PayPal taps Discover network to reach millions of US stores

PayPal taps Discover network to reach millions of US stores

PayPal has struck a deal with Discover that will see it tap into the card firm's network to bring acceptance of its mobile wallet to millions of US stores.

PayPal has made an aggressive push into the bricks and mortar world over the last year, signing up more than 15 major retailers, including Home Depot and Toys "R" Us, to its in-store system which lets customers pay by using PayPal Access cards or entering a mobile phone number and PIN into the terminal.

The Discover deal means that PayPal no longer needs to strike deals with individual firms. Instead, from next year, participating retailers will be able to accept PayPal through their existing relationship with Discover - opening up a potential seven million merchant locations to the eBay unit.

The old strategy also involved getting terminal manufacturers like VeriFone and Ingenico on board to ensure the retailers can easily offer PayPal options to shoppers.

Under the Discover deal, to offer PayPal, merchants will not have to install or upgrade existing point-of-sale hardware or software. Consumers will know of the new payments option through in-store signage.

Don Kingsborough, VP, retail, PayPal, says: "This relationship quickly extends PayPal's reach to millions of merchant locations nationwide and is a milestone moment for us that will create new benefits for Discover merchants without requiring new hardware or software."

Diane Offereins, president, Discover Payment Services, adds: "The establishment of this relationship is a major industry milestone, which will help shape the emerging payments landscape by bringing together an established direct banking and payments company with a leading commerce enabler to create an alternative payments option for consumers at the point of sale."

Gaining immediate access to so many locations gives PayPal a major boost in its battle for the high street with the likes of Google Wallet, Isis and Square, which recently made waves by striking a deal with just one - albeit it major - retailer, coffee chain Starbucks.

Comments: (1)

A Finextra member
A Finextra member 22 August, 2012, 14:51Be the first to give this comment the thumbs up 0 likes Am I missing something here: if POS terminals are not equipped for manual data input, than the only option is a physical card - nothing to write home about. Google offers a virtual (MC) card as part of their wallet, they can issue a physical one too (and MC > Discover). Besides, how many (big) merchants would want to waste valuable time by letting consumers fumble with manual input? If PayPal were to offer additional features, linked to a mobile, then it could be interesting. But Google and Square have done that already, in a better way.