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Reports suggest Paypal is gearing up to purchase mobile payment service Square.

The talks come as Paypal prepares to split from eBay in 2015, allowing it to take on competitors like Apply Pay more easily.

And by purchasing Square, the company seems to be gearing up to give its users access to faster and easier transactions.

Paypal (stock image of app shown) is gearing up to acquire San Francisco-based start-up Square, which lets people make payments over their phone by linking their cards. A recent valuation suggests it is worth more than £3.8bn ($6bn). The mobile service would help Paypal take on competitors like Apple Pay

According to Bank Innovation the talks are in early stages but have been described as 'serious'.

With Paypal apparently looking to move into the mobile payments business, the merger would allow the company to get a leg up on its competition.

San Francisco-based Square lets users make payments via their phone.

A debit or credit card can be linked to your device, and money can then be sent to any email address or other services.

It was founded in 2009 by Twitter co-founder Jack Dorsey.

The first app and service for Square launched in 2010, and it is now predicted to be worth more than £3.8 billion ($6 billion).

That's based on a recent valuation after they raised $150 million, reported the New York Times.

The merger would seemingly help both in the face of mounting competition from Apple Pay and elsewhere.

CEO Jack Dorsey took to Twitter to deny that any merger was imminent, saying the news was 'false'.

However Bank Innovation notes that the company denied similar reports that Google was attempting to acquire the company earlier this year, despite confirmations from elsewhere.

PayPal's impending split from long-time partner eBay, meanwhile, is expected to ratchet up its appeal to online retail competitors such as Amazon.com and give it the freedom to aggressively take on new mobile pay challenger Apple Pay.

And it will also give it more opportunities to make acquisitions such as this one of Square, if the merger turns out to be true. 

CEO Jack Dorsey says the news of a merger is 'false'. The reports come as Paypal prepares to split from eBay next year.Square Cash lets users send up to £160 ($250) a week to any email address, on any email provider without the need to sign up and manage an account each time

PayPal's impending split from long-time partner eBay, meanwhile, is expected to ratchet up its appeal to online retail competitors such as Amazon.com and give it the freedom to aggressively take on new mobile pay challenger Apple Pay (shown)