LONDON — Seeking to extend its global reach, PayPal has reached a deal to buy iZettle, Europe’s answer to the mobile payments company Square, for about $2.2 billion.
The deal would be the company’s biggest takeover — and would underscore the arms race in the world of payments, especially as digital and mobile transactions are increasingly being adopted across the world. The agreement was confirmed Thursday by Amanda Miller, a spokeswoman for PayPal.
“Small businesses are the engine of the global economy and we are continuing to expand our platform to help them compete and win online, in-store and via mobile,” said PayPal’s chief executive, Dan Schulman.
The talks were earlier reported by Sky News. IZettle did not respond to a request for comment.
The agreement is the latest example of a promising European start-up selling itself to a larger American company. Amazon, Apple, Google, Facebook and Microsoft have all used acquisitions in the region to gobble up promising technology and sought-after engineers. Past deals include Google’s purchase of the London-based artificial intelligence start-up DeepMind; Microsoft’s acquisition of Mojang, the Swedish maker of popular video game “Minecraft”; and Apple’s deal for the music-recognition company Shazam and digital-assistant maker VocalIQ, both of which started in Europe.
The trend is troubling for European policymakers who have been eager to develop a homegrown tech sector that has lagged the United States and China.
Founded eight years ago and based in Stockholm, iZettle began as a maker of products like credit card readers. But it has expanded its offerings to analytics software and even small business loans, giving it a strong foothold among such companies in Europe and Latin America.
Last week, it filed to go public, announcing plans to list itself on the Nasdaq Stockholm stock exchange, with ambitions for a $1.1 billion valuation. Among its existing investors are Mastercard and American Express, as well as the venture capital firm Index Ventures.
The purchase would boost PayPal’s international expansion, and help it compete with Square, which has focused on processing payments for small businesses. Both companies are trying to capitalize on the growing volume of purchases being made on mobile phones and the internet.
Michael J. de la Merced reported from London and Nathaniel Popper from New York. Adam Satariano contributed reporting from London.