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PayPal extends influence with 15 national U.S. retailers

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Home Depot added a PayPal payment option to its in-store POS systems in just two months; now, other big-brand stores are doing the same.

After a successful pilot program with Home Depot that turned into a nationwide rollout, payment and shopping services company PayPal has signed up 15 additional retailers in the United States.

The development is one that every company concerned with mobile payment solutions should be watching carefully. PayPal absolutely will be a force to be reckoned with in mobile payments.

Here's how its new offline service works: the PayPal software and application is integrated into existing retail point-of-sale hardware, essentially adding PayPal as an alternate payment method in stores. This doesn't require the addition of near field communication technology. Customers can enter their information manually or they can use a PayPal card. The video below provides a quick demonstration:

Home Depot announced a trial of the program early this year and wound up deciding to offer the solution in its more than 2,000 U.S. locations within two months.

Now, a slew of other familiar retailers have signed on to offer the service including Abercrombie & Fitch, Advance Auto Parts, Aeropostale, American Eagle Outfitters, Barnes & Noble, Foot Locker, Guitar Center, Jamba Juice, JC Penney, Jos. A. Bank Clothiers, Nine West, Office Depot, Rooms to Go, Tiger Direct and Toys "R" Us.

In his blog about the new relationships, PayPal President David Marcus said:

"We're helping merchants connect with consumers at every stage in the shopping cycle. Before they come into the store, while they're in the store, or even after they've left. We're able to drive consumers through a retailer's doors with relevant offers, coupons and discounts, then maintain a relationship with that consumer that keeps bringing them back to the retailer, in store or online."

Considering that PayPal orchestrated more than $118 billion in total payment volume last year, its influence on the rapidly changing mobile payment and digital wallet space is already undeniable. The appeal of PayPal lies in the fact that it builds on existing POS technology rather than forcing a replacement. The idea that a retailer could better integrate the method that many customers use for e-commerce transactions with what they use in-store is sort of a no-brainer.

PayPal is working with VeriFone and Equinox to add its functionality directly into payment systems offered by those companies; so for new retailers, PayPal will be seamlessly integrated as a payment option.

Small businesses and retailers are already a huge force behind PayPal, largely due to its relationship with eBay. In March 2012, the company debuted a mobile credit card reader and solution focused squarely on unseating Square's dominance in that space.

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Heather Clancy

Section Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey. Follow her on Twitter. Disclosure