PayPal to buy Swedish payments group iZettle for $2.2bn

PayPal has agreed to buy Swedish payments group iZettle for $2.2bn, in a deal that will "significantly" expand its in-store presence.

Founded in Stockholm in 2010, iZettle claims to have revolutionised mobile payments with the world's first mini chip card reader and software for mobile devices. 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.

PayPal president and chief executive Dan Schulman said: "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.

"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."

Upon closing of the deal, PayPal will gain in-store capabilities in Brazil, Denmark, Finland, France, Germany, Italy, Mexico,Netherlands, Norway, Spain and Sweden. It will also gain near-term in-store expansion opportunities into other existing PayPal markets, and acceleration of omnichannel commerce solutions in Australia, the UK and the US.

iZettle CEO Jacob de Greer said: "Combining our assets and expertise with a global industry leader like PayPal allows us to deliver even more value to small businesses to help them succeed in a world of giants. 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."

The deal, which is due to close in the third quarter, is expected to be around $0.01 dilutive to PayPal's previously communicated full year 2018 non-GAAP earnings per share.