Payments startup iZettle makes chip & PIN card reader available for free

With a free Chip & PIN card reader, Swedish mobile payments company iZettle is lowering the threshold for small companies to start accepting card payments.

The Card Reader Lite, released Tuesday, connects to tablets or smartphones via an audio cable and it is meant to lower the cost barriers small merchants face when setting up their businesses, iZettle said.

Startup costs weren’t that high to begin with though. Businesses only pay €49 (about US$55) for iZettle’s wireless Bluetooth card reader, which it will continue to offer, and similar readers from competing services such as Payleven and SumUp cost only a little more at €79.

While consumers prefer card payments to cash, about 20 million European small businesses don’t take card payments today, according to iZettle. Offering a free reader should help convince some of those merchants while raising the stakes on the European payments market, it added.

The new card reader is available in the U.K., Sweden, Norway, Denmark, Finland, Spain, Germany and the Netherlands.

Transaction fees start at 2.75 percent for companies with sales of up to €2,000 per month, dropping to 1.5 percent for companies handling over €28,000 of card payments per month. Payleven has a similar flexible fee, also starting at 2.75 percent for €2,000 worth of monthly transactions, dropping to 1.5 percent for over €12,000 in transactions per month.

iZettle, which handles about €2 billion worth of transactions annually, is also active in Brazil and Mexico.

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