Swedes want to turn german smartphones into cash machines

In germany, providers such as streetpay, payleven and sumup are already active in this business. The swedish company izettle was launched in 2011, initially in great britain, finland, sweden, norway and denmark, and now has around 75,000 users.

25,000 insertable card readers are available free of charge for the launch in germany, izettle announced on tuesday. DZ bank and deutsche telekom were won as partners. This will help izettle gain the trust of the people in germany, grunder and boss jacob de geer told the news agency dpa. "We have been preparing the entry into germany for a long time, because it is a rough and important market for us."He reckons that in the long run not all bidders will be able to stay in the game. Izettle was supported by experience and a high level of service security: "our main competitor is the cash euro," de geer said confidently.

Izettle charges 2.75 percent of the amount paid per transaction. Now a price war is already getting underway among the providers: this is the value to which the german competitor payleven had also lowered its fees a few days earlier – from 9 cents plus 2.95 percent of the amount previously charged. Competitor sumup also wants 2.75 percent and rival streetpay even only 1.90 percent.

Izettle sees the ability to read card chips and offer PIN payment as a key advantage. Meanwhile, payleven, a company from the berlin startup incubator rocket internet of the brothers oliver, marc and alexander samwer, can also do that. The trio often adopts business models from the u.S. And successfully adapts them to local markets. An example is the fashion store zalando. De geer nevertheless sees izettle at an advantage over samwer’s competitors because of its broader experience: "we are active in an extremely tightly regulated industry, and it is something very different from setting up a shoe store."

Pioneer of the business model with plug-in card readers is the u.S. Company square of twitter co-founder jack dorsey. Square was founded in 2009 and, according to media reports, is on track to handle annual payments of around eight billion dollars. The company recently made headlines for its partnership with the starbucks chain of coffee shops. Square is said to have been valued at 3.25 billion dollars when starbucks entered the market. Square also takes a fee of 2.75 percent of the amount and recently began international expansion with the launch of service in canada.

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