Everything Everywhere, the UK operator owned by Orange and Deutsche Telekom, is to be the exclusive distributor of the iZettle card reader in the UK. Swedish mobile payment provider iZettle combines card reader hardware and a downloadable app, to enable smartphones and tablets to take debit or credit card payments.
Gerry McQuade, chief commercial officer for non-consumer mobile at EE, said that the deal represented additional value for the firm’s one million plus SME customers, and that the deal had been a long time in the planning. “iZettle has been part of the plan for a year,” McQuade said at a launch event in London on Tuesday. “Our strategy is to look beyond mobile, and the simplicity and innovation of iZettle are market leading.”
The commercial nature of the relationship between the two firms is unclear. McQuade declined to comment and iZettle founder Jacob de Greer told Telecoms.com only that “there is a business model in regards to the distribution of the readers but that is between us and EE.” He stressed the importance of EE’s retail presence as a distribution channel. “They have 297 stores across the UK, they have a great user base with lots of SMEs already, and they’re going for the same kind of merchants that we want to go for,” he said.
The exclusivity arrangement has a limited time frame, although neither firm disclosed its duration. While EE might have exclusivity over the sale of the card readers, which cost £20 and come with a £20 voucher redeemable against future transaction charges, and so are essentially free to the purchaser, the devices are compatible with handsets on any network.
The margins on payments are notoriously slim, with iZettle charging its merchants 2.75 per cent of the value of each transaction. Out of this slice the Swedish firm has to pay its merchant acquirers as well as derive its own revenue stream.
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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