CMA raises PayPal/iZettle merger concerns

The Competition and Markets Authority (CMA) says that PayPal’s takeover of Swedish startup iZettle could lead to higher prices or reduce the range of services for customers. 

The deal, which completed in September, brings together the two largest suppliers of mPoS devices in the UK. After completing its Phase 1 investigation, the CMA has found that PayPal could now face insufficient competition in the UK. It has also considered the potential impact of the merger on the emerging market for omnichannel payment services, where PayPal has already established a strong position.

Andrea Gomes da Silva, CMA Executive Director, says: “Payment services markets are evolving so it’s particularly important to look to the future when we assess competition and the effects of mergers on customers. While iZettle is a relatively recent entrant to payment services, it has already established a market-leading position in mPOS devices and was well-placed to compete against PayPal in other emerging markets. That’s why we are concerned that PayPal’s takeover could lead to higher prices or reduce the quality of the services available to customers.”

If PayPal and iZettle are unable to address the CMA’s concerns, a Phase 2 investigation will be green lighted.

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