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Summary:

With Square still out of the picture, Europe is becoming a battleground for its clones. And, fresh from an American Express cash boost, Sweden’s iZettle is taking on Germany’s Payleven on its own turf.

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Square is starting to take its first steps outside the U.S., but it’s still a way off from entering the European market. So on mainland Europe, certainly, we’re still looking at a war between Square’s clones: Sweden’s iZettle and Germany’s Payleven.

Having recently scored an investment from American Express, iZettle – already present in the Nordic countries and the UK – has just inked major deals for its German push. The company is partnering with both DZ Bank and the giant telco Deutsche Telekom, the latter of which will be pushing iZettle’s mobile payments gadgets in stores across the country.

“Strategically, Germany is one of our core markets, and we are committed to serving everyone from individuals to small businesses here long term,” iZettle CEO Jacob de Geer said in a statement.

“Our ambition is to become the undisputed market leader in Germany and given the partnerships with DZ BANK and Deutsche Telekom we believe we are very well positioned.”

Going for Germany make several kinds of sense. It’s a big market, for a start, but it’s also the home of Rocket Internet, the firm behind Payleven. This is an aggressive move, or is it?

iZettle is playing it coy on that point. “Germany has been on our radar for a long time and clearly we have established some strong partnerships there,” a spokeperson told me.

So let’s quickly look at the state of play here. iZettle is out in the UK, Sweden, Denmark, Finland, Norway and now Germany. Payleven is in Germany, of course, but also in Poland, Spain, Italy, the Netherlands and Brazil. Then there’s the UK-based mPowa, which recently signed a deal with South Africa’s First National Bank but is yet to tackle mainland Europe.

iZettle’s reader handles chip-and-PIN cards – Square’s does not, as they aren’t so big in the U.S., despite being more secure than magnetic-strip cards – but relies on signatures rather than PIN codes. Payleven’s product is (typically for Rocket) a close clone of Square’s. mPowa says it will offer full chip-and-PIN functionality.

But it’s really partnerships that are the key here. In mobile payments, a quick rollout will always benefit greatly from deals with banks and/or mobile carriers, as these established links in the value chain are keener than anyone to get involved in the new payments game.

“The cooperation with iZettle is a further step for Deutsche Telekom to strengthen the relevance of mobile payments in Germany and to position itself as a relevant player in the payment market,” Telekom innovation chief Thomas Kiessling said.

  1. Is it only targeted towards certain countries or is it also in USA, UK & other countries? http://peculiarblend.wordpress.com/

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  2. Reblogged this on MyRetailCloud Blog and commented:
    iZettle and PayLeven battle it out in the European market – where partnerships with banks and payment networks are key.

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  3. I’ve placed my bet on mPowa (www.mpowa.com). They have been steadily progressing. And I am happy with the service since I signed up!

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  4. However Izettle does still not handle VISA cards thus useless in the ~UK as most of my customers use only VISA cards…

    cheers elo

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  5. I have a business in UK and I just switched to mPowa (www.mpowa.com) and I am happy with it. I don’t think i would get iZettle. Unless every payment I’m going to take will be using a MasterCard. Their card support is limited to be used in a business (like mine) I’ll end up turning so many people away it won’t be worth getting out the iZettle each time just to put it away again. The app is very nice, especially the iPad version, but without good card support it’s nearly useless. Anyhow, congrats to them for expanding in EU.

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