Making payments anywhere – iZettle launched in the UK

Posted on November 9, 2012


[There is a lot here, so in short, take payments on your phone using a punters credit card]
Izettle is a device that you can attach to your phone which can read credit card details for you.

This means that you can, along with their app, take payments just using your phone,  and it’s internet connection (yes this is needed at the time of taking the payment)
Just think,  you could be a market trader, a sole trader, a mobile engineer (eg the AA/RAC etc) or just a floor walker in a large store.  Now you can take the payment right where you are.  No till, no computer, no desk.  It’s brilliant how folks like iZettle are finally providing ways to make this kind of thing happen,  and whilst so many of us still like our credit cards, then this is a reasonable way forward.  However there are a few things that, imho, need fixing up,  but hey  it’s a great place to start.
In case you’re wondering the device is rectangular,  not square.
they have launched with EE this week,  which means you can go buy the hardware from EE shops.  It costs £20,  however this is offset with a voucher, so that if you use it,  then the first £20 of charges are waived, making the device, for all intents free.
When you sign up you need to declare if your an individual or a business at the moment the split is about 50 50 on users and businesses,  will make a category for sole traders soon to support them [I guess this is to do with the 50k VAT rules etc]
A key differentiator for iZettle is the time it takes to get going, they are looking to shorten the cycle to minutes rather than many days, as some of their competitors are.
Once bought, there is no monthly fee, and fees are a flat 2.75%
They have made sure, because they have to, that this is secure and fully compliant with EMV and PCI.
This means you cannot ask for the credit card holder to enter their PIN code or similar shared secret into a mobile phone. [because it would be easy to trap it and then the PIN is no longer secret]
Therefore this service is Chip and signature rather Chip and PIN, thus after the merchant puts in the product / price details, the user must “sign” the screen with their finger/touch stylus, and the merchant must check the signature with that on the card.
[now, I am no expert but it seems to me there is a risk here,  if i have one of these devices I can “borrow a card, make a payment “agree” to a signature and take the money.]
Payments can take up to 7 days, this will going down as they become uk acquirer and so can move money around more quickly.  This seven day lag, though, is a good thing as it means if there is a problem, then the money can be stopped before it goes to the “merchant”.
To make things better they have a specialist fraud team looking at/for merchant fraud, and so they are not ignoring fraud risks.
Apparently the average transaction (in the Nordics where they have been running for a few weeks now,  is 50 euros.
Launched in Sweden and Nordics with 75,000 users, an active user is a one with more than one transaction per day, and this accounts for about half of all users.
As the paying customer you can get a receipt to your email,  and this can be shared via Facebook.  It does seem that iZettle seem to think it is important that your payments should be social,  should you want them to be.  I’m clearly too old,   am not sure why I would want to share my purchase details on line <shrug>
Looking at NFC but not in the short term,  no plans for an NFC reader,  sticking to Chip reading.
There are two versions of the device one with an Audio jack, and one  with an iPhone/iPad/iPod compatible 30 pin socket (no plans for lightening).  Do not have a USB connector,  which I find a tad strange, given that the phone manufacturers are nearly all using them as the data/charger interface these days as per the European agreement.  The audio jack version is the most compatible, as it works with all supported devices.
the reader is not associated with any one phone or version of the app,  therefore they could be passed from phone to phone as required for example if a market trader has an extra Saturday helper.
However, and importantly, when you register the app it is assigned a unique identifier, so that any transactions that are carried out on the device can be traced to that phone.  This is important for reporting, for fraud detection etc.
For the ipad they have a simple POS type application that allows the merchant to have product catalogue that they can then use to select the product for buyer to buy,  backed up with a portal to show reports on what was sold when tax etc.  All this is stored on the device and backed up in the portal within iZellte’s cloud.
iZettle have decided to keep the functionality of the POS app quite simple,  and I think, at this stage of their product lifecycle this is right.  It is far more than a Minimal Viable Product,  but it is also not bloat.
There is an API,  but not a lot of use in the market yet, and I don’t have the details of what it does or how it does it,  so no point asking me,  OK.
As kind of stated above, the process is that the punter gives the card to the merchant, (read plumber, builder, mechanic, trader, what ever) and they insert it into the reader.  The merchant selects the goods bought OR can add something to the catalogue right there and then, with a photo and brief description/price.
This sets the price etc,  the merchant can remove the card reader and hands the device to the punter to check and sign. The merchant then selects OK, and the payment process begins.
However this is not true, in Europe for all cards, ohhh no that would be too easy/good.
Visa do not allow the merchant to use their phone for the payment,  so you have to use the VISA system which will  message the punter with a URL to visas web site to finish off and authorise the payment.
This adds time and effort to the process.  Come on Visa it’s time to get into the modern world here.
In short: quick payments from a credit card, when out and about. Differentiator for merchants is the speed of sign up.  Device is cheap/free, easy to get (online or from EE) and anyone can start to take payments.
Picture from google images