Anyone who thought that PayPal's (NASDAQ:PYPL) $2.2 billion iZettle purchase was a one-off move should think again. According to President and CEO Dan Schulman, there's a lot more M&A action to come for the company.

In this segment from MarketFoolery, host Mac Greer and senior analysts Taylor Muckerman and Jason Moser discuss the wider outlook in the digital and mobile payments space, PayPal's prior purchases, and more. Plus, they talk about the right plays for Foolish investors looking to capitalize on the war on cash.

A full transcript follows the video.

This video was recorded on July 9, 2018.

Mac Greer: Guys, let's talk PayPal. PayPal's CEO Dan Schulman saying that PayPal is ready to invest up to $3 billion a year on acquisitions. Taylor, you're a PayPal shareholder. How do you feel about this?

Taylor Muckerman: I feel good. If you look at the last couple of months, they've already spent about $3 billion on acquisitions. Certainly not something we haven't seen before. Granted, the bulk of that recent spending was on one company, the largest acquisition to date for the company, for iZettle for $2.2 billion. I've seen it called the Square (NYSE:SQ) of Europe. Different integration there. International has been the focus, especially with these last three acquisitions. I expect that to continue to be the case.

Dan Shulman also said that they don't want to just be a button company, they want to be a solutions and platform company. One of the acquisitions there was an AI company that focuses on helping companies market certain products to different visitors online based on preferences that they've established through their online trail that they've left through cookies and whatever. I think you see them branching out not just from the payments side, but distribution of payments and the marketplace style e-commerce system that we've seen growing so rapidly, made famous by Amazon. Almost more of a competition with Amazon, rather than just a partner on the payments side. They certainly have the balance sheet to spend some money.

Jason Moser: Yeah, I think you're absolutely right there on the balance sheet side. There was that Synchrony deal from a number of months ago where they unloaded a receivables portfolio to Synchrony Bank, their banking partner. The basic idea was, they don't need to be in that business. That's something that, you let a business like Synchrony do that, because they do that kind of stuff well. It freed up a considerable amount of cash flow for PayPal. The idea was, they were going to use that free cash flow to reinvest in the business and more of their strengths. I think this is right in line with that strategy.

Muckerman: Yeah, it just accelerated the cash conversion cycle by selling those receivables off, not having to wait on them or even possibly risk not receiving them at all.

Greer: Let's broaden the conversation out a bit, Jason. I know for a while now, you've been talking about the war on cash, and you've been recommending a basket of stocks. Are you still of that mindset? Or, if I'm an investor, should I be thinking more about some of the standouts -- PayPal, one of them; Square has had another great run. Or, do you still think, take a basket approach?

Moser: I like the basket approach simply because I don't think this is a zero-sum game. I think there are going to be plenty of ways to win out there. It just seems like quarter in, quarter out, Chris and I would come in for Market Foolery or Motley Fool Money, and we'd be talking about MasterCard and Visa and PayPal and be like, "Did you end up buying shares last quarter?" "No, did you?" "No." And I'd be like, "Dammit! We have to figure out a solution here!"

The solution was the basket, because I felt like it gives you exposure to not only the stalwarts in the industry, in MasterCard and Visa, but I do believe that PayPal and Square are the two companies that are going to really define this space over the coming decade. What we're seeing unfold is just that. It's like they're tit-for-tatting, almost. Anything you can do, I can do better. They're making multiple acquisitions, they have to keep up with each other. PayPal is becoming a little bit more of a hardware company with iZettle; you see Square trying to get their e-commerce edge with the Weebly deal. It's just a little back and forth. I think that, investors who focus on that basket approach, it gives you a better chance to win. If you ask me to rank my favorites from top to bottom --

Greer: I will in a minute.

Moser: OK.

Greer: No, go ahead, rank them.

Moser: Because I've been asked this before! The war on cash basket that I have, I think I would actually give the edge to PayPal because of its size. Square is a very close second. It's like 1A and 1B.

Greer: Fair enough. I like it.

Muckerman: They're just starting to go international, but PayPal certainly has the advantage there.

Moser: Exactly.