The UK competition watchdog, Competition and Markets Authority (CMA), announced that it will launch an in-depth investigation into PayPal’s acquisition of Swedish financial technology firm iZettle.
Image: CMA has referred PayPal’s takeover of iZettle to in-depth investigation. Photo: courtesy of Crown copyright.
At the end of November, the CMA has raised its concerns over PayPal’s takeover of iZettle.
The UK regulator, which has completed first phase investigation into the deal, has found that PayPal could face insufficient competition in the UK for mobile point of sale devices.
The regulator also believes that the merger will negatively impact future competition in the emerging market for omni-channel payment services, enabling to make customers pay higher prices and receive lower quality service.
CMA noted that it would refer the deal for an in-depth phase 2 investigation, if PayPal fails to show acceptable ways to address its concerns.
The merger will now be referred for a phase 2 investigation by an independent group of CMA panel members, as PayPal has chosen not to provide proposals to address the regulator’s concerns.
The 21 May 2019 is the deadline for the final decision, said the CMA.
In May this year, PayPal agreed to acquire financial technology firm, iZettle, in a deal valued at $2.2bn.
In September, PayPal has completed the acquisition of iZettle, which offers a range of payment and commerce solutions, including payments, point of sales, funding and partners applications.
iZettle launched the world’s first mini chip card reader and software for mobile devices, which revolutionized mobile payments.
The acquired business allows PayPal to expand its in-store presence and strengthen its platform to better serve small businesses across the globe. The deal enables iZettle to make use of PayPal’s 19 million merchant relationships.
iZettle will serve as an European center of excellence for PayPal’s in-store product and services offerings, after completion of the deal.
PayPal’s digital payments platform, including Braintree, Venmo and Xoom, is available in more than 200 markets across the globe.
The platform enables consumers and merchants to receive money in over 100 currencies, withdraw funds in 56 currencies and hold balances in their PayPal accounts in 25 currencies.