Mobile payment startup iZettle has to stop processing Visa card payments in Denmark, Finland and Norway where it currently trials its mobile card payment service. The company has released a statement on its official blog, announcing that Visa Europe is forcing iZettle to stop accepting Visa payments on August 1. iZettle will continue to accept MasterCard and AmEx in those countries.
Sweden-based iZettle provides a mobile payment service that enables merchants to accept credit card payments using an iPad, iPhone or iPod Touch. The company is often referred as the European version of Square. But unlike Square, iZettle reads the credit card data from the EMV-chip (the global standard for chip cards) rather than the magnetic stripe. iZettle started its mobile payment service in Sweden and is currently running an open beta in other Nordic countries (Denmark, Finland and Norway) and the United Kingdom. It’s noteworthy that iZettle never supported Visa payments in the U.K.
At this point it’s not clear why Visa Europe is forcing iZettle to stop accepting Visa cards – most probably Visa is not happy with iZettle’s “chip and signature” authentication model. The official EMV approved procedure would be “chip and PIN”, but PIN entry is only allowed on dedicated devices, not on the smartphone itself. Jacob de Geer, iZettle CEO, said: “We hope we can bring Visa card acceptance back to Denmark, Finland and Norway shortly and will of course keep you posted on the development.”