PayPal, Square and the fight for in-store payments
By Teamspirit on Tuesday, 22 May 2018
This weekend PayPal acquired Swedish fintech firm iZettle for $2.2 billion, marking a new focus on retail payments.
In recent years the online payments giant has faced increasing competition, as traditional banks improve their digital offering and tech players like Apple make moves into the payments space.
Faced with a decreasing market share, PayPal has opted to diversify. The California-based firm already owns peer-to-peer payments company Venmo, which has more than 7 million monthly users, and last year acquired business loan company Swift Financial. So the acquisition of iZettle, who make a smartphone-enabled card reader aimed at small businesses, makes sense.
But even for a company the size of PayPal, success in retail is by no means guaranteed. The tech giant will face competition from the likes of Square, owned by Twitter founder Jack Dorsey and backed by Visa, which currently enjoys dominance in the US and the rest of the English-speaking world.
Visa has also invested in another Swedish startup, Klarna, which provides online payments for merchants and is currently trialling a pay-later payment solution for physical stores.
iZettle has a strong foothold in Europe and Latin America. But with the backing of their wealthy new owners, you wouldn’t bet against them challenging Square’s market supremacy in the wider world.