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Paypal’s iZettle acquisition raises merchants’ concerns on an imbalance of prices and quality of services

By Sasha Fedorenko November 27, 2018 - 4:37 pm

PayPal acquisition of iZettle has put a spotlight on an imbalance of prices and quality of services for small and medium-sized businesses, says an investigation.

The news emerges as The Competition and Markets Authority (CMA) has been investigating the supplier’s $2.2bn (£1.73bn) merger of the Swedish mobile payments business, which in its Phase 1 of the enquiry said that PayPayl “could face insufficient competition in the UK after acquiring its market-leading rival.”

Payment services markets are evolving so it’s particularly important to look to the future when we assess competition and the effects of mergers on customers. While iZettle is a relatively recent entrant to payment services, it has already established a market-leading position in mobile point of sale devices and was well-placed to compete against PayPal in other emerging markets. That’s why we are concerned that PayPal’s takeover could lead to higher prices or reduce the quality of the services available to customers.”
-Andrea Gomes da Silva, executive director of CMA

The investigation suggests that iZettle’s acquisition by PayPal, which exposes the Swedish supplier to more than 19m seller relationships established by the online payment vendor, have lowered the supplier’s competitive advantage in the market. The CMA says that in its observation on the merger’s impact on the omnichannel, it said, if the acquisition didn’t take place iZettle would have held a strong competition against PayPal and possibly benefited merchants by delivering innovations and low prices.

These news mark the ending of CMA’s Phase 1 investigation on the merger deal, which saw in September 2018 bringing together the two leading suppliers of payments in the UK. The CMA warned that if the two businesses are unable to address the audit’s competition concerns, the acquisition deal will be moved on to an in-depth Phase 2 investigation to be conducted by the team of independent CMA panel members.

  • William
    11 months ago

    I am Puzzled by these comments, eBay has made it Mandatory for All UK sellers to have PayPal account, Sellers CANNOT use Any other payment Processor, I should Know, I have tried to use another payment processor, eBay refused to allow me to use Any other P/Processor. PayPal State in their User Agreement, All sellers who state they accept PayPal payments, MUST accept PayPal payments. PayPal Bought Braintree payment solutions for $800 Million Dollars in 2014, Why no enquiry over this company? it had its address at 5 New Street Square. London. had a office in Tottenham Court Rd. London. eBay has bought Motor. co in the UK, Who is going to be the payment processor?

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