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PayPal buying iZettle for US$2.2b to compete with Square
PAYPAL Holdings Inc is buying Swedish small-business platform iZettle for US$2.2 billion to expand in Europe and Latin America and increase its presence in brick and mortar stores.
"Small businesses increasingly want a full suite of capabilities across channels, a one-stop stop," Dan Schulman, chief executive officer of PayPal, said. "iZettle was the perfect fit in many ways."
The deal is the biggest ever for San Jose, California-based PayPal and will help it to compete with Square Inc, which made a name for itself by helping small businesses and food-truck vendors conduct credit card and mobile transactions.
Founded in 2010 by Jacob de Geer and Magnus Nilsson, iZettle also started out with a mobile-phone gadget for accepting credit card payments. It then expanded into software and financing services to support small businesses.
PayPal said it hopes to be able to reap the advantages of the merger almost immediately in certain areas, and that the financial benefits will kick in shortly after the deal closes, expected in the third quarter. iZettle expects to generate gross revenue of about US$165 million in 2018, with roughly US$6 billion of total payment volume expected to be processed on its platform. BLOOMBERG