PayPal has bought iZettle, a Swedish mobile payments company that sells a card-reader aimed at small businesses, for $2.2bn (£1.6bn). US-based PayPal, a unit of eBay, said that its biggest acquisition to date would strengthen its platform for handling payment transactions at small businesses, particularly in Europe and Latin America. The chip-card reader and its app for smartphone-based mobile commerce meet global security standards. iZettle's service is available in 12 countries which includes United Kingdom, Finland, Denmark, Germany, Italy, Netherlands, Spain, Italy, Germany, and Brazil, among others.
By joining forces with PayPal, which operates in 200 countries, iZettle will be able to accelerate its worldwide expansion, including to the United States, the companies said.
Jacob de Geer, the chief executive officer of iZettle, will stay on-board to lead the business, reporting to Bill Ready, the chief operating officer of PayPal. It would be the largest ever deal for PayPal, Bloomberg reported.
The companies said on Thursday, May 17, 2018, that the deal will strengthen their platform to help millions of small businesses around the world grow and thrive in an omni-channel retail environment. 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 deal happened just before iZettle was set to go public on Nasdaq Stockholm. Upon closing, iZettle will become the European center of excellence for PayPal's in-store product and services offerings.
PayPal president Dan Schulman said: "This combination brings together iZettle's in-store expertise, recognised brand and digital marketing strength with PayPal's global scale, mobile and online payments leadership, and trusted brand reputation". The company said it expects to reach profitability by the year 2020. Close sources claim that the IPO filing forced Paypal management to speed up the acquisition process. "But this is a very exciting way for the company to continue its vision".