August 22, 2012, 11:10 AM

PayPal moves deeper into bricks-and-mortar retail with Discover deal

More than 7 million U.S. merchant locations accept Discover.

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Merchants that accept Discover card from Discover Financial Services soon will be able to accept PayPal transactions in their stores, the eBay Inc.-owned payment service announced today.

Starting in 2013, consumers potentially will be able to pay for goods inside stores using their PayPal accounts, says Don Kingsborough, PayPal vice president of retail and prepaid products.

“What this means in a nutshell is that PayPal can be enabled as a payments option for our 50 million plus active users in the U.S. at any in-store location that accepts Discover,” Kingsborough says. How that will be done, the cost and any changes necessary for retailers to make were not immediately known. Discover did not immediately respond to an Internet Retailer inquiry.

This is PayPal’s latest move to expand outside of e-commerce transactions. It began this year when The Home Depot Inc., No. 43 in the Internet Retailer Top 500, began accepting PayPal in its stores. In May, PayPal announced 15 other national retailers would join suit.

This expansion is part of eBay’s strategy to capitalize on PayPal, says John Donahoe, eBay CEO. “2012 is all about piloting, testing and learning,” he told analysts earlier this year.

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