Discover has signed contracts with 50 merchant acquirers to enable PayPal's in-store payment system to pass 2 million merchant locations by the end of 2013, the card brand said.

"We are well on our way toward helping PayPal reach its goals of acceptance at millions of physical locations in the U.S.," said Diane Offereins, president of payment services at Discover, in a release.

PayPal and Discover partnered in 2012 to leverage Discover's payments infrastructure to provide PayPal's account holders access to point of sale payments at retail stores.

"As consumers continue to use technology to shop in new and exciting ways, we will continue to collaborate with Discover's acquirer partners to support the growing needs of their merchants," said Don Kingsborough, vice president of retail services at PayPal, in a release.

Merchant acquirers that have committed to offering PayPal thus far include Vantiv, WorldPay, Global Payments, First American Payments, Heartland Payment Systems and TSYS. Discover has tempered expectations for fast growth, saying transactions will gradually ramp up over time.

"With the expanded acceptance options, our merchants are able to offer more payment choices for their customers, create better opportunities for engaging customers, help increase sales, and solve problems to make their customers' experience better," said Tony Catalfano, president and CEO of WorldPay U.S., in the release.

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