PayPal agrees to buy Sweden's iZettle in $2.2 billion deal

PayPal agrees to buy Sweden's iZettle in $2.2 billion deal

PayPal, based in San Jose, California, says Stockholm-based iZettle is on pace to process about $6 billion in payments this year.

The prospect of battling Square and PayPal for the hearts and minds and wallets of retailers - and with far fewer financial resources - meant iZettle executives would have had to do one hell of a selling job to make the IPO a success, let alone ensure the company would continue growing and reach profitability.

PayPal stock jumped almost 2% when reports of the deal first surfaced.

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 USA -based Square Inc the company founded by Twitter CEO Jack Dorsey, according to Reuters. A merger would catapult PayPal into hundreds of thousands of brick-and-mortar storefronts globally in an effort to bring its digital payments tool into physical retailers and compete with companies, like Square.

Dan Schulman said in the statement, "iZettle and PayPal are a strong strategic fit, with a shared mission, values, and culture - and complementary product offerings and geographies".

The price being paid by PayPal - itself valued at more than $90bn (£66bn) - is double the valuation that iZettle was reported to be seeking from a listing on Nasdaq Stockholm. Today, small-business owners around the world use iZettle's powerfully simple services to improve the speed and ease of payments at checkout, business management, sales analytics, customer engagement, and funding. The combination will give PayPal in-store capabilities in 11 markets including Brazil, Nordic countries, France, and Mexico. The deal will be closed in all-cash, and it is expected to help the company to provide a better service, worldwide. The company expects to generate gross revenues of around $165m this year, with approximately $6bn of total payment volume expected to be processed on its platform. The completion of this transaction is subject to customary closing conditions, including regulatory approvals.

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