iZettle deal a good physical fit for PayPal

PayPal is set to become a significant in-store payments player with its iZettle acquisition, according to GlobalData.

“The deal is a strategic step for the company, crucial for its future growth. PayPal will now be able to compete with other payment tools (including cash, card and Apple Pay) at the Point of Sale and be able to accept in-store payments, in particular from small merchants,” says Vladimir Vukicevic, Head of Payments at GlobalData. ‘‘PayPal has a strong position in the online payments environment but so far it hasn’t had much success in growing its share of in-store payments. This acquisition will help to establish it as a significant player in the in-store payments environment, especially in Europe.”

This is its biggest ever transaction and comes on the heels of iZettle filing for an IPO earlier this month. PayPal has paid twice the expected IPO value, but Vukicevic believes that “the fast growth of iZettle over the last few years and the strategic opportunities created in the in-store payments space by this acquisition, makes it a good move for the company. Through establishing relationships with merchants, the acquisition will help it expand commercial payments and lending to small businesses especially in the physical retail sector.”

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