Discover (NYSE: DFS) Plans to Put PayPal (NASDAQ: EBAY) in Retail Stores Credit: goldenangel /

A new partnership between merchants and Discover (NYSE: DFS) soonwill let consumers use their PayPal (NASDAQ: EBAY) account to shop at millions of brick-and-mortar stores across the country.

Starting in 2013, Discover will enable more than 7 million merchant locations across the U.S. to accept payments via PayPal, the online payment giant.

The partnership extends the offline reach of PayPal, which currently is accepted at 16 national retailers, including Abercrombie & Fitch, Barnes & Noble, Foot Locker, Guitar Center, Jamba Juice, Office Depot, Tiger Direct and Toys "R" Us.

The newly enlisted merchants will not have to install or upgrade their point-of-sale hardware or software to offer PayPal, Discover said.

"The establishment of this relationship is a major industry milestone, which will help shape the emerging payments landscape," said Diane Offereins, the president of Discover Payment Services.

Offereins added, “This initiative will result in real change and innovation for the industry by bringing new technologies to the point of sale that benefit merchants and PayPal customers."

Consumers will be alerted to the new payment option through in-store signage.

PayPal is expecting the new partnership to bring more shoppers to brick-and-mortar retailers.

"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, PayPal’s vice president of retail. "This relationship will deliver a truly seamless digital wallet, available most places consumers shop offline, which offers the speed, simplicity and security already enjoyed by 113 million active PayPal customers online."

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