PayPal, which remains limited in its point-of-sale offerings, has agreed to a $2.2bn all-cash deal for the Swedish start-up which offers cheap, simple card readers to small businesses in the vein of Stripe and Jack Dorsey's Square.
Since separating from online marketplace eBay in 2015, PayPal has reshaped itself from mostly processing transactions for its parent company online to offering a suite of digital payment services across the world. The small businesses are active across 11 countries, mostly in Europe, as well as Mexico and Brazil.
Paypal's acquisition of iZettle has also come at a time when the latter has already filed for an IPO in the Stockholm stock market for raising almost $227 million. With ever-increasing advancements in mobile payments, the deal would help Paypal to exert its dominance rightly in the European market. IZettle does not now face too much direct competition from its main rival, the NASDAQ-listed Square, as the companies' operations only really overlap in the UK.
"The global scale and 19 million merchant relationships that PayPal has enables us to move faster and reach further than ever before". As far as this acquisition is concerned, iZettle being part of PayPal would help the company to expand its service to Europe.
The acquisition, which is the largest in PayPal's history, will potentially catapult the company into hundreds of thousands of bricks-and-mortar retailers around the world. Close sources claim that the IPO filing forced Paypal management to speed up the acquisition process.
"Small businesses are the engine of the global economy and they are increasingly demanding a partner that can provide a one-stop solution to help them compete and win online, in store and via mobile. But this is a very exciting way for the company to continue its vision".