PayPal's acquisition of iZettle is getting closer to completion after U.K.'s competition regulator dropped its opposition to the $2.2 billion deal.
According to a report in the Financial Times, the U.K.’s Competition and Markets Authority (CMA) found that the combined company would still have to contend with significant competition from the likes of Worldpay and Square. PayPal had to stop integration of iZettle in 2018 after the CMA said the tie-up could result in a company with too much dominance in the mobile point of sale terminals market. The devices enable merchants to accept card payments via smartphone.
The CMA reversed course on Tuesday (April 30), giving the deal provisional approval. The decision comes after an inquiry found that Barclaycard and Worldpay would be fierce competitors against a combined PayPal and iZettle. What's more, the CMA found the combined company also faces competition from Square and SumUp, both mobile payment-focused companies.
“We are pleased the CMA has provisionally cleared our transaction. 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," PayPal Chief Executive Dan Schulman said in a statement, reported the FT.
The deal between PayPal and iZettle will enable the Swedish payments company to ramp up expansion efforts in global markets, including the U.S., while PayPal gains entry to the international retail payment terminals business, a market where competitor Square already has a foothold.
The deal has also sparked talk that other payment companies could look to make their own buys. Recent media reports pointed to Worldpay, Global Payments and Total System among those that could look to purchase smaller players. Targets bandied about include ShopKeep, Bindo Labs and Adyen. Earlier this year, Fiserv inked a $22 billion deal to purchase First Data.