PayPal To Offer Cards, Expand Home Depot Point-Of-Sale Trial This Week

PayPal Inc., which has been testing a point-of-sale payment system with Home Depot, this week plans to expand that trial and offer consumers a card linked to their PayPal accounts.

The card will be made available online. PayPal, a unit of eBay Inc., has been testing a point-of-sale payment system that works with or without a card. If consumers choose not to use a card, they can make PayPal payments using a phone number and PIN.

PayPal, of San Jose, Calif., said this month that it is testing this system at five Home Depot stores (see story). This week, it will expand the trial to 51 Home Depot stores: one in Atlanta, six in Omaha and 44 in the San Francisco Bay area.

PayPal expects to have its payment system in all Home Depot stores by March.

"It needs to reach scale very quickly. This won't catch on until that happens–until it's ubiquitous," Anuj Nayar, a PayPal spokesperson, said in a Jan. 18 interview.

The Home Depot test uses hardware from the French terminal maker Ingenico SA (see story).  PayPal also has begun working with middleware companies, including AJB Software Inc. in Canada, to ease integration of its payment system with brick-and-mortar retailers (see story).

The new card will not function like a normal debit card. It will not have the user's name or account number printed on it. Instead, it will have encrypted data written to the magnetic stripe used to provide access to provide access to funds via a link to PayPal. The card will have a rewards feature added by yearend, Nayar says.

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