In this segment of the Motley Fool Money podcast, host Chris Hill and Fool analysts Jason Moser, Matt Argersinger, and Ron Gross discuss PayPal's (PYPL 1.96%) move to buy Sweden-based fintech player iZettle. They see it as a natural play in the war on cash and a smart way for PayPal to expand its footprint in the digital payments space. The price, however, was a pretty high multiple of iZettle's earnings. Did the buyer overpay, or will the synergies make this deal pay off?

A full transcript follows the video.

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This video was recorded on May 18, 2018.

Chris Hill: Shares of PayPal up on Friday, which is a little surprising, because this comes after PayPal announced it's paying more than $2 billion in cash for a Sweden-based fintech company called iZettle. Jason, Wall Street likes the deal. But, what in the world is iZettle?

Jason Moser: iZettle is basically referred to as the Square of Europe. Just think Square, and then Europe, and now you have a good picture as to what they do. It's interesting. We've talked for the last decade or so about the payments industry, and how Mastercard and Visa have been the ways for investors to win in this really attractive space. And everybody knows I love it.

I think, the next decade, we're going to watch PayPal and Square really duke it out for a lot of share in this space. MasterCard and Visa will work out well, but I think investors need to keep an eye on PayPal and Square. I think that PayPal recognizes what Square is doing, particularly for the small business owners here in this country. Not only that, but they're certainly expanding globally.

I think PayPal is trying to get out in front of this. They're paying a lot for iZettle. It's not a cheap deal by any means. I think iZettle, probably, annualized, is bringing in somewhere in the neighborhood of about $150 million. So, you do the math there, that's a lofty multiple. But, with that said, PayPal is going to do what they do best here. They've done it with Xoom, they've done it with Venmo. They get these guys into their family, they let them keep on doing their thing, and they give them exposure to that massive network and expertise that PayPal has.

And, remember, it wasn't all that long ago we talked about that deal with Synchrony, where PayPal was unloading that receivables portfolio. We were questioning what they might do with this cash. Well, this is a good idea here, I think. You have a business with a big balance sheet, strong cash flows. It's probably a decent investment on PayPal's part.

Hill: So, why do you think we're seeing a little bit of a disconnect? If they're paying such a lofty multiple for iZettle, I mean, shares of PayPal are still up.

Moser: I think, you're looking at, clearly, the trend toward electronic payments. That's only strengthening. Then, I think when you add global opportunity to that, it's a big win for everybody involved.