PayPal Brings Digital Wallet To Discover

PayPal has entered an agreement with US credit card operator Discover to allow its mobile wallet to be used in approximately 7m US stores, starting in 2013.

The partnership will enable retailers to use their existing Discover hardware to accept the payments, meaning they don't need to upgrade their POS equipment - which, as it removes obstacles to retailers adopting the technology, is probably the most important element of the deal.

"The market has been looking for leadership as the payments space evolves and we think this relationship starts to deliver it," said PayPal's VP of retail and prepaid products Don Kingsborough in a blog post. "It is a milestone for PayPal, as it enables us to innovate at scale. One of the great things about this relationship with Discover is that merchants won’t have to install or upgrade existing point-of-sale hardware or software to offer PayPal."

It's certainly a big expansion for PayPal's mobile payment system. It's currently available in 3,000 retail locations in the US, meaning this deal increases its potential reach 2,000-fold.