PayPal has agreed to acquire Swedish mobile payments company iZettle in a deal worth $2.2bn (£1.6bn).

The deal expands PayPal's in-store offering in 11 markets across Europe and Latin America, and comes just weeks after iZettle said it would list shares in Stockholm.

PayPal chief executive and president Dan Schulman said the company is continuing to expand its platform to help small businesses “compete and win” online, in-store and via mobile.

He added: "iZettle and PayPal are 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.

"With nearly half a million merchants on their platform, Jacob de Geer and his team add best-in-class capabilities and talent that will expand PayPal’s market opportunity to be a global one-stop solution for omnichannel commerce."

iZettle was founded in 2010 and expects to generate gross revenues of $165m in 2018.

CEO Jacob 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.

"The combination of iZettle and PayPal will provide tremendous benefits to our merchants who will have access to an even wider range of tools to help them get paid, sell smarter and grow."