Mobile payments firm iZettle slashes transaction fees for small businesses

iZettle, a service that allows anyone to process mobile point of sale payments with little more than a smartphone or tablet connector, has announced that it will be dropping its UK transaction fees for small businesses who take over £2,000 a month.

The new 'Smart Rate' sales-based pricing model means the company's standard 2.75 per cent transaction fee will drop to as little as 1.5 per cent for high frequency users - the more transactions made through iZettle, the lower the transaction fees will be.

A business that processes over £5,000 a month through the service will now pay 1.92 per cent of the amount in transaction costs. For those who take £13,000 or above, the charge will drop to 1.5 per cent. The rate reduction applies to all cards and is automatically calculated by iZettle, with the savings sent back to the business at the end of every month.

"We see a great take-up on our Chip & PIN reader from small businesses processing high volumes of sales and we are extremely excited to be the first to bring this type of pricing model to these merchants," said Jacob de Geer, co-founder and CEO at iZettle.

"Our users don't have to do anything to take advantage of the new pricing as Smart Rate kicks in as soon as your payment levels go over £2,000."

iZettle was founded in 2010 in Sweden and is now available in the UK, Spain, Germany, Denmark, Norway, Finland and Mexico.