Published on : May 21, 2018
In recent decades, the phenomenon of mobile payment has gathered steam rapidly among sellers and retailers in developing and developed regions. Once a lean-profit business, it grew popular with upping the level of convenience and security. Prominent providers of online payment system in have since then pouring in money to bolster their capabilities and scale, riding on the wave of recent spate of acquisitions and buyouts.
An acquisition of one-of-its kind that is making news recently in the online payment space is motivated by the move to gain a bigger slice of the physical retail pie. A prominent U.S.-based online payment firm with a global presence, PayPal Holdings Inc., announced recently that it has acquired Sweden-based small business commerce platform iZettle for a whopping sum of US$2.2 billion (£1.6 billion), considering the size of the financial technology startup. This is the largest acquisition made by the California-headquartered firm so far, with the key aim to fortify its presence in retail payment terminals market across the world, which still has a significant chunk of revenue.
Numerous Swedish Startups prefer being acquired by U.S. Tech Companies than to go for Stock Market Listing
Of note, the acquisition follows the plan Stockholm-based startup had to go public. With presence in numerous countries in Europe and Latin America, iZettle will be able to expand into the U.S. market. The company is known for offering a tiny credit card reader that enables smartphones and tablets to act as payment registers.
The current development underlines the inclination of several Swedish start-ups to prefer being acquired by large U.S. technology company than to going public through IPO. Among the recent in making such moves includes Skype, Mojang, and Minecraft.
Recent Acquisition to enable PayPal to put Tough Competition to Square Inc.
PayPal on the other hand has gained traction among merchants and customers by offering a vast assortment of digital payment services. Over the past few years, the company has consolidated its presence in the online payment space by making strategic partnerships.
The move is also significant considering it will able to put up a tough competition to Square Inc., a Silicon Valley firm that has a marked presence as financial services, merchant services aggregator.