PayPal lets merchants hand-tailor credit options for their customers

PayPal is diving deeper into the credit business, expanding its services so merchants can give their customers more ways to pay for products.

Merchants can now use PayPal Credit to let customers pay off a product purchase over the course of several months. They can choose the number of months as well as the interest rate. There’s even an interest free option for online shoppers, which can be approved in minutes, the release says. On the consumer side, PayPal Credit now gives consumers the option to divide large purchases up into equal sized payments that can be meted out each month.

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PayPal is announcing its new list of services at the National Retail Federation conference today.

PayPal has been offering credit to consumers for years. For example, you can buy a new Mac computer from the Apple store using PayPal credit interest free if you can pay off the total within 12 months. But PayPal’s further expansion into this arena could be scary for banks.

PayPal already operates in many facets of payment processing, not only under the PayPal name but also through its acquisitions like Braintree and Venmo. PayPal is also very connected to its merchants in providing services like credit, payment processing, and even cutting edge payment terminals. As part of today’s announcement, PayPal is also rolling out business consulting services that make use of PayPal’s vast store of consumer transactions to help businesses tackle problems like shopping cart abandonment.

These are all services that banks traditionally provide. And as PayPal continues to expand, it’s easy to see how the company could be pushing to be the bank of the future. Beyond merchant counseling and consumer credit programs, the company is also very excited about Bitcoin — but more as a transaction method than as a currency.

PayPal has already teamed up with BitPay and Coinbase for processing Bitcoin transactions. But if PayPal does move more toward becoming a bank, Bitcoin could play a huge roll in how PayPal builds out its infrastructure — making transactions and bank transfers more instantaneous.

This is all just quiet speculation at this point. Suffice it to say, PayPal has its hands in a lot of different pots, but it’s all going towards one goal, which is to be the main hub for both consumers and merchants when money changes hands.