The mobile payments battle just intensified in the UK

 
Lynsey Barber
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Many small businesses use mobile point of sale devices to accept card transactions (Source: Getty)

iZettle is likely a familiar sight if you frequent small coffee shops or market stalls across the capital.

The tiny card reading machine has sprung up across the UK, making it easier for shops to offer customers the option of paying by card without having to invest in the pricey systems offered by the big tech companies.

Swedish born startup iZettle has been in the UK for nearly four years now - an eternity and then some in the fast moving world of tech startups.

Read more: We've already spent more via contactless than in all of 2015

But, it’s about to face some competition.

Shopify, a Canadian startup which went public on the New York and Toronto stock exchanges last year with a so-called unicorn valuation of more than $1bn, is launching in the UK.

It already boasts 30,000 sellers across the UK who use their other ecommerce tools and the market accounts for around 10 per cent of business already. But the launch of the card reader is its first major push in the UK and only its second market outside of North America for the device.

It works with iPhones and iPads, supporting payments made by contactless cards, chip and pin as well as Android and Apple Pay.

It comes as Square, the mobile payment firm set up by Twitter chief Jack Dorsey which recently floated, plans to launch in the UK in its first move into Europe.

Read more: Google's Apple Pay rival Android Pay is finally here

Square has already set up a company in the UK and gained authorisation from the financial regulator while it earlier this year named Lord Paul Deighton, a former commercial secretary to the Treasury to its board.

While Sweden's iZettle is the most established device in the UK, there is also competition from the London-based venture-backed startup SumUp, and PayPal Here.

Mobile point of sale terminals are expected to handle around 20 per cent of all retail transactions in the UK by 2021. That figure currently stands at just four per cent, according to Juniper Research. Meanwhile, contactless spending by consumers has rocketed, with spending hitting more than £9bn in the first six months of the year, already overtaking the entire spend of 2015.

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