By John Letzing Of DOW JONES NEWSWIRES
SAN FRANCISCO -(Dow Jones)- EBay Inc.'s (EBAY) online payment service PayPal is moving beyond an initial pilot program at traditional brick and mortar retailer Home Depot Inc. (HD) by expanding into all of the hardware giant's U.S. stores.
PayPal vice president for retail and prepaid products Don Kingsborough said results at the 51 Home Depot locations participating in the pilot program were encouraging, so the service will start rolling out to other Home Depot locations on Monday.
Kingsborough said PayPal should be available at all of Home Depot's roughly 2,000 U.S. locations by the end of next month.
"We've all been happy with the results and the number of adopters, and how quickly people who had PayPal accounts were able to migrate to use it in a Home Depot store," he said.
Beyond Home Depot, PayPal is expected to be available at about 20 different retailers by the end of this year. PayPal has also been testing its brick and mortar service at Office Depot Inc. (ODP).
PayPal has become eBay's fastest-growing business by facilitating payments for account holders with online retailers.
Revenue at PayPal in the quarter ended in December rose 28% compared to the period a year earlier, reaching $1.2 billion. EBay's core marketplaces business meanwhile saw revenue rise 16% to $1.8 billion.
The PayPal service at brick-and-mortar stores is designed to enable eBay to start tapping into the far larger network of sales at traditional retail locations.
Online sales only represent about 9% of all U.S. retail activity, Kingsborough said, adding, "The proportional size of the market is so much greater that we obviously see physical retail to have a bigger opportunity financially than online."
PayPal's brick-and-mortar service enables account holders to enter their phone number and a PIN at a terminal in order to make a purchase. Payment using a card is also an option.
PayPal lost president Scott Thompson last month when he was hired as Yahoo Inc.'s (YHOO) chief executive. EBay CEO John Donahoe has been overseeing PayPal and plans to start looking for a replacement for Thompson soon, Kingsborough said.
-By John Letzing, Dow Jones Newswires; 415-765-8230; firstname.lastname@example.org
(END) Dow Jones Newswires
February 24, 2012 22:50 ET (03:50 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.