To try and encourage small businesses to accept card payments, Spanish bank Santander has invested €5 million in Sweden-based iZettle, a mobile payments start-up sometimes referred to as the “Square of Europe”.
In much the same way as US-based Square, iZettle manufactures a small card-reader that plugs into iPhones, iPads and a number of Android devices.
It’s designed for use by small traders who can’t afford the infrastructure needed to take credit-card payments.
For a flat 2.75 per cent commission, iZettle’s card-reading devices allow merchants to receive payments.
The partnership with Santander will give iZettle access to the bank’s customers in the UK, adding to a similar arrangement in Spain.
“When we launched, most banks didn’t know whether to view us as competitors, friends or foes,” Jacob de Geer, iZettle’s chief executive, told the Financial Times. “Many of them have realised that we’re leveraging the installed base of cards on which they make a tremendous amount of money.”
According to the Financial Times, iZettle has raised more than €40 million in financing. It counts American Express and MasterCard among its investors.
The start-up claimed 100,000 registered users at the end of last year, and says it is now adding about 3,000 merchants each day.