- Highs: Best mPOS app. Best card selection. Charges go down with increased monthly use.
- Lows: Receipt printers are extra. No phone support after 5 pm.
- Buy if: You want an easy solution for taking payments in a store and/or you want to accept contactless payments.
mPOS fuels cashless society
As consumers become reliant on the benefits of cashless shopping, debit and credit cards are fast becoming the way to pay.
Put simply, not accepting cards means lost sales. So it makes sense for all merchants dealing directly with consumers to get in on today’s card payment action. Many entrepreneurs and small businesses find traditional point of sale (POS) solutions too costly, however. Application processes also have a reputation for being overly strict, and slow.
iZettle promises to change all that. Its compact card readers work in tandem with a clever smartphone app, meaning sellers can take payments just about anywhere, any time. The system operates on a pay as you go model – revolutionary as far as the card payments industry is concerned.
The company even offered a free card reader to lure those wary of signing up, although we find the new iZettle reader (special offer here) is a much better deal.
On paper, iZettle appears to be the card payments solution sole traders, entrepreneurs and start-ups alike have been waiting for. Yet in the UK, does iZettle live up to its promise to level the payments playing field? How does the mPOS system fare when pitted against competitors, such as Payleven, SumUp and WorldPay Zinc? Gain insight into all these issues, plus learn the basics about the iZettle system, in this comprehensive review.
iZettle – the low-down
iZettle is known as an industry leader, and it’s not hard to see why. A pioneer in mobile point of sale, (mPOS), iZettle launched a new card reader in July 2016 with longer battery time, faster payment processing and contactless payments via cards, Apple Pay and Android Pay.
The previous free “Lite” model and the Contactless Pro model have been discontinued, but we find the new iZettle Reader to be a far better option. If you’re looking for a cable-free storefront solution that, or just for more features, we reckon the iZettle Reader is a market leader.
More positives about iZettle include its acceptance of the broadest possible range of credit and debit cards – Visa, MasterCard, Visa Electron, V pay, Maestro, JCB, Diners Club and American Express – as well as its feature-laden, yet highly usable app.
Additionally, we found rates offered by iZettle to be competitive in today’s POS marketplace. There are no monthly fees, and the set transaction fee decreases as your usage goes up. Negatives are a lack of phone support after 5 pm weekdays and in weekends, and the extra cost incurred if you need a receipt printer.
To sum up – For small businesses, entrepreneurs or sole traders on the go, iZettle is definitely worth considering.
How does iZettle’s payment technology stack up?
Similar to more traditional POS systems, central to the iZettle platform is a credit and debit card reader, known as a “Chip and PIN” machine. Several models of iZettle machines have been available over the years – including the “Pro” contactless reader and the simplified “Lite” variant – but in the summer of 2016 iZettle replaced them with what it simply calls “iZettle Reader”.
In addition to the card reader itself, you’ll require a compatible smartphone or tablet on which to run the iZettle app. The app is free and available on Apple iOS (iPhone, iPad) and Android platforms.
NB: iZettle was initially only able to accept contactless payments and Apple Pay when it was run with Apple’s iOS. iZettle’s completely overhauled app 3.0 for Android now supports contactless payments as well.
Connect to WiFi or 3G with iZettle
iZettle’s card machine connects to the smartphone or tablet being used, and therefore, the Internet, via Bluetooth. The earlier Lite version connected via cable, but it has been discontinued in favor of the faster Bluetooth option.
Charging with USB cable or iZettle Dock
The card reader is charged via a micro USB cable. It will go automatically into sleep mode when not in use, and the battery therefore lasts longer than the older versions, which received complaints for short battery life.
Businesses selling from a fixed location or a desk would want to use the card reader with iZettle Dock, a cradle which charges the reader. This will eliminate all battery worries, as the card terminal is charged when it rests in the cradle. We found that the iZettle Dock makes the iZettle check out experience even more impressive.
Ease of processing
The iZettle reader is not a stand-alone machine – it uses your smartphone or tablet to actually process the payments. This is the essence of the iZettle solution: in contrast to conventional POS terminals that use landlines or a GPRS SIM card, iZettle’s mPOS system smartly utilises the processing power and Internet connection of your smartphone or tablet, meaning there is no requirement for complicated custom hardware.
Not only does this make the iZettle system portable for use almost anywhere, but it also reduces overall POS costs significantly.
iZettle charges: How hard does iZettle hit you in the pocket?
We found iZettle’s fee structure to be simple and straightforward – and best of all, relatively low when compared with other POS systems in the marketplace.
The card reader itself is extremely good value. The wireless iZettle Reader costs only £59.00 excl. VAT. (Exclusive offer for our readers: £25 excl. VAT through this link).
The charging cradle, iZettle Dock, costs £39.00 excl. VAT. in the iZettle accessories store, or can be purchased in a bundle with the iZettle Reader for new customers (offer for our readers: only £49.00 excl. VAT).
In addition, there are no monthly fees, rental charges, monthly minimums, or other fixed costs. Merchants are charged for sales only, and unlike most of iZettle’s competitors, there is no fixed charge per transaction. Instead, iZettle’s fee system operates on a sliding scale, with transaction rates starting at 2.75%.
The rate drops lower for businesses that have a monthly iZettle revenue of more than £2,000, reaching 2.00% around £4,500 and 1.75% at around £6,200. From there it slides to 1.54% at £10,000 and all the way to 1.00% with high enough volume. On iZettle’s site you can calculate your transaction rate based on average monthly sales.
There are no fees for refunds, and there is no added charge for foreign cards.
Funds are deposited daily. They are credited to the seller’s bank account three banking days after the transactions took place.
No merchant account required
A big bonus with iZettle is that there is no need for a merchant account or separate contract with a merchant services provider. All you need is a bank account registered in the name of your business, (if you have a business account), or in your own name for a private account.
iZettle does have transaction limits, yet these are unlikely to affect most business accounts, as the daily limit is £200,000. Transaction limits are, however, lower for private accounts. Transactions made using the magnetic stripe are subject to a daily limit of £100. The minimum transaction possible with iZettle is £1.
For more details, read iZettle’s transaction limits: the full story.
How does the iZettle Chip and PIN machine work?
iZettle’s card readers are easy to use: the merchant sets the amount to be charged in the app and hands the card reader over to the customer, who inserts the payment card and keys in their PIN number.
Inventory items can be pre-programmed, complete with names, prices, descriptions and even images. Clicking on a product image allows items to be charged quickly. As such iZettle is more than a payment terminal – the free app is a POS system in its own right with the iPad working as a cash register.
For most businesses the functionality in the iZettle app is sufficient. If inventory control and more advanced POS features are required, iZettle integrates with iPad POS systems like Intelligent POS, Vend and Lightspeed, which would start at an additional £29 per month.
To make the system more useful for accounting purposes, cash sales can also be calculated and recorded the same way, even though there is no payment processing involved.
Whom is iZettle suitable for?
The iZettle platform is suitable for all trades and sectors: it’s currently being used by a range of merchants, from plumbers to barbers, book shops, street vendors, hair dressers, taxi drivers to coffee shops. The mobility iZettle offers is especially useful when taking payments at trade fairs, markets, pop ups and car boot sales. Here, in fact, iZettle’s Chip and PIN machines really come into their own.
For the Chip and PIN system to work, you need an iZettle card reader plus a compatible smartphone or tablet with Internet connection. The app can connect to iZettle’s servers using either WiFi or 3G. However, we’ve also seen reports from users indicating they’ve had no problems using slower connections, such as EDGE.
Integrate with Xero
To take accounting a step further, iZettle can be fully integrated with the online accounting software package, Xero. Offering all the standard features of an accounting system, it also includes payroll.
Read more: Xero integration with iZettle
A sleek card machine; also an accounting system
After an iZettle transaction is processed, there’s an option to send a receipt via email or text message. Printed receipts are also possible, although you’ll need to invest in one of several receipt printers compatible with iZettle. The system can also be expanded with a cash drawer.
iZettle keeps a record of all sales, and full sales reports are available – including cash sales, if they are recorded via the app. Free analytics tools are included to help keep track of inventory and identify repeat customers, as well as helping to spot business trends, such as revenue growth and top-selling products. All reports are able to be exported to Excel.
Changing the way small businesses take card payments
Given the ingenuity of the mPOS payment model, it’s not surprising iZettle is not the only company to have introduced a mobile card reader. The mPOS craze kicked off in the US with Square, before rapidly spreading to Europe and the UK. Since then, mPOS has radically changed the way small businesses take card payments. Competition in the UK is now fierce (see our comparison chart).
The mPOS market has come on in leaps and bounds, even when compared to just two years ago. Rates have declined, apps are more feature-laden and there are a bunch more providers to choose from.
Previous iZettle reviews we read suggested the Swedish company was quick to become the “go-to” option in the UK. User feedback appears to back up this opinion.
Despite iZettle’s success, in 2014, new platform SumUp became a formidable contender for most popular mPOS system. Its flat 1.95% rate was quick to see rapid uptake amongst SMEs and entrepreneurs. Yet in 2016, iZettle appears to have again taken the upper hand. Having been the first mPOS provider to offer contactless payments in 2015, the new Reader launched in July 2016 processes payments faster and has longer battery life than PayPal Here and SumUp.
With the backing of MasterCard, American Express and Santander among others – and with funds of more than £70m raised so far – iZettle is now well positioned in the battle for global mPOS expansion.