iZettle’s boss is on a mission to kill cash

By Oliver Smith 23 May 2016

iZettle's black card terminals are letting Shoreditch coffee houses and sole traders ditch cash.

“Getting rid of hardware, I think that’s the future of payments.”

That’s a bold claim, especially from a man whose business has, until recently, revolved around building the card readers favoured by quirky cafes and sole traders.

Jacob de Geer co-founded iZettle in Stockholm in 2010, at a time when card payments were exploding in popularity across Europe.


Read more: Sweden is quietly becoming the home of Europe’s rising finance stars

As we increasingly moved away from cash to card, small shops and retailers struggled to take card payments without signing long onerous contracts or paying huge fees to banks and payments companies more interested in serving large supermarkets.

“What we saw is that the need for taking cards was enormous, but what we realised is that many of the smaller merchants were reluctant to adopt this new technology, whether that was from a fear of the upfront costs or overheads on their business,” de Geer told The Memo.

Today if you’ve been into an independent coffee shop, bike store or had a handyman come out to your house, chances are you might have been handed one of iZettle’s card reader devices to pay with.

That’s because iZettle doesn’t charge monthly subscription fees or set-up costs for these small retailers to take card payments, it’s just a free (or cheap) iZettle terminal and then a small transaction fee.

A contactless country

It’s not just quirky coffee shops, in the UK with London’s black cabs being ordered to start accepting card payments by October, many cabbies are looking at iZettle as the quickest, easiest way to achieve this.

iZettle has even put together a TfL-approved contactless card payment bundle for drivers to take card payments.

Read more: Black cabs offer card payments, but with a nasty sting

De Geer says the UK is by far iZettle’s fastest-growing market, outstripping even the company’s home market.

“The UK is even more advanced than Sweden, especially when it comes to contactless. Still in Sweden you can’t find contactless cards being issued by banks.”

Indeed Brits have swarmed to using contactless. In March we spent a combined £1.5bn with contactless, an all-time record, just four months after we passed the previous monthly record of £1bn with contactless.

De Geer says Britain has now reached a contactless “inflection point” where the sheer momentum of contactless cards and shops accepting contactless are rapidly accelerating, part of the reason iZettle has grown so quickly in the UK.

But building new card readers and hardware isn’t de Geer’s ultimate goal, iZettle is on a mission to move beyond payments.

“Getting rid of hardware, I think that’s the future of payments.”

iZettle lets small businesses take card payments across 12 countries.

The next lenders

Last year de Geer raised €60m in funding and announced an expansion of iZettle to include cash advances for its customers.

Now your favourite small coffee shop can borrow against its sales history and use the money to invest in higher quality coffee beans, hiring new baristas or even a opening a new store.

Since the financial crisis it’s this kind of borrowing that traditional banks have been reluctant to offer, leaving these small companies and sole traders in difficulty, now a host of new lenders are springing up to serve this market.

If small businesses borrowing against their sales history sounds familiar, it could be because PayPal, Amazon and Square (iZettle’s US rival) all began offering similar services over the past year.

Read more: Looking for a UK business loan? Amazon might be the answer

But that’s not something that worries de Geer.

“There will be plenty of players in this space, SMEs have been painfully underserved.”

“I think we have one of the strongest merchant acquiring machines going in the offline space [with iZettle’s payment terminals attracting new retailers who might go on to borrow from iZettle], we’re much stronger than PayPal,” he says.

Still, PayPal and Amazon have both had long head-starts in lending to small businesses, and neither has claimed to have seen much success in the space.

Today de Geer is confident iZettle can do better.