U.K.-based mobile point of sale company iZettle now charges a range of 1.5% to 2.75% based on the merchant client's monthly volume.

iZettle provides merchants with a mobile card reader that can accept EMV-chip cards. In its earlier pricing, iZettle charged 2.75% for all transactions — a rate that is standard for mobile payment companies in Europe, including Payleven, SumUp and PayPal Here.

The new Smart Rate system calculates the merchant's fee automatically at the end of the month. Businesses with £2,000 or less in monthly sales still pay 2.75% per transaction. The percentage declines for higher volumes, with the lowest rate of 1.5% offered to merchants with at least £13,000 in monthly sales. Merchants can use an online slider to estimate their transaction fee for a given month.

"All of our clients pay by card as nobody carries cash anymore. It is crucial for us to keep transaction fees as low as possible as we are keen to maintain a healthy and stable business," says Andrew Landsburgh, director of Destiny Scotland, a property management company that uses iZettle, in a July 24 press release. "We've trialed the Smart Rate for a month now; we're big fans and can already see a difference. As every successful entrepreneur knows, every penny counts." 

Since May, iZettle's card reader has been available in European Apple stores.

"We see a great take-up on our chip-and-PIN reader from small businesses processing high volumes of sales and we are extremely excited to be the first to bring this type of pricing model to these merchants," says Jacob de Geer, co-founder and CEO at iZettle, in the release.

Other companies are attacking the 2.75% pricing standard. Square introduced a flat-fee option almost a year ago, allowing merchants with up to $250,000 in sales a year to pay $275 a month to use Square's readers. These merchants must also keep their individual transactions below $400.

SCVNGR's LevelUp offers free transaction processing to merchants that use its mobile payment system; merchants instead pay for an attached incentive program. Koupah charges 2.69% plus three cents per transaction, but offsets that cost with revenue from ads displayed on the merchant's terminal.

Groupon charges 1.8% plus 15 cents for swiped Visa, MasterCard and Discover transactions.  Groupon says it keeps its payments costs low by relying on its own sales force instead of working with independent sales organizations.

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