Consumer Comeback Blog

Discover and Paypal Partner to Make Paper Money Obsolete

Paypal and Discover Financial Services have entered into a partnership to bring Paypal to the grocery store. According to a report in Forbes, the partnership between the fourth largest credit card in the country and the largest internet payment processing company will bring Paypal payments to more than 7 million physical retail stores in the U.S.

Starting in 2013 PayPal will begin issuing Discover branded payment cards to its 50 million active users who will be able to use those cards exactly like a traditional credit card, reports Reuters. While the details of point-of-sale processing have been made public—retailers will pay a processing fee to PayPal, who will in turn pay Discover for the use of its network–there currently is no word on what terms of service or fees cardholders might be subject to.

The partnership is the latest in a series of deals designed to bring Paypal off-line and into the physical world. Since 2010, 16 retailers—including Home Depot, Office Depot, and Starbucks—have agreed to accept PayPal payments.