iZettle: Contactless Payments Are All About Adding Simplicity

Of all the industries that have benefited from the surge in mobile technology over the past decade, it’s fair to say that the retail and service sectors have been among those leading the way.

Where previously shoppers had to travel to a bricks-and-mortar store for their purchases, online and mobile shopping has given consumers far more flexibility and choice regarding their desired products, with contactless and Near Field Communication (NFC) payments providing a quick and easy way to pay.

But how do you stay on top of a quickly-evolving industry like this? Jens Münch, vice president of strategic partnerships at iZettle, told TechWeekEurope that simplicity is the key.

Simple innovation

In many ways, iZettle’s products could be the key to breaking down the last barriers to retailers having to turn away customers as they only accept cash.

“What we do is build innovation for merchants, we enable them to take any form of payment to run their business and make more money,” he told us at a meeting in London last week. “It’s all about adding simplicity.”

Formed in 2010, the Swedish company, which employs 15 of its 200-strong global workforce in London, has grown steadily to now process over $2 billion across 11 markets each year.

iZettle has several products which it says will help small businesses grow and expand by giving them a cheap and easy way to accept not just card payments, but now contactless payments as well.

Released last month, the company’s Card Reader Pro Contactless (pictured left) costs just £79 and allows businesses to enable contactless payment systems, including Apple Pay, giving them a quick and easy method to deal with customers.

The card reader is compatible with all major credit and debit cards including MasterCard, Visa and American Express, and can even accept payments from wearable devices.

There are no set up costs or additional hidden fees, with merchants simply paying 2.75 percent of each transaction – a figure which comes down to 1.5 percent at a high sales volume. Münch believes this can help set iZettle apart from competitors such as Square and Amazon.

“There’s a huge fragmentation in the ecosystem, and what we’re trying to do here is create a simple overlay so that you can feel confident that your business,” he says.

Noting that the company was looking to target those businesses that were disenfranchised from the payment space and had no other option, Münch reveals that there was such a great demand, even from larger merchants, noting that “that we wanted to give them a structure where they could also be operational.”

Moving forward

iZettle’s terminals are remarkably simple to set up as they only need to be paired with a smartphone or tablet. Asides from the obvious cost savings (with traditional tills and point of sale (POS) terminals costing around £4000-5000), iZettle also provide a huge leap forward in terms of technology.

Older card terminals, which are still in use at many stores, often include parts found in an archaic mobile phone, and an outdated printer. Münch (pictured left) notes that in this modern day and age, you only need the basics.

“What we’ve done is pull that apart,” he says. “Everyone has a mobile phone anyway…and nobody really needs printing anymore – what you really need is the bare bones in this machine.”

iZettle’s terminals run off the CPU in the paired mobile device, making them significantly faster than their older rivals, which often run off old GPRS networks,whereas a paired iPad, for example, sports not just 4G connectivity but a quicker processor.

“We’re doing as little as possible here and as much as possible in the cloud,” Münch adds, noting that this includes security. Each transaction is encrypted multiple times using cryptograms which mean that your card details are never fully visible to anyone until it reaches your bank.

All change

It seems to be then, a foolproof model – saving money, space, and time. But the company is still getting there in terms of market penetration, and it may take a while yet.

“Changes in this industry take maybe two, three times longer than you see online,” he says. “If you look at e-commerce in the first ten years, or between 2000-2015, those were the brightest and earliest adopters of new technology, so of course they are going to go into analytics and understand the data behind their business.

“I think that this is just taking a bit longer in the real world – you need to sit people down and have a real conversation, saying ‘You shouldn’t be using those old calculators, you should take the iPad you have at home and use that’.”

The readers can also provide useful business intelligence and analytics tools, Münch says, demonstrating how their input can help track what items are the most popular, and which aren’t bringing in enough income – crucial pieces of knowledge for a fledgling business.

“Enterprises get it – for them it’s a matter of risk, a matter of updating a huge amount of real estate, and training all their staff…but we are the smaller merchant’s best friend,” he says.

“I think if we make it intuitive enough, and make it obvious, then it won’t take this. We don’t have a young audience really – we have small businesses who over the last 24 months have seen that people will just walk away if they don’t have cash.”

Having seen a demo of the new contactless reader, which allows a cafe customer to quickly pay for food and drinks using a contactless card or even NFC technology found in the Apple Watch, it seems clear that many businesses could benefit from iZettle’s technology.

Münch agrees, adding that “there’s a lot more to come…a lot more bells and whistles” in future releases, including accounting capabilities that let companies manage their finances, as well as expanding to a “few more markets” this year.

Ultimately, the company is helping to make payments, and commerce, exciting and interesting, with Münch hoping that iZettle readers will soon be a common sight in many shops.

“There’s so much innovation happening on the consumer side,” he says. “We think it should be exciting on the receiving side too!”

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