Member Article

Disrupting payments

Stewart Roberts, managing director of payments innovator, iZettle, looks at the payments sphere, and the ideas that fuelled the business.

When we think about disruptive technologies, such as the invention of the telephone or the car, we think about the development of modern and innovative solutions to age old problems. Whether they make communicating or transport easier, in retrospect these inventions often become so normalised that we are left wondering how we ever got by without them.

Helping small businesses

iZettle was borne out of a similar need – to address the problem of vendors reliance on taking payments by cash. What it does is turn a smartphone into a card payment terminal. When they first hear of iZettle people typically recall their own experiences of finding themselves short on cash – the taxi they couldn’t take home one night, or the time they had to leave the marketplace empty handed.

While iZettle certainly does provide that flexibility for consumers, it’s primarily aimed at small businesses – helping them overcome barriers to payments. A big part of the problem is that many micro businesses and tradespeople could not access suitable services to offer acceptance of card payments, which can result in resorting to payment methods that make reduced, late or even non-payment a regular risk. For small businesses this can have a significant impact on business cash flow, which in serious cases can result in costly short-term loans to keep afloat or ultimately cause operations to seize up altogether.

Starting small

The spark for iZettle came from a conversation between the founder, Jacob de Geer and his wife. As a sole trader selling eyewear at trade shows she regularly found that although customers love her products, they often didn’t have the cash to hand in order pay for them. He recalls her frustration one evening where she complained that if only she had been able to take card payments, sales would have been at least 50% higher that day.

Wanting to help her, Jacob looked into existing mobile payments solutions, but soon realised that nobody had yet provided one. Immediately, he set about the task of democratising card payments and soon after iZettle was born. With compatriots such as Spotify, Tradedoubler and Mojang also being founded in Stockholm, the city has emerged as a real tech hub and cauldron of innovation in recent years.

They were certainly a great inspiration - the best start-ups draw influence from their peers’ success, and iZettle is no exception. That said, starting a new business in an economic downturn is certainly not without its challenges. People can be deterred by launching during such a difficult climate, but they shouldn’t be – what’s important is how relevant the product is. We’ve come to market at a time when profit margins are tight, so naturally businesses are looking for ways to really maximise any potential revenue.

As we expanded out of Sweden, one major consideration for iZettle was that traditional industry providers in payments were in generally big domestic brand financial institutions, so with a new and relatively unknown foreign brand its was critical to ensure that we demonstrated the benefits that small agile businesses can deliver by investing more time into getting really close to our customers, designing our service for front line use and being totally transparent by showing our brand new service, live in action with real customers using iZettle at our launch event.

User friendly technology

I think the reason the technology behind iZettle works so well is because it was inspired by a real business need – the omnipresent problem of lost payments, and utilises everyday technology that most people already have to hand; smartphones.

People want their technology to work for them rather than the other way round, which is something we always try to address. As a business we’re really focused on working with other small businesses. Ultimately, the product is there to make life easier for them so we’re incredibly sensitive to their needs.

The demand for a new generation of payment solution speaks for itself - having launched in 2011 iZettle is now established across seven markets (the four Nordics, the UK, Spain and Germany) with others set to follow soon. What’s crucial to us as we expand is staying true to our community. iZettle’s success is due to the support of small businesses, so we need to maintain that ethos and practice across our operations and products – developing products that give the small trader that peace of mind, quality information to run their business more efficiently, and ensuring they never miss a sale again.

This was posted in Bdaily's Members' News section by iZettle .