PayPal acquired Swedish start-up iZettle for $2.2bn as it aims to focus more on the small business community in Latin American and European countries.
PayPal announced the acquisition of Sweden based financial start-up iZettle which will help it gain a better foothold in the small and medium business segments. This should also be particularly applicable in Latin American and European countries. The deal is worth $2.2 billion and is the biggest that PayPal has ever got into.
The Swedish firm iZettle has to its credit both devices and services that let businesses accept payment directly via credit cards using smartphones. The company already has a strong market presence with more than half a million companies among its clients. That also is the precise reason the company got acquired by PayPal given how the latter has traditionally been less visible among the small business community and is keen to make up for the same.
PayPal also hopes that its new found focus and acquisition will help small businesses to have a greater chance of survival against the global giants of the likes of Amazon. For small companies, that is also akin to a battle of existence against major retailers, and they sure can count on the expertise and ease of operations that PayPal bring along.
The iZettle acquisition, however, won’t be a cakewalk for PayPal into its intended consumer base given that it will still have to ward off stiff competition from Square. Interestingly, Twitter CEO Jack Dorsey also happens to be a co-founder of Square and has a similar business profile as that of iZettle. However, Square has also been eyeing a similar business model as that of PayPal with its new business Square Cash. The same lets businesses and individuals conduct online transactions, with seven million already using the services.
However, Square will still have some catching up to do with PayPal considering that the latter accounted for $132 billion worth of payments in just the first quarter of 2018 alone. In contrast, Square’s volume stood at only $17.8 for the same period. On the other hand, iZettle has come to be valued at just about a shade more than a billion dollars, as is evident from its initial filing.