PayPal Acquires iZettle, A Rival Of Square, Shopify, PagSeguro

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PayPal is swooping for Swedish payments start-up iZettle in a $2.2bn (£1.6bn) all-cash deal, as it seeks to create a "one-stop shop" for transactions.

iZettle was founded in 2010 with an aim to offer plethora of affordable financial services like point-of-sales and partner application to small businesses.

The deal will enable PayPal to expand its presence in in-store payments globally, and will mark the largest-ever acquisition by the U.S. fintech giant, Reuters reports. "iZettle and PayPal are a strategic fit, with a shared mission, values and culture-and complementary product offerings and geographies". The company's CEO, Jacob de Geer, will continue to lead the business under PayPal.

The iZettle platform for handling retail transactions is used by almost a half million merchants, according to PayPal.

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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. The small businesses are active across 11 countries, mostly in Europe, as well as Mexico and Brazil. "The combination of iZettle and PayPal will 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".

PayPal, based in San Jose, California, says Stockholm-based iZettle is on pace to process about $6 billion in payments this year. The company has grown its revenues at a CAGR of approximately 60% from 2015 to 2017. iZettle expects to reach EBITDA profitability by 2020 on a standalone basis.

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

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