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PayPal makes its way to brick-and-mortar stores

The eBay-owned company is expanding into credit card territory by giving customers the option to shop in more than 2,000 conventional stores.

Shoppers will be able to use PayPal in more than 2,000 brick-and-mortar stores come March.

Jessica Dolcourt/CNET

The e-commerce payment business, owned by eBay, started a preliminary run this week in 51 Home Depot stores in the San Francisco Bay Area, according to PayPal spokesman Anuj Nayar. By the end of the year, PayPal plans to add 20 more retailers and expand nationally.

"We are excited about our partnership with The Home Depot," Nayar said. "We will continue to be focused on delivering the best possible product experience for customers and retailers as we expand with The Home Depot and other national retailers this year."

The way this new payment system works is shoppers can buy items at checkout with a PayPal card or with a mobile phone number and PIN code, said Nayar.

Last year, eBay's earnings did exceeding well with $11.7 billion in revenue--up 27 percent from 2010. And, PayPal proved to be one of eBay's strongest assets by increasing its revenue by 28 percent and retaining 106.3 million active registered accounts.

According to Bloomberg, PayPal's move to in-person payment at big box stores is an undertaking to entice customers from credit-card companies. PayPal has also said it plans to tread into Groupon's daily deals business too and offer deals based on users' locations and habits.

This all comes as PayPal's CEO Scott Thompson has stepped down and moved to Yahoo, while eBay Chief Executive Officer John Donahoe is serving as PayPal's interim president.