Guitar Center added a new payments instrument at the point of sale, integrating PayPal via middleware provider AJB Software Design Inc. 

"We were interested in supporting PayPal because musicians use PayPal a lot online," says Wes Muddle, vice president of finance at Guitar Center.

Many of Guitar Center's customers have PayPal accounts to buy used music equipment on eBay. The integration at Guitar Center allows them to use the same payment method in-store and spend down the stored balances in their PayPal accounts.

The payment method is available in all 235 Guitar Center locations. Consumers can use a PayPal payment card and PIN number or give cashiers their mobile phone number and PIN to initiate transactions. The terminal used to swipe PayPal payment cards is the same one used to swipe debit or credit cards, so the store didn't have to purchase new hardware. Once the PayPal account holder is validated, PayPal sends special offers and coupons that can be applied to the transaction.

While Guitar Center hasn't promoted the integration heavily yet, Muddle says every week the number of consumers using the payment method grows.

"Our consumers are already using PayPal and are already regulars of Guitar Center so it's just a great meld," says Vivian Shen, manager of marketing and media at AJB.

As of last month, PayPal deployed its point of sale payment system with 10 retailers and planned to deploy with an additional 10 by yearend. PayPal, a unit of eBay Inc., also has a deal in place with Discover Financial Services to allow all Discover merchants to accept PayPal payments next year. 

Guitar Center enables consumers to go online, sign up for the program in-store and use the payment method the same day. This addresses the issue of using a new mobile payment system for impulse shopping, says Dave Kaminsky, an analyst at Mercator Advisory Group.

Correction: An earlier version of this story misidentified Vivian Shen's employer. She is manager of marketing and media at AJB.

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