Keep up the heat! – iZettle founder welcomes competition
A long list of fintech innovations across all areas of financial services, is inspiring the development of a regional fintech ecosystem. Copenhagen’s seizing of Europe’s first Money2020 and a plethora of other events hosted by the region is further proof of a region keen to compete on the world stage.
And why not? Affluent, well-educated, technologically-literate societies and a sophisticated banking industry to match make this region the ideal test bed for new innovation.
In the first of a series of interviews with Nordic fintech entrepreneurs, we look at iZettle, one of the megastars setting the world alight with its pledge to make running a small business simple, secure and fun. Co-founder Magnus CW Nilsson tells us that ‘iZettlers’ come to work every day to build game-changing, easy-to-use payment services and apps for building a small business.
- What challenges do established financial service providers face in an increasingly competitive fintech environment?
There are many challenges for established fintech firms despite them having the advantage of scale. Take banks, for example, where existing products are expensive and the process of changing the business to be innovative presents a shift in mindset. Another challenge for incumbents is attracting the best talent to innovate.
- How is iZettle meeting these challenges?
We want to keep innovating. We maintain an SME culture and structure our business for entrepreneurship. We also welcome strong competition to keep us on our toes and challenge our ideas.
- Is the playing field level for all parties?
The introduction of PSD2 is a good thing and is challenging the financial model. While all have the same requirements, small companies find it challenging to navigate the regulatory environment. Disruptors should disrupt and challenge the status quo, and leave the market to adapt.
- What are your most promising markets?
We started like Square with a cheap and secure product but targeting Europe. Two out of three card networks supported iZettle with our chip and signature solution together with phone/tablet device. Visa Europe did not support iZettle in the beginning. We had to deal with traditional EMV (chip and PIN) and not just signature. iZettle had to find new ways to be disruptive. We are currently focusing on Europe and Latin America.
- Why are you focusing on SMEs?
SMEs represent 30-60% of GDP depending on the country. Our key segments are retail, hospitality and business services, which are underserved by the banks.
- How difficult is selling and distributing to other countries?
Language and messaging are the main challenges. We found we had to find the local voice and accept that it takes a little longer to get market penetration outside your home markets.
- What’s next for iZettle?
We are growing and developing new services for the future.
- Who are your benchmarks?
I admire Facebook – they chose what to do and what not to get involved in. This is more difficult than one would imagine. And of course, relentless focus to be great.
- What does iZettle need for global success?
We’ve built many central functions suitable for an international market. EMV, global standards and proper regulatory environments are important for us. As is attracting great people to work for us.
- Are transactions and income matching your earlier expectations?
iZettle started in 2010 and building the business has taken a long time. The company continues to follow the original plan and we are delivering on our expectations. But you can never rest. Everything can always be improved.