PayPal has acquired Swedish mobile payments company, iZettle, for $2.2bn (£1.6bn). Founded in Stockholm in 2010, iZettle began by selling credit and debit card readers that could be plugged into smartphones and tablets for small businesses.
This move is expected to boost PayPal’s in-store presence at a time when competition in the online payments sector is actually on the rise.
When complete, the acquisition of iZettle will mean PayPal will have its in-store presence in 11 markets both across Europe and Latin America.
According to PayPal president Dan Schulman, “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.”
In addition, Dr. Pinar Ozcan, Associate Professor of Strategic Management, Warwick Business School, said: “The deal allows PayPal to develop omnichannel solutions for SMEs worldwide.
“This is particularly important as tech giants Apple, Amazon and Facebook are also growing in digital payments. Facebook Messenger payments has been active in Europe since late 2017, for instance.
“The acquisition also provides Paypal alternative growth paths after the Ebay announcement a few months ago that they were switching to Dutch firm Adyen as their main payment processing partner.
“Stockholm-based iZettle has been revolutionary in enabling SMEs in Europe and Latin America with mobile card readers for the past 8 years.
“Paypal’s move to buy iZettle is a potentially successful attempt to leapfrog ahead of the US-based competitor Square in the payment devices sector.
“This move also makes the face-off between US-based Square and European iZettle more interesting and on a more level playing field with Paypal strengthening iZettle’s position with resources and geographic reach.
“In a fast-moving game of musical chairs, Paypal is working hard not to be left out of the game.”