Stockholm-based iZettle is bringing its mobile card reader into Mexico.
Were going global and the first stop for the iZettle world tour is Mexico, the company stated June 18 on its blog.
Mexico represents iZettles first non-European market. This puts the company's mobile card reader on the continent that Square Inc. has called home since it introduced its popular mobile card reader in the U.S.
iZettle hasnt indicated the next stop on its world tour, but it is likely to expand into Latin America behind Banco Santander, which announced a 5 million euro investment (U.S. $6.6 million) in iZettle last week.
Mexico makes more sense for iZettle as a first stop than the U.S., says Jeffrey Green, director of emerging technologies advisory services for Boston-based Mercator Advisory Group.
The U.S. market [for mobile readers] is pretty saturated as it is, Green says. Even if iZettle came to the U.S. with an EMV-chip card reader today, that reader wouldnt be in high demand, since consumers in the U.S. still overwhelmingly use magnetic-stripe cards, Green says.
Plus, Square and other U.S. mobile-payments providers may introduce their own EMV card readers in the U.S. in the coming years, he says.
Regardless, iZettle describes its move out of Europe as a significant step for the company.
This is a very important day for us, iZettle co-founder and CEO Jacob de Geer states in a press release. Shifting from local to global operations in financial services in less than three years of operation is a major accomplishment from our perspective.
Luis Arceo, a former Visa executive, will head iZettles Mexican operations as managing director.
iZettle will also introduce a new mini reader for Apple or Android phones and tablets that will allow small merchants in Mexico to accept chip and mag-stripe cards. iZettle plans to distribute several thousand free readers during a promotional period in Mexico. After that promotion, the new reader will sell for 499 pesos (U.S. $39.25) with discounts for Banco Santander customers.
iZettles mobile payments service is currently used in seven European countries.
This is the start of big change for Mexico, where accepting card payments has never before been an affordable option for new or small businesses, de Geer says.
iZettle charges a flat 2.75% transaction fee in Europe. Its rates in Mexico are 3.75% of each transaction when using a chip card, and 4.75% for mag-stripe card transactions. As in the past, iZettle charges no subscription fee, set-up fee, monthly fee or a transaction minimum. iZettle electronically deposits payments in the sellers bank account.
Swedens Financial Supervisory Authority regulates iZettle, whose services are EMV approved and compliant with the Payment Card Industry Data security standards.
In Mexico, iZettle is subject to the Mexican regulatory requirements as it applies to payment facilitators, card networks and acquiring banks.