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PayPal brings digital wallet to merchants through Discover

Starting next year, merchants will be able to accept PayPal payments if they have an existing relationship with Discover's payment network.

PayPal and Discover said today that they will partner to bring PayPal's digital wallet and payment services to millions of merchants in the Discover network.


Under the partnership, merchants in the Discover payment network will be able to accept PayPal payments. PayPal said that consumers would be able to take advantage of its services at these merchants.

PayPal, which has long handled online transactions, has attempted to breach the physical world with several mobile payment initiatives. From exploring the use of physical cards to the use of tap-and-go stickers, and even paying with smartphones, the company wants to be a legitimate player in the payments world, both in online merchants and brick-and-mortar stores.

"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," said Don Kingsborough, vice president of retail for PayPal.

A deal with Discover helps establish PayPal's physical footprint. While Discover is a distant fourth player in the payments business, behind Visa, MasterCard, and American Express, it still has an impressively large payments network.

Consumers will be able to use their PayPal digital wallet, although the companies haven't specified how they payments will be made. CNET contacted PayPal for more details, and we'll update the story when the company responds.

The service will roll out next year. The companies said that merchants will not have to upgrade any of their equipment to use the service. The need for new terminals with different payment technology has been one of the stumbling blocks for more ambitious mobile-payment projects, including Google Wallet and the telecom payments joint venture Isis.