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iZettle in Mexico: “Electronic payments make sense, even for small transactions”

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In Mexico, cash is still king. However, since launching there four years ago, Swedish mobile payment company iZettle has had a major impact on the number of merchants that accept card payments.

“We’re helping educate people about electronic payments and the reasons why it makes sense to use them everywhere, even for small transactions,” says Luis Arceo, country manager for iZettle in Mexico.

Recently named one of Sweden’s fastest growing companies, financial technology company iZettle offers a range of products for small businesses including payments, point of sales, funding and partner applications. The company, which is now present in 12 countries, has also developed one of the first internationally compliant chip and PIN card readers and smartphone apps for mobile payments.

When iZettle expanded into Mexico in 2013, its challenge was to promote mobile and card payments in a culture where cash is still very much king.

“About 85% of all consumption in Mexico is paid for in cash, with electronic payments accounting for only 15%. Moreover, only six merchants per 1,000 inhabitants in Mexico accept card payments, compared with more than 20 merchants per 1,000 inhabitants in Brazil or more than 50 in the U.S.,” says Arceo.

This represents a challenge but also a huge opportunity for iZettle.

“In only four years’ time we have grown from one to 45 employees at iZettle in Mexico and we continue to look positive at the future,” he says.

Business Sweden has supported iZettle’s launch in Mexico since day one, providing an office space during the company’s first two and a half years in the country, and introducing iZettle to potential partners, both in the public and private sectors.

Mårten Wilkens from Business Sweden in Mexico explains that they provided local market knowledge that enabled iZettle to get a head start and mitigate risks.

“We gave iZettle an accelerated landing in Mexico by drawing up a shortlist of contacts and providing office space while they got settled,” he says.

Mexico was assessed as a great opportunity for iZettle. The country has more than 120 million inhabitants, about 180 million credit and debit cards, a large number of users of smart phones and tablets, and good internet access. Challenges for iZettle upon entering the Mexican market were to identify high-level potential partners that could support the use of iZettle’s products.

Arceo says Business Sweden’s events have also helped increase brand awareness for iZettle in Mexico.

“Business Sweden has helped us to present our solution to key stakeholders within the Mexican Government and private companies,” he continues. “Having back-up from Sweden proves to people here that we’re a professional company, with a reliable product.”

Arceo admits that some Mexican customers had never been in contact with any kind of technology or bank account product before they encountered iZettle.

“One of our customers is a street vendor who sells Mexican candies. Since he started accepting card payments with iZettle, he’s seen the average ticket size double when customers pay with cards,” he says. “As this micro-merchant didn’t have a bank account, we also set him up with one of our co-branded debit cards, thereby promoting financial inclusion.”

About iZettle

Founded in 2010 and with service launched in 2011, iZettle is a Swedish financial technology company that seeks to simplify and democratize payments. Employing more than 500 people, iZettle offers a range of financial products for small businesses including payments, point of sales, funding and partner applications. It was one of the first companies to develop a chip-card reader and mobile payments app that complies with international security requirements. iZettle is available in Sweden, Finland, Denmark, Norway, the UK, Germany, France, Spain, Italy, The Netherlands, Mexico and Brazil.

Challenge

To promote electronic and card payments in a culture where card transactions account for only 15% of overall consumption.

Solution

Business Sweden supported iZettle’s start up in Mexico providing local market knowledge, office space and contacts to important stakeholders. Through continued support Business Sweden helps to minimize risks, shorten time to market and accelerate iZettle’s landing in Mexico. 

Result

Increase of the card acceptance landscape through all the country with the most reliable solution in Mexico that accept PIN transactions. The launch of the iZettle debit card for small business owners, who were previously excluded from the financial system due to not being able to open a bank account, to start making and accepting card payments.

The number

Six: Only six merchants per 1,000 inhabitants in Mexico accept card payments.