Dive Brief:

• PayPal is moving forward on what would be its largest-ever acquisition — the $2.2 billion purchase of Sweden-based iZettle, a small business commerce platform that has quickly risen to prominence in Europe and Latin America, and which could help PayPal greatly expand its in-store POS presence, according to a PayPal press release.

• IZettle has merchant customers in 12 countries, and a physical in-store POS presence in Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden.

• The company, which reportedly was moving toward an IPO at the time of the acquisition, has "nearly a half million merchants" on its platform, and expects to process about $6 billion worth of transactions during 2018, and bring in revenue of around $165 million, according to PayPal.

Dive Insight:

In the last five years, starting with the 2013 purchase of Braintree, which brought the wildly successful Venmo into the fold, PayPal has made at least a half dozen acquisitions, according to a Forbes history of its deals.

Many of these acquisitions were focused on expanding mobile payments or extending PayPal’s reach to online merchants in new markets, but more recently PayPal has been looking to grow its in-store presence. Those efforts included last year’s launch of a physical cash-back credit card for in-store transactions.

The iZettle deal takes PayPal further in that direction, and adds fuel to PayPal’s international growth efforts. In addition to the in-store presence it will gain immediately in all the countries mentioned above, this deal likely will accelerate near-term in-store expansion opportunities into other existing PayPal markets, and boosts efforts to expand other omnichannel commerce solutions in Australia, U.K. and the U.S, PayPal said.

On top all that, this deal also seems like a direct competitive challenge to Square’s success with small merchants. It comes as Square reportedly has had success with its own person-to-person payments app (to the tune of 7 million users at the end of 2017, according to Recode), a direct competitor to PayPal’s Venmo.

The company plans to offer more details on the acquisition at its Investor Day event on Thursday in San Francisco. Retailers of all sizes may be warming up to the notion that they need to accept many different forms of payment online, via mobile and in-store to be as convenient as possible to their customers. PayPal increasingly is arming itself to compete on all three battlefields in a very crowded and competitive payments space.