Payment-processing powerhouse PayPal purchased Swedish mobile payment company iZettle for $2.2B, the largest acquisition in the company’s history.
With the purchase of iZettle, which offers mobile credit card payment and point of sale systems across Europe, PayPal hopes to swipe some of the small business market from its primary competitor, Square.
All the cool kids are Square
PayPal’s overall market cap ($94B) still dwarfs Square’s (around $19B), but it’s losing ground due to Square’s dominance among small businesses that rely on its “omni-channel” tools to process sales on and offline.
Traditionally, PayPal has processed payments for big companies like eBay (who ditched former subsidiary PayPal in February) — and it has only recently begun to tap the small business market.
But iZettle (often called the “Square of Europe”) will give PayPal crucial point-of-sale tools to help it cash in on transactions across the EU.
But the chip readers are just heating up
PayPal’s acquisition will give it a headstart, but Square debuted in the UK last month (its 5th country and 1st in Europe) and it plans on continuing to expand across Europe.
Last year was unexpectedly hot for PayPal (revenue grew 24%), but it still didn’t match an underperforming Square (whose revenue grew 33%).
