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21 May 2018

PayPal is Buying iZettle, Changing the Landscape of Online and Small Business Payments.

Back then you needed a ton of paperwork just to have a card reader from any bank. Now, these two companies want to alter that path.

Founded in 2010 by Jacob de Geer and Magnus Nilsson, iZettle is a financial technology company that seeks to help small businesses by simplifying and democratizing payments, offering various types of services in three areas:

  • Debit/credit card reader: A device that allows payments via chip and PIN plastics from major card providers like MasterCard, American Express, Visa and others. Since 2015 they have integrated new advancements like audio jack connection, Bluetooth and contactless technology.
  • Software: Used to manage and analyze all data about the sales you make through the reader.
  • Loans: Financial services based on what you’ve been sold, with a repayment system tied to the same sales history. Only available in Europe.

The PayPal Connection

PayPal as an online payment service also, does not only want to buy iZettle, actually is paying the double of this company valuation ($1.1 billion) at $2.2 billion just to secure the deal. Experts are in awe and considering it “expensive” and “unbelievable”.

Looking closely, this buyout makes a lot of sense for various reasons. PayPal has been distancing itself from online stores for a while, < ahref="https://www.ebayinc.com/stories/news/ebay-paypal-become-independent-companies-2015/">the most famous example was its separation from eBay in 2015. So now, with this new acquisition PayPal wants to enter in new markets and technologies reclaiming a space via in-store physical presence.

When the deal gets done, the two companies will undoubtedly market these services to the United States (being the main core market of PayPal), but also in new territories like: Sweden, Netherlands, Norway, Spain, Brazil, Denmark, Finland, France, Germany, Italy and Mexico. Covering online, mobile and physical payments in order to gain extraordinary fees in the long term.

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