PayPal Credit to expand credit options for merchants

Posted by Ian Kar on January 12, 2015

PayPal Credit will be making a big announcement at the National Retail Federation conference this week, according to TechCrunch. PayPal Credit will let merchants pick the number of months and interest rates for their customers' repayment when they select the PayPal Credit option, and allow interest-free repayments for customers as well. 

By offering customers the option to break up large purchases into smaller payments over a period of time, PayPal is hoping customers will use this payment option and increase the company's transaction volume. 

PayPal seems to be focusing on its credit services as the company prepares to split apart from its parent company, eBay. TechCrunch writes:

PayPal also said it was buying back the GE portfolio in 2016 as part of its strategy to increase and expand its credit offerings – something the company notes is key as it expands into the offline world, and omni-channel. The company later plans to expand PayPal Credit more directly to retail and point-of-sale, but that’s for a future date.

Giving customers multiple financing options can be extremely useful for customers, especially those who find it difficult to attain credit, like millenials. But, so far, it hasn't caught on. Zero-percent interest is an appealling incentive to gain customers, similar to PayPal's $5 promotion back in the day. 

Extending credit to customers seems to be a hot trend these days -- PayPal co-founder Max Levchin is the CEO of Affirm, which gives customers different payment options over a few months. If PayPal can figure this out, it could be a fantastic new offering for them.

Topics: Payments, Credit