Founded in 2010 by Jacob de Geer and Magnus Nilsson, iZettle also started out with a mobile-phone gadget for accepting credit card payments.
iZettle, which is based in Sweden, said last week it would list an IPO on the Nasdaq in Stockholm sometime this year, and said at the time it would not be pursuing a sale as alternative to an IPO.
IZettle, a mobile digital-payments processor, competes with the U.K.'s Square (SQ), Canada's Shopify (SHOP) and Brazil's PagSeguro Digital (PAGS) in various markets.
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Under the hood, the smartphone runs on the Qualcomm Snapdragon 450 Octa-core chipset, which is based on 14nm FinFET technology. Sensors on board the smartphone are an accelerometer, ambient light sensor, digital compass, gyroscope, and proximity sensor.
It was unclear on Thursday night whether Mr de Geer and his senior colleagues would remain with the business if a takeover by PayPal does go ahead, although sources indicated that they would be likely to.
USA -based PayPal already operates in more than 200 countries around the world but is working to expand its offerings. Paypal expects this huge bet to pay off by giving it a formidable presence in the point-of-sales market and a better standing against strong competitors such as Square Inc and Stripe Inc. "The combination of iZettle and PayPal will provide tremendous benefits to our merchants who will have access to an even wider range of tools to help them get paid, sell smarter and grow".
Under the leadership of CEO Dan Schulman, the company has been expanding aggressively through acquisitions and partnerships with large banks and technology firms including Bank of America Corp, JPMorgan Chase & Co, Apple Inc and Facebook Inc. The transaction is expected to close in the third quarter of 2018. J.P. Morgan Securities plc is acting as sole financial adviser to iZettle, while Gernandt & Danielsson is acting as its legal adviser.