Multibillion-pound online payment service PayPal has announced that it will open a major cyber security hub in Tel Aviv, after acquiring Israeli firm CyActive for a figure believed to be around £40 million.

PayPal’s purchase of the Beersheva-based company, which protects against malware and predicts future hacking techniques, is part of the company's plan to expand its existing operations in Israel.

James Barrese, PayPal’s chief technology officer and senior vice president, wrote in a blog post: “The creation of the security centre is an extension of the capabilities we have already developed through the success of our fraud and risk detection centre in Tel Aviv.”

In a statement, CyActive co-founders Liran Tancman and Shlomi Boutnaru wrote that they were delighted that PayPal had chosen Israel as the location for the security centre.

“PayPal is a company that shares our values and views security as a top priority. We are excited by the prospect of dramatically expanding our global reach and believe our combined efforts will help to build a leading security centre for PayPal.”

PayPal, which is set to spin off from parent business eBay to form its own independent company, made £5.2bn last year.