CMA gives green light to PayPal, iZettle mega merger

The Competition and Markets Authority (CMA) has provisionally cleared PayPal’s $2.2 billion takeover of iZettle, concluding that the merged group would still face “significant competition” from the likes of Worldpay and Square. Its final decision is expected by mid-June.

PayPal bought the Swedish startup last year, but the CMA expressed concerns over the overlap between the two companies, which both provide mobile point of sale (mPOS) devices that enable businesses to take ‘offline’ payments through a card reader connected to a smartphone or tablet. It had referred the deal to a Phase 2 investigation after PayPal failed to offer what it termed "acceptable ways" to address its concerns.

“As iZettle is a relatively recent entrant to payment services, and PayPal had pre-existing plans to invest in its product offering, it has been particularly important for us to verify in detail what could have happened had iZettle not been taken over,” said Kirstin Baker, the inquiry chair.

“While they are two of the main suppliers of mPOS devices, the additional evidence we have analysed indicates that the distinctions between these and ‘traditional’ point of service devices are reducing over time and that large numbers of customers can and do switch to ‘traditional’ point of service devices.”

"We are pleased the CMA has provisionally cleared our transaction," commented Dan Schulman, President and CEO, PayPal. “We look forward to adding iZettle’s products and services to our platform to help small businesses access even more affordable tools to run their shops and compete against the retail giants.”