PayPal will use data from billions of customer transactions to power its nascent advertising business.

And it sounds like it will work like this: PayPal will provide ways for businesses to advertise online – on websites and in apps – and use the information PayPal knows about people – their transactions, purchase history, etc – to target them specifically.

The new PayPal Ads group is led by recent hire Mark Grether, senior vice president and GM at PayPal, who says the burgeoning advertising business will "help make merchants smarter to sell more products and services effectively, as well as enable consumers to discover more of what they love." But his reported statement doesn't quite dwell on the fact that it will use customer data, including purchase history, to achieve that.

For a sense of potential scale, consider this: By 2023, PayPal processed approximately 25 billion transactions and has been increasing its volume steadily year over year. In addition to the main PayPal platform, it also powers the cash transfer app Venmo and Honey, a browser extension designed to find deals online.