PayPal to buy Square competitor iZettle for $2.2B

PayPal Holdings on Thursday said it would acquire Swedish point-of-purchase technology firm iZettle in a deal worth $2.2 billion.

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With the agreement, PayPay gains access to nearly 500,000 small businesses that use iZettle’s technology to process customer transactions involving credit cards. The small businesses are active across 11 countries, mostly in Europe, as well as Mexico and Brazil.

iZettle technology operates similarly to that of Square, Inc., the California-based financial services and mobile payment company founded by Twitter CEO Jack Dorsey. The acquisition sets up direct competition between PayPal and Square. The transaction ranks as the largest acquisition in PayPal’s history, The Wall Street Journal reported.

“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,” PayPal President and CEO Dan Schulman said in a press release. “iZettle and PayPal are a strategic fit, with a shared mission, values and culture—and complementary product offerings and geographies.”

iZettle expects to earn revenue of roughly $165 million in 2018 and process about $6 billion worth of transactions on its platform, according to a press release from the two companies. The company’s CEO, Jacob de Geer, will continue to lead the business under PayPal.