Paypal is gaining ground after announcing its $2.2 billion acquisition of a European competitor of Square (PYPL, SQ)

Paypal is up almost 2% in pre-market trading after announcing it will pay $2.2 billion to acquire iZettle. The Stockholm-based payments company offers mini credit card readers that allow smartphones and tablets to take payments, making it a competitor to Square. The deal, if closed, would be Paypal’s largest acquisition, putting it in the point-of-sale business.

“The deal allows PYPL to offer an increasingly-critical omni-channel solution to merchants in those markets,” Jefferies analyst Ramsey El-Assal wrote in a note to clients. “We are not surprised to see PYPL put its impressive balance sheet to work for strategic M&A.”

iZettle would further Paypal’s effort to offer its merchants an omni-channel solution where payments can be made online as well as in-store, he wrote.

In addition, the deal opens up doors for both companies to have more of an international presence according to El-Assal.

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