In its largest-ever transaction, PayPal is acquiring Swedish card-reader maker iZettle for $2.2 billion to expand its point-of-sale services for small businesses.

iZettle, which competes with Square, offers small, wireless chip readers that attach to smartphones and tablets along with a number of other payment processing products. It focuses on small-to-medium-sized firms while PayPal’s customers include some of the world’s largest retailers.

But the acquisition fits PayPal’s strategy of increasing its in-store presence amid growing competition in its legacy online payments business.

“Small businesses are the engine of the global economy and we are continuing to expand our platform to help them compete and win online, in-store and via mobile,” PayPal CEO Dan Schulman said in a news release. “iZettle and PayPal are a strategic fit, with a shared mission, values and culture — and complementary product offerings and geographies.”

iZettle’s in-store markets include several where PayPal doesn’t have an extensive offline presence, such as Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain, and Sweden.

“This phenomenon of in-store payments via mobile for small businesses, it’s a global phenomenon and there have been many players in the space,” PayPal Chief Operating Officer Bill Ready told CNBC. “Most of them though have been constrained to one or only a few countries.”

The deal comes on the heels of iZettle filing for an initial public offering in Stockholm earlier this month in its own bid to scale out its business. The firm grew revenues at a compound annual rate of approximately 60% from 2015 to 2017 and expects gross revenues of about $165 million this year.

iZettle CEO Jacob de Geer noted that PayPal “has in the area of 20 million merchants whereas iZettle has 500,000.”

PayPal’s previous largest acquisition was that of money-transfer startup Xoom for $890 million in 2015, followed by the purchase of Braintree and its Venmo business for $800 million in 2013. In online payments, TechCrunch reports, it is facing increased competition as more companies, including Apple and major banks, improve their digital offerings.

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