The deal will enable PayPal to expand its presence in in-store payments globally, and will mark the largest-ever acquisition by the United States fintech giant, Reuters reports.
Based in Stockholm, iZettle was founded in 2010 by Jacob de Geer and Magnus Nilsson with a mission to help small businesses "succeed in a world of giants" by levelling the playing field against bigger retailers.
The company has a presence in 11 countries and offers other services for small businesses such as lending.
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As per the deal, the position of iZettle's co-founder and CEO Jacob de Geer will remain intact. iZettle's entire executive team will also continue the operation as before.
The deal is the largest acquisition in PayPal's history. PayPal have seen some growth in this area but there is a lot of competition in the space with everyone from Square to Etsy offering solutions. "With almost half a million merchants on their platform, Jacob de Geer and his team add best-in-class capabilities and talent that will expand PayPal's market opportunity to be a global one-stop solution for omnichannel commerce". "The combination of iZettle and PayPal will provide tremendous benefits to our merchants who will have access to an even wider range of tools to help them get paid, sell smarter and grow".
Buying iZettle will expand PayPal's reach into shops in Brazil, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Spain and Sweden. Upon closing, iZettle will become the European center of excellence for PayPal's in-store product and services offerings.
On Thursday, Ghana's vice president, Dr Mahamudu Bawumia, said the country will plunge into the Paypal system by the first half of 2020.
PayPal hopes the transaction will close in the third quarter, the company announced.