PayPal will spend $2.2 billion to buy the Square of Europe — iZettle — in its biggest acquisition ever

PayPal said on Thursday that it planned to spend $2.2 billion to buy iZettle, a European payments company that provides point-of-sale software and other services to brick-and-mortar shops.

The proposed deal, the largest in PayPal’s history, would give the company a stronger foothold in Europe and a real in presence brick-and-mortar retail where it will compete against companies like U.S.-based Square, which has executed well in building out a strong suite of financial services beyond its original point-of-sale system on its way to a market cap of more than $21 billion.

iZettle, based in Stockholm, Sweden, had said just this month that it intended to soon go public. But the Financial Times reported that PayPal swooped in with an offer that was around double what iZettle hoped to be valued at in its IPO.

While PayPal is a giant player in online commerce, it has struggled to crack brick-and-mortar retail, where the vast majority of transactions still occur. Products such as PayPal Here, a credit card reader that pairs with a point-of-sale app, have not found wide adoption.

Last month, iZettle announced the launch of e-commerce products to help small businesses set up online shops and accept digital payments. It’s unclear if its online commerce strategy will change now that it is being absorbed by a much more experienced company in that space.

PayPal’s stock rose nearly 2 percent on the news, while Square’s stock dropped more than 3 percent. PayPal’s stock is up 60 percent over the last year, fueled in part by strong growth in mobile commerce thanks to its Braintree unit.

This article originally appeared on Recode.net.

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