It’s not different merely on the basis of functionality – although it communicates with the merchant’s iOS or Android device via Bluetooth, rather than by being plugged into it – but mainly because of the company behind it. Netherlands-based Adyen is already an entrenched online and mobile payments provider for multinationals such as KLM, Vodafone and Groupon.

European competitors such as iZettle and Payleven are going after small businesses and sole traders who would otherwise be unable to handle physical card payments. So is Adyen, but Shuttle is mostly aimed at bigger players.

And that means looking at the business from a different angle. Adyen, which already provides those familiar gray VeriFone point-of-sale devices, is pitching Shuttle as a way of bridging the online and real-world sales environments from a reporting perspective. For example, a customer may have used his or her card on the merchant’s website, giving the merchant useful background when the same card gets used in-store.

“Within our offering, it’s a true multichannel offering,” Adyen chief commercial officer Roelant Prins told me. “The companies that are looking to use this already use us for e-commerce. They already know the way we provide reporting, our back office and everything.”

Adyen is keen to push the cost-effectiveness of Shuttle as a POS tool – the device costs €99 ($129) and the service €10 a month, while traditional point-of-sale terminals cost many hundreds. But Prins also had an interesting point to make about the mobility aspect of the service:

“Look at the luxury merchant in Holland who is focused on getting rid of the till and taking a mobile approach. If you buy a €500 purse, you don’t want to queue up to make a payment.”

Adyen has apps and an API for Shuttle, and will also be white-labeling the EMV-compliant service for anyone who wants to resell it. This is partly a function of the fact that Adyen processes payments end-to-end – it does not have to rely on banking partners to do this.

So, what does this mean for the emerging mobile payments sector?

Square can breathe easy for now as, while Adyen operates globally, the Shuttle rollout is Europe-only – for now. But within Europe, things are about to get interesting.

Until now, it had looked like iZettle was shaping up to be the winner – the company has been scoring crucial partnerships with banks and telcos alike.

However, iZettle remains hampered by the fact that it cannot provide a full chip-and-PIN service for customers with Visa cards: a dispute with Visa led instead to a somewhat less-slick workaround. Shuttle is full chip-and-PIN for all cards, and Adyen’s existing customer base means it can hit the ground running.

This is a new market, and it may well prove to not be a matter of the winner taking all. But it’s just received a pretty big shakeup.

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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.

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Once again the company is relying on its partnership with local giant Telia, with the Swedish telco making the dongle available in its shops throughout the country. No word yet on when the Android version might hit other territories or when it might work with non-Samsung devices, but CEO Jacob de Geer suggests that both developments are on the way.

Nor does there seem to have been any movement in the company’s dispute with Visa Europe, after the card syndicate last month pulled support for iZettle in Denmark, Norway and Finland.

This is a significant step not just because it makes iZettle more broadly available, but because it demonstrates why it’s unfair to dismiss the business as little more than a clone of Square. The Silicon Valley darling has certainly developed some innovative technologies and paved the way for a lot of other businesses, and added Android support earlier this year. But it has shied away from the more complicated — and more technically demanding — international markets. Yes, it may have a lot of cash in the bank, but iZettle raised its own significant round of $31 million to expand. Yes, it may have done a lot of groundbreaking stuff with its card-free CardCase tab feature, but it’s limited to a single (albeit large) market.

It’s not just iZettle which is challenging Square here, either: the Samwer brothers are developing their own version, Payleven, and British outfit mPowa is also taking a crack at the same idea.

Even though Square’s recent deal with Starbucks may smooth the way for international rollout, each day that it waits one of its rivals inches forward a little.

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Until now the company, billed as Europe’s equivalent to Square, has so far only made its product — a free plug-in dongle and app that let small merchants accept card payments through their iPhone or iPad — available in Sweden, Norway, Denmark and Finland.

But as of Wednesday, it is offering 3,000 mini card readers to merchants in Britain, as part of a limited rollout in the United Kingdom.

“The U.K. is pretty special in Europe,” iZettle CEO Jacob de Geer told me ahead of the announcement. “We’re expecting the same kind of interest we’ve seen elsewhere… [but] it’s crucial for us to understand the difference in behavior between Britain and other parts of Europe.”

Anyone who wants to be part of the pilot can apply at iZettle’s U.K. website, although not everyone will necessarily be approved, because the company is trying ensure a spread of business types and locations.

IZettle has already gathered some 50,000 merchants across the Nordic region, but this will be its biggest test yet: by de Geer’s reckoning the market could be three or four times larger — perhaps even more.

“It’s just the fact that there are 60 million people in the U.K., while across the entire Nordics there are 20 million. If you break it down, there are 1.2 million point of sale devices already in the U.K., whereas in the Nordics there are 300,000. All the numbers are drastically higher.”

It’s the latest step forward from the Stockholm-based service, which has raised more than $16 million in funding from Creandum and Index, and has gathered more than 50,000 merchants since coming out of beta last November. Recently it dropped the fixed cost element of its pricing structure, and now relies purely on taking 2.75 percent of each sale — a move which simplifies costs and brings it into line with Square.

But although the hot San Francisco company has clearly paved the way for iZettle, there are some important differences between the two businesses. Unlike Square’s reader or PayPal’s equivalent, which both rely on using the magnetic strip on credit cards, iZettle can read cards with embedded chips — a higher security standard that is the norm in Europe and much of the rest of the world. This requires a much higher technical and regulatory burden.

Then, of course, there’s the issue of availability: Square has shown little interest in expanding outside the US, and even now PayPal is in the game, it has not dealt with the technological issues that it would need to broach to enter Europe.

There is one significant unknown, however: iZettle uses chip and signature, rather than the chip-and-PIN that is dominant in Britain. That doesn’t stop the service from working (signature is still a valid way of authorizing payments) but given that shoppers have been inculcated with the idea that punching numbers is more secure than signing, de Geer admits that it will be something of an experiment.

“That’s probably one of the most interesting things we’re expecting to see,” he says. “But our fraud rates in other markets are well below the industry average, partly because we’re approaching carpenters, plumbers, blacksmiths — and generally when you want to pay your plumber, if you’re happy with their work, you don’t hand over a stolen card… it’s a face-to-face transaction.”

If all goes well, the service could be rolled out on a wider basis in a few months, with more card types accepted (the pilot only covers MasterCard, Amex and Diner’s) and the possibility that of a distribution deal to get the device sold in a major high street chain. The company already has a similar deal in place with Swedish telco Telia, and counts Charles Dunstone — the founder of leading British retailer Carphone Warehouse — among its backers.

High street distribution would “not too far-fetched” said de Geer.

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According to Deutsche Startups, the Samwers are working on launching a new service called Zenpay which will be a copy of the hot Silicon Valley payment service.

According to information from the German-startups.de Rocket clone is named Zenpay, of which there are yet to see anything yet. Worldwide, the incubator is currently registered but the corresponding domains of the Square copy.

Details are scant, but senior names at Rocket Internet have registered a number of domains, including Zenpay.de, Zenpay.fr, Zenpay.it and more. In some cases the domains were bought over a year ago, but there appears to have been a recent flurry of activity.

They do not appear to own the .com or .co.uk versions, however, though Rocket companies often operate under different names in different territories.

There’s also a Facebook page registered in January that may or may not be linked to the business.

Copying Square is perhaps a natural step: the company has made a big noise in America, and gathered more than $150 million in funding — yet has shown little to no interest in expanding across the Atlantic.

Technically, it’s highly unlikely that Zenpay would be a straight clone of Square, however: European payment cards nearly all use an embedded chip for authentication, rather than the simple swipe that is at the heart of Square’s system (though you can still use the magnetic stripe if needs be.) If Zenpay copies that approach they may find themselves unable to gain the sort of regulatory approval required to operate a financial service across the EU.

And let’s not forget that Europe already has a Square competitor in the form of iZettle, a heavily-funded Swedish startup that has started rolling out across the Nordic region, with the U.K. as its next target.

Rocket’s ambitions are broad: in the last couple of years they have cloned almost every significant commerce startup, including Airbnb, Fab and Wrapp. It’s also run copies of eBay, Facebook, Groupon and more recently Amazon.

But it will be interesting to see what happens, because this play may not be as easy a leap for Rocket to make as its pure play online services.

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But when I spoke to CEO Jacob de Geer a few days ago, it became clear that while they share plenty of DNA, the two companies are starting to go in different directions.

It’s been a big year for iZettle. It came out of beta and hit full launch a couple of months ago in the (admittedly small) Swedish market, and has since gained a strong following with thousands of shops and merchants signing up. That interest led to an $11 million round of funding led by Index Ventures, presumably to help the business expand outside its home country.

I talked to de Geer about his plans for the future, and found out that the company wants to be in another six to 10 European markets by the end of 2012 — and that it is hoping to achieve a lot of technological progress over the next year, too.

But there’s another important conversation de Geer expects to stay at the top of the agenda in the meantime: the question of whether NFC touch technology will become mainstream.

“Everyone is talking about near field communications as a kind of new messiah,” he says. “But the problem is that there are still no NFC-enabled credit cards, and still no NFC-enabled terminals — it’s a chicken and egg situation.”

It’s true that NFC has had the slowest of starts. Despite support from the likes of Google and Intel and consistent rumors about Apple’s interest, not everyone is convinced.

Speaking at our Mobilize conference earlier this year, Square’s COO Keith Rabois was clear about his position on the technology. “I’ve never met a single merchant in the U.S. who says ‘I want this NFC thing’,” he told GigaOM founder Om Malik in an on-stage conversation.

Instead, the company has opted to circumvent the idea of touch entirely with location-based service called Card Case — which uses location and loyalty to offer hands-free payments.

In contrast, however, iZettle isn’t ruling out adopting or supporting NFC — and thinks that providers can be agnostic about the technology for now.

“The big difference between us and Square and Keith Rabois is that they have clearly put down their foot and said that NFC stands for Not For Commerce,” says de Geer. “In the short run NFC is overhyped and it will under-deliver — but from our position, looking at the effort and marketing and rules changes coming from the card carriers, I am not as skeptical. I think NFC is likely to happen… but I think it will take a while.”

In fact, he suggests, the rollout of NFC — which he predicts to go mainstream by 2015 — could actually be a crucial element in helping iZettle become a global player. One simple reason: technology.

While America is largely still reliant on the magnetic strip, most credit cards outside of the U.S. use embedded chips and PIN entry to provide an extra layer of security. This on-board system means that the idea of supporting NFC is not as daunting to a company from outside American borders — and it means that it would be far cheaper for a merchant to spend a few dollars on an iZettle device than hundreds on buying a new cash register or card payment machine.

“We can tap into NFC hardware that’s already in the phone,” he says, “but then there’s the cost effectiveness of us being able to populate the market with NFC technology, rather than trying to repopulate the existing point of sale devices — it’s a lot more appealing. That means that if it turns out the consumer wants it, we can support it.”

In the meantime, says de Geer, the best route to success may be to partner with other companies to develop new possible answers. Retailers looking for better loyalty systems and faster payment options are already starting to route around the slow-moving card companies and their NFC catch 22.

“We see a lot of companies experimenting with new payment solutions, like Starbucks,” he says, referring to the coffee chain’s mobile trials.

“They’re fed up with the existing infrastructure, and they’re starting to look at either creating their own proprietary solutions or finding alternative solutions with built-in loyalty,” says de Geer. “I’d be surprised if we don’t see other companies following the same trend.”

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The system, which consists of a plug-in device and app, goes live today, with approval from Visa, MasterCard and Europay, and focus on helping small merchants and individuals — many who don’t currently take card payments.

The full commercial launch only covers Sweden right now, but now it’s officially up and running after a trial period that started in August, it’s ready to grow quickly. The company recently took $11 million of funding to help exactly that expansion.

According to MasterCard’s Matt Taraldsson, the card provider will be helping it roll out across the continent soon.

“Since its launch in Sweden in August iZettle has proven to be a big success, and has clearly shown that small businesses and individuals appreciate the convenience and security of taking card payments anytime, anywhere. We are proud that iZettle continues to build on MasterCard’s expertise – and as they now initiate their commercial launch across Europe we think it’s great news that millions of merchants for the first time will be able to take card payments”

.

There’s clearly an opportunity here, and Square has been making a lot of noise — not least because of CEO Jack Dorsey’s zen-like appearance at GigaOM’s RoadMap conference last week.

But no doubt skeptics will no doubt look on iZettle as little more than a clone of Square: yet another example of a European company copying an American rival in order to corner the market first. Pricing, for example, fits the bill: just like Square, iZettle takes a 2.75 percent cut of each transaction for processing. But iZettle also takes a fee of €0.16 (22 US cents) per transaction on top, making it slightly more expensive to use.

The clone argument is a little unfair to iZettle, however, since it has had to build an entirely different technology for processing payments. Its gadget is slightly larger than Square’s box, and it’s one which plugs into the bottom of an iPhone, rather than the headphone jack at the top. This isn’t just a matter of looking different for the sake of it, however: it’s practical.

The simple magnetic swipe system used by most American cards (and therefore by Square) is pretty antiquated to Europeans, who largely used chip-based PIN entry to verify their purchases.

That means payment devices need to have a card inserted into them, rather than using a quick swipe-and-sign approach. It also means, theoretically, that the services are more secure by design: something that could be useful as iZettle looks to expand into new territories.

The bigger point is that both companies are working to change the payments industry, one of the largest markets around, and one of the least dynamic. Yes, there are plenty of similarities between the two — but there’s more than enough room for several players right now.

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