PayPal is swooping for Swedish payments start-up iZettle in a $2.2bn (£1.6bn) all-cash deal, as it seeks to create a "one-stop shop" for transactions.

The deal will be PayPal's biggest purchase to date, gatecrashing plans by iZettle to float on the Nasdaq Stockholm in what would have been Europe's largest fintech IPO.

iZettle had only announced the IPO plans earlier this month, saying it would be the "way forward to support our growth" and provide access to capital markets. It had been seeking a $1.1bn valuation in the float.

However, in an interview with Bloomberg on Thursday, iZettle co-founder and chief executive Jacob de Geer said he had been convinced to instead agree a sale of the business after meeting with the executive team at PayPal.

He will remain at the helm of iZettle after the takeover, and will be reporting to PayPal chief operating officer Bill Ready.

Mr de Geer said: "Combining our assets and expertise with a global industry leader like PayPal allows us to deliver even more value to small businesses to help them succeed in a world of giants."