Xero announced a deal to acquire small business payments platform Melio for $2.5 billion and fill a gap in its offerings by integrating accounting and bill payments.

Xero Ltd. is considering an acquisition of Melio Payments Inc. in a deal that could value it at more than $2.5 billion, according to people familiar with the matter.Xero is working with advisers as it considers a cash-and-stock offer for Melio,

New Zealand accounting software giant Xero agreed to buy U.S.-Israeli payments provider Melio for as much as $3 billion, the companies said on Wednesday, accelerating the Kiwi firm's push into the U.S.