FORMER EBAY BAE PayPal has announced that it will buy mobile payment company iZettle in a multi-billion dollar deal.
PayPal, which remains limited in its point-of-sale offerings, has agreed to a $2.2bn all-cash deal for the Swedish start-up which offers cheap, simple card readers to small businesses in the vein of Stripe and Jack Dorsey’s Square.
PayPal has been forced to look at a revised business model for itself after the split from eBay, and the more recent news that it will be usurped as the main payment method of payment on the bric-a-brac site.
Up to now, although it has a limited presence in the area of point-of-sale, it doesn’t have the same infrastructure of its potential rivals, whereas iZettle is becoming increasingly popular for pop-ups, markets and small businesses where a landline connected merchant is less appealing.
iZettle was planning an IPO which would have raised around $1.1bn on the Stockholm NASDAQ, making the PayPal payout a no-brainer for investors.
The deal will have forced PayPal’s hand for years. We understand that the two have been courting for years but PayPal has been playing hardball until its hand was forced.
TechCrunch also points out that some of iZettle’s key markets such as northern Europe and Latin America, the latter through a tie-up with Santander, will introduce Paypal to areas where it has no presence.
“Small businesses are the engine of the global economy and we are continuing to expand our platform to help them compete and win online, in-store and via mobile,” said PayPal president and CEO Dan Schulman. “iZettle and PayPal are a strategic fit, with a shared mission, values and culture—and complementary product offerings and geographies.
“In today’s digital world, consumers want to be able to buy when, where and how they want. With nearly half a million merchants on their platform, Jacob de Geer and his team add best-in-class capabilities and talent that will expand PayPal’s market opportunity to be a global one-stop solution for omnichannel commerce.”
Meanwhile in the UK, Square is already in situ along with an increasing number of smaller players like SumUp. Paypal will be wanting to get their hand in before even more arrive. µ
Source : Inquirer