PayPal gains bigger in-store presence with $2.2B acquisition

PayPal gains bigger in-store presence with $2.2B acquisition

PayPal is splashing out $2.2 billion to buy iZettle, a small-business payment platform, in what will be the company's biggest acquisition yet.

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. 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 agreement was confirmed by a spokeswoman for PayPal.

IZettle, which provides mobile card readers and offers digital payment services to small businesses, is used by nearly half a million merchants.

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Being the biggest ever acquisition for Paypal, the payment giant is obviously taking a huge bet by acquiring the Stockholm headquarter startup. In its documentation filed ahead of its proposed stock market listing, iZettle made an underlying loss (Lbitda) of 73mln krona, or roughly £6.18mln or US$8.36mln, in the first three months of 2018. "iZettle and PayPal are a strategic fit, with a shared mission, values and culture-and complementary product offerings and geographies". The company declared that IZettle expects to generate $165 million revenue in 2018. It claimed more than 200 million active customer accounts at the end of previous year.

Jacob de Geer, iZettle's chief executive, said the deal would "provide tremendous benefits to our merchants who will have access to an even wider range of tools to help them get paid, sell smarter and grow".

"By joining the PayPal family we'll become iZettle with superpowers and jump on a fast track to realise our vision".

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PayPal hopes the transaction will close in the third quarter, the company announced.

PayPal bought out mobile payments startup Paydiant for $280 million in 2015, and it continues to operate as a PayPal unit under its own brand today.

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