and expanding—iZettle has sought to take on the world in a somewhat more literal fashion—through expanding its mPos system throughout continental Europe, the U.K and, most recently, in Brazil. iZettle has expanded now to 10 countries.

(Listen Here) “We are definitely and clearly the European leader in mobile payments and that’s a nice things after a couple of years and we can also say that we have made quite a mark in the Brazilian markets where we estimate we have about 40 percent after the first year of the mPOS market in Brazil.”

With all the success in expansion, however, de Geer was not willing to go out on a limb and call his company “successful”, noting instead that they are moving in the right direction.

Could  that right direction be toward the United States? That remains to be seen. iZettle’s long term position on the subject has been they were uninterested in the U.S. market, because it is too crowded. .

Instead, the company has sought to take on the rest of the world, where its advantage in enabling payment via EMV—both chip and signature and chip and PIN—is more directly relevant. Starting in Europe meant that iZettle had to perfect that capability and business model from the start.

Businesses change their minds however, and marketplaces change. The U.S. is changing to an EMV system as we speak—and doing so in a fashion that de Geer’s sees as another step in the right direction.

(Listen Here) “I think The U.S. has actually learned lots from the European experience. The fact that you are entering into an EMV solution without PIN is pretty much in line with what we’ve been saying all along. All the way back in 2007 we were saying in the European market is that the holy grail of EMV is the chip primarily and not the PIN. So I think that’s a very good lesson learned and the fact that you’re going to market with that is a good first step.”

Is that first step enough to encourage iZettle into making one of its own into the U.S. de Geer rules nothing out, but said even though EMV makes it more tempting, the immediate plans do not call for U.S. expansion.

(Listen Here) “I think the fact that the U.S. finally seems to be going down the EMV road…I think that’s a very good indication that something is actually happening.”

He further noted that it is uniquely well positioned to tap into an EMV compliant U.S.

(Listen Here) “Square is going to market with more less the exact same type of device we’ve been working with for the last couple of years. So from that perspective maybe I mean maybe we should reconsider whether to address the U.S. or not.”

Ultimately however de Geer thinks technology shifts take time, meaning the issue of U.S, expansion is on the table, but not exactly pressing.

“I don’t’ really see anything drastic happening in the U.S. in the next couple of months or so, so I still think we have time to consider our options.”

de Geer did note however, that EMV has made the U.S. a more interesting option.

We’ll just have to wait and see whether European’s Square takes on American’s Square in the U.S.



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