The company is also looking to expand internationally in the future. The partnership is further proof that the mobile payments space is heating up.

“I’m very excited to share the news today that PayPal and Discover are teaming up to bring the convenience, security and functionality of PayPal to millions of participating in-store locations starting in 2013,” said Don Kingsborough, vice president of retail and prepaid products at PayPal in a blog post.

“Starting in 2013, this program with Discover will build on our current offline efforts to enable participating merchants to accept PayPal easily through their existing relationship with Discover,” he said.

PayPal allows consumers to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promotional financing.

Discover Financial Services is a direct banking and payment services company.

Vast reach
The partnership will begin in 2013.

Through the service, consumers will be able to take advantage of the benefits of PayPal at participating merchant locations.

Over the past year, PayPal has been ramping up its in-store payments service and partnering with retailers such as Home Depot and Toys R Us.

PayPal also works with Abercrombie & Fitch, Advance Auto Parts, Aéropostale, American Eagle Outfitters, Barnes & Noble, Foot Locker, Guitar Center, Jamba Juice, JCPenney, Jos. A. Bank Clothiers, Nine West, Office Depot, Rooms To Go and Tiger Direct.

By partnering with Discover, PayPal is able to expand its reach in mobile commerce.

Additionally, by incorporating mobile at the point-of-sale, consumers are given an easier option to check out and pay for their purchases.

Mobile expansion
The mobile commerce space is growing at a rapid pace and a partnership such as this is a great way to educate consumers on mobile payments.

Additionally, providing merchants with the POS system is a smart move.

“The market has been looking for leadership as the payments space evolves and we think this relationship starts to deliver it,” Mr. Kingsborough said in a blog post.

“It is a milestone for PayPal as it enables us to innovate at scale,” he said. “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.”

Final Take
Rimma Kats is associate editor on Mobile Commerce Daily, New York