iZettle is introducing a cash advance service for merchants in Europe—much like rival payments upstart Square already does in the U.S.
Payments company iZettle said Friday that it has landed a new round of financing along with introducing a lending service for small businesses.
The Sweden-based company, which has been compared to the Square of Europe, has raised $67.5 million, led by previous investors Intel Capital and Zouk Capital. To date iZettle has raised $168 million from American Express, Index Ventures, MasterCard and others.
Similar to Square, iZettle sells merchants credit card readers that connect to mobile phones and tablets. An additional app includes a dashboard that lets merchants access data like daily sales and best-selling products.
While Square has created a foothold among small businesses in the U.S., iZettle has targeted businesses in Europe and Latin America. IZettle says businesses can accept payments using its hardware and software in 11 countries including Sweden, Norway, Denmark, Finland, U.K., Germany, Spain, Mexico and Brazil.
Along with the new round of funding, iZettle has also introduced a lending service for small businesses that is similar to Square’s cash advance business, Square Capital. Square has said that its cash advance arm is now one of the most successful businesses besides payments.
iZettle Advance lets merchants to obtain get cash advances, and pay back the money in small increments based on a percentage of daily sales through credit cards. Similar to Square Capital, businesses do not apply for the cash advances. Instead, iZettle approaches those it determines are eligible based on sales data. The advance comes with a fixed fee that is also payable over a certain period.
Like Square, iZettle’s decision to offer cash advances is another potential source of revenue beyond payments. iZettle is reportedly much smaller than Square in terms of businesses using its point of sale register. Square has said previously that millions of merchants are using its payments technology.
Of course, it’s likely only a matter of time before Square expands into more international markets and into iZettle’s turf in Europe. Currently, Square is available in Japan and Canada.
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