Swedish start-up iZettle, which provides technology that turns mobile phones into payment terminals, has teamed up with wireless operator EE to launch in the UK.
The iZettle app and card reader, which works with iPhones, iPads and more than a dozen Android handsets, enable merchants to accept card payments through their phones.
Initially, the dongles will be available to buy at EE's 297 stores and through its tele-sales channel for £20, with buyers also receiving a £20 voucher towards the transaction fees.
These fees are set at 2.75%, with the firm targeting small businesses and tradesmen. According to an EE survey, the UK's plumbers, electricians and builders are currently owed up to £283 million by late or non-paying customers.
At the launch in London yesterday, Marion King, president, UK and Ireland, MasterCard - which is an iZettle investor - tested the system with online jewellery retailer My Flash Trash:
The iZettle device is EMV-approved and generally works on a 'chip and signature' basis on the phone. In the UK, a merchant using iZettle can accept MasterCard, American Express, Diners Club and Visa.
However, Visa Europe's rules and regulations mean that payments are not accepted via the card reader. Instead a text message, with an embedded URL, is sent via the merchant to the purchaser's phone and the card details are entered at a secure Web site. The compromise comes after much wrangling, with iZettle unable to accept Visa payments during its six month, 4000 participant-strong UK beta phase.
Jaqcob de Geer, CEO, iZettle, says: "The beauty of iZettle is that it's simple to use, totally secure and takes seconds for transactions. Whether you are a cabbie, florist, tradesperson or a courier, iZettle gives you the flexibility to operate in both cash and cards."
De Geer, King and EE chief marketing officer Gerry McQuade, discussed the launch in a special panel:
The full UK launch comes on the heels of iZettle's arrival in Germany through a partnership with DZ Bank and Deutsche Telekom. In Sweden, Denmark, Finland and Norway, the start-up already claims more than 75,000 customers.
However, it faces plenty of competition from the likes of PayPal, German-based Payleven and London-headquartered mPowa, while, across the Atlantic, market leader Square is expected to make an international push.