The UK’s antitrust watchdog has provisionally cleared PayPal’s $2.2bn (£1.7bn) takeover of Swedish start-up iZettle after an in-depth probe, saying competition had intensified in the payments sector in recent years.
The Competition & Markets Authority had been concerned over the overlap between the two companies, which both make mobile point of sale devices enabling businesses to take “offline” payments through a card reader which can be plugged into tablets or smartphones.
It had referred the deal to a Phase 2 investigation last December after PayPal failed to offer what it termed “acceptable ways” to address its concerns.
Kirstin Baker, who chaired the inquiry, said it had been “particularly important… to verify in detail what could have happened had iZettle not been taken over” given iZettle is a “relatively recent entrant to payment services, and PayPal had pre-existing plans to invest in its product offering”.
However, following the in-depth probe, the watchdog said it had now decided to provisionally clear the deal, finding that it did not raise competition concerns.
It said a number of new players, including Square and SumUp, had grown “significantly in recent years”, and that customers were also able to switch to using devices made by larger payment services companies such as Worldpay and Barclaycard, which together account for around two thirds of the market.
A final decision on the merger is expected in the middle of June.
The move will come as a relief to PayPal, given it had already completed the takeover last September and could have been forced to reverse the deal if it had been found to lessen competition in the market. The tie-up was PayPal’s largest ever deal, seeing it snap up one of the most successful fintech start-ups in Europe to date.
PayPal’s president and chief executive Dan Schulman said he looked “forward to adding iZettle’s products and services to [the company’s] platform”.
He said the company would continue to work with the CMA through the remainder of its review.
Date: May 03, 2019
Source: The Telegraph