PayPal has purchased mobile payments company, iZettle, for $2.2bn (£1.6bn). The Swedish company, known for providing card-readers to small businesses is expected to provide a valued boost to PayPal’s retail industry presence – giving it a strong role in 11 markets in both Europe and Latin America.

This comes just three weeks after iZettle announced it would list shares in hopes of raising money and continuing its expansion.

From Humble Beginnings

iZettle was founded in 2010 and initially began selling credit and debit card readers that could be plugged into tablets and smartphones. This innovative payment system made it extremely popular with small businesses around the world. The card-reader product is used by thousands of businesses and traders in 12 countries across Europe, Mexico and Brazil.

In 2016, the firm said it was growing at a meteoric rate, with 1,000 new customers signing up every day. It was this staggering growth that led PayPal to take interest in the Swedish company.

PayPal President Dan Schulman believes the combination of iZettle’s expertise and finely-tuned brand, along with the industry clout of PayPal could prove to be a great service for customers worldwide. He said: “This combination brings together iZettle’s in-store expertise, recognised brand and digital marketing strength with PayPal’s global scale, mobile and online payments leadership, and trusted brand reputation.”

Increased Competition

PayPal boasts over 200 million active customer accounts, but increased competition from major banks and companies such as Apple means the US-based firm has been forced to improve the scale of its digital services. PayPal already owns popular US peer-to-peer payments company, Venmo and last year acquired business loan company, Swift Financial.

This move comes after eBay announced in February that it would no longer us PayPal as its main payment processing partner, instead opting to link with up Dutch rival, Adyen. PayPal also looks set to do battle with Twitter Co-Founder Jack Dorsey’s mobile payments app, Square, in the coming months.

Square’s stocks surged more than 175% in 2017 and, with companies such as Microsoft and even Facebook looking to move into the digital payments industry, PayPal faces a tough battle in the near future.