PayPal plans to be in more than 2,000 Home Depot stores by March

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PayPal has said 2012 will be a learning year as it rolls out its in-store payment system. But that doesn’t mean it will all be small pilot programs this year. A company spokesman told Bloomberg that it expects to be in more than 2,000 Home Depot stores by March.

PayPal said on its quarterly earnings conference call earlier this week that it is expanding its Home Depot trial this week to 51 stores, mostly in the Bay Area. But now, it’s saying that it will extend service to all Home Depot stores, which numbers more than 2,200 in the U.S.

PayPal doesn’t expect its in-store system to affect revenue this year, but next year is when it plans to really scale up. John Donahoe, eBay’s CEO, who is interim PayPal president since Scott Thompson left for Yahoo, said on the earnings call that he’s looking to set the stage for a big worldwide rollout next year that covers every vertical.

PayPal has made some key moves in establishing partnerships with point of sale software and hardware companies such as Ingenico and AJB Software Designs, which allows it to scale up quickly by having the system ready to go when retailers sign on. It’s also been talking to VeriFone, which appears to be close to announcing an agreement soon.

If it can line up a lot of retailers, PayPal has a chance at changing the way people pay, shifting many purchases away from credit and cash. And it’s an alternative to the NFC-based mobile payments systems from Google Wallet and Isis. PayPal is increasingly becoming the engine of growth for eBay, increasing revenues by 28 percent last quarter. PayPal expects mobile payments volume will grow to $7 billion in total this year and that doesn’t factor in PayPal’s in-store initiatives. If PayPal can get the in-store system right, that could make PayPal the dominant business for eBay.

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