IZettle sells card readers that connect to smartphones or tablets, helping small companies to avoid some of the prohibitive costs associated with taking card payments. The company also offers services such as cash advances and an ecommerce offering in a bid to provide a full-fledged commerce platform for small businesses.
iZettle CEO Jacob de Greer and the company's management team will continue to lead the business, which expects to process US$6 billion in payments in 2018, the report said.
PayPal is buying Swedish fintech startup iZettle for $2.2 billion ahead of IPO.
Dan announced that it is the largest acquisition in PayPal's history and that it will significantly expand the company's "in-store presence around the world, strengthening our platform to help millions of small businesses around the world grow and thrive in an omnichannel retail environment".
Stockholm-based iZettle is present in 11 countries. "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". It has since expanded into financing services, with a presence in Brazil, Mexico and Europe. Today, the company's commerce solutions empower almost half a million merchants across 12 countries and two continents to get paid, sell smarter and grow their businesses.
"The opportunity to become part of PayPal was too good to pass up", he said, "The global scale and 19 million merchant relationships that PayPal has enables us to move faster and reach further than ever before".
Nasdaq-listed PayPal is a giant in the sector, disclosing in first quarter results last month that it processed $49bn (£36.3bn) in mobile payments during the three months to 31 March.
The deal will have forced PayPal's hand for years.
Evercore is acting as sole financial adviser to PayPal, and Skadden, Arps, Slate, Meagher & Flom LLP and Roschier are acting as its legal advisers with regard to the transaction.