European payments firm iZettle launched a platform Thursday that lets merchants set up online stores, in its biggest product release since 2011.



The fintech firm is known for its mini card readers and payment processing technology, similar to Square in the U.S.

But it is now looking to expand its offering as competition heats up in Europe.

The e-commerce platform will allow a merchant to create an online store, accept payments, and also link inventory from its physical store.

Small businesses find it complex to begin selling online, according to iZettle CEO Jacob de Geer.

"The bigger point here is that it is already integrated with offline point of sale that we also provide. The complexity that lies in that combination is inventory. All businesses want to sell online, but they get into the complexity of how much you have in stock, if you sell something online versus offline," de Geer told CNBC in a phone interview.

"That entire product suite is extremely helpful and neatly done and packaged in a fantastic way."

The Swedish firm has been trialing the product in Sweden and the U.K. and will launch it in these territories first. iZettle makes money from taking a cut of payments, but it will also charge £30 ($42) a month for the e-commerce platform.

De Geer said half the merchants using iZettle right now don't have an online footprint and he estimated 28 million potential businesses could use the company's service. The CEO also said the company is onboarding 1,000 small businesses to its platform a day, but declined to give a total figure for the number of merchants that are customers.

"The opportunity we are looking at and how we can drive ARPU (average revenue per user) is in terms of increased payment volume combined with a monthly fee for having a full sales service for the online world," de Geer said.

With the product launch, iZettle is taking on the likes of Shopify and to an extent Amazon, which allows third parties to sell via its platform. But iZettle is allowing users to create custom shopfronts online.

iZettle is facing increased competition in Europe. Last year, U.S. rival Square launched its payments and card reader service in the U.K. It also has an e-commerce platform available in the U.K.

Correction: This article has been updated to reflect that Square has an e-commerce offering available in the U.K.