PayPal to buy Square competitor iZettle for $2.2B

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PayPal has agreed to buy Swedish payments group iZettle for $2.2bn, in a deal that will "significantly" expand its in-store presence.

According to a statement by the two companies, iZettle expects to generate gross revenue of about $165 million in 2018, with roughly $6 billion of total payment volume expected to be processed on its platform.

The acquisition is the largest in PayPal's history and is for a company that is still making a loss. However, all of them will be now reporting to Paypal's COO Bill Ready.

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.

The deal will have forced PayPal's hand for years.

TechCrunch also points out that some of iZettle's key markets such as northern Europe and Latin America, the latter through a tie-up with Santander, will introduce Paypal to areas where it has no presence. "iZettle and PayPal are a strategic fit, with a shared mission, values and culture-and complementary product offerings and geographies".

IZettle is best known for offering small businesses a mini credit card reader that can turn smartphones and tablets into payment registers, akin to that offered by US -based Square Inc (SQ.N), the company founded by Twitter (TWTR.N) Chief Executive Officer Jack Dorsey.

"As the digital economy gathers speed, we are excited to provide new and innovative capabilities to better serve our consumer and merchant customers", said Dan Schulman, PayPal's president and CEO, said. "With almost half a million merchants on their platform, Jacob de Geer and his team add best-in-class capabilities and talent that will expand PayPal's market opportunity to be a global one-stop solution for omnichannel commerce".

The tie-up with iZettle will increase PayPal's capacity with firms with physical retail operations.