SumUp brings mobile payments to France – what about iZettle?

Dec 20, 2012
Vote on Hacker News

As announced today on TechCrunch, fast-growing Berlin-based and $20 million-backed SumUp, is expanding to France as well as Belguim and Portgual.  This will bring the number of markets in which SumUp is operating to 10. Having launched only 4 months ago, this move enables them to leap frog Europe’s other two leading ‘Square-type’ startups, Norway-based iZettle (aka ‘the European Square’) and Berlin-based and Rocket Internet backed Payleven which currently only operate in 7 and 6 markets respectively.  One key attribute of SumUp that helps them stand-out from the competition is their ability to process Visa payments, an area where iZettle has struggled in the past.

Thus far, there hasn’t been much appetite from the principal mobile payments players to make France a priority market.  Perhaps it’s because of the power France’s banks have in this space, particularly as they’ve been actively working over the last couple years to develop and commercialize their own mobile banking apps and systems (and here) and, as such, have a real incentive to make it as difficult as possible for new entrants.From their perspective, Paypal was already bad enough!  Perhaps its the presence of Paypal which, although slow to take hold initially, is now standard in France and widely used by consumers.  On the merchant side, perhaps it’s because the fee on Square type systems tend to be quite high at 2.75% vs .5% on average for standard carte-bleu transactions.  Or, perhaps it’s the relatively low cost and, as such, wide scale proliferation of ‘mobile’ credit card processing terminals. Unlike in the US where the mobile card reader was a real revolution due to the absence of hand-held mobile card processing machines, perhaps in France the real demand for Square like credit card processors lies with person-to-person transactions.  At the moment there are a couple French versions of Square, such as the Truffle Captial backed Paytop, but not yet anything to the level of a Square, iZettle, or, now, SumUp.  With the entry of SumUp, things look like they’re about to change.

iZettle, in particular, has expressed a real interest in the French market announcing earlier this year that they plan to use the €25 million they raised to fuel their interntional expansion into France as well as the UK (done), Spain (done) and Italy (TBC) .  According to their CEO Jacob de Geer, France is “definitely a potential market and to check back very soon for updates”.  Having already checked two of their priority expansion markets off the list, hopefully we’ll fianally see iZettle here in 2013…

Although the competitive terrain for mobile payments in Europe is increasingly crowded (which will make it even harder for Square when they finally get around to coming to Europe), de Greer feels that they are still well-positioned to lead and launch successfully in France and other markets adding:

“The mobile payments market has a huge potential and room for several players but we’re very confident we’re well positioned to lead this race. We’re already running our operations in seven markets across Europe with 80,000 users and that experience is invaluable. We have the most user friendly and secure solution in our area, which is what makes the difference in the long run. Adding to this our partnerships, like DZ Bank and Deutsche Telekom in Germany, and Everything Everywhere in the UK, and investors like MasterCard and American Express, will be of great help too.”