The Competition and Markets Authority (CMA), the competition regulator in the UK, has provisionally given the go-ahead to PayPal’s acquisition of Swedish payments start-up iZettle.

The deal, valued at $2.2bn, was first announced in May last year.

However, the competition watchdog had concerns that the deal would lower competition in the supply of mobile point-of-sale (mPOS) devices in the UK.

Concerns were also raised regarding the acquisition’s effect on omni-channel payment services, where both the concerned parties are active.

In coming to its decision, the regulator evaluated various factors such as the deal’s rationale, and the commercial strategies of the two parties had the merger not materialised.

The regulator also took into account extensive evidence such as a survey of over 6,000 customers.

After the evaluation, CMA conceded that the merger does not raise competition concerns.

The watchdog came to the conclusion that even though iZettle and PayPal are two of the largest mPOS device suppliers, they will face competition from traditional POS device suppliers such as Worldpay and Barclaycard and other mPOS players like Square and SumUp.

Moreover, the regulator found that iZettle would have been a “marginal player” in the near future in the omni-channel space.

PayPal’s omni-channel efforts were also found to be facing competition from other significant players.

CMA inquiry chair Kirstin Baker said: “While iZettle and PayPal are 2 of the main suppliers of mobile point of service devices, the additional evidence we have analysed indicates that the distinctions between these and ‘traditional’ point of service devices are reducing over time and that large numbers of customers can and do switch to ‘traditional’ point of service devices.”