PayPal has sealed a deal to buy Swedish payments specialist iZettle for $2.2bn (£1.67bn) in a move designed to boost the range of services it offers small businesses.

The online payments giant confirmed its intention to buy Stockholm-based iZettle in May, in its biggest acquisition to date. The deal scuppered iZettle's previous plan to go public in what would have been Europe's largest financial technology Initial Public Offering (IPO).

iZettle provides credit card readers to small businesses across Europe and South America and has also been expanding into software and other financial services. PayPal has been looking to widen its presence in the point-of-sales payments market.

PayPal boss Dan Schulman called the purchase a "strategic fit, with a shared mission, values and culture – and complementary product offerings and geographies".

"In today’s digital world, consumers want to be able to buy when, where and how they want," he said.

In early 2018, iZettle said it planned to list on the Nasdaq Stockholm stock exchange and raise around SEK 2bn (£188mn), valuing the company at about £836mn.

This deal officially doubles the price of the business, and would boost iZettle's growth strategy to generat.

Jacob de Geer, co-founder and CEO of iZettle, will join PayPal and will continue to lead iZettle, reporting to chief operating officer Bill Ready.