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PayPal Partners With Point-Of-Sale Software Company AJB To Scale In-Store Payments Option To Big Box Retailers

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Exclusive: We’ve received more details on how PayPal will be scaling its in-store payments technology at major retailers. As we reported last week, PayPal is currently testing the mobile payments and point-of-sale integrations at Home Depot on a friends and family basis, in five stores. Today, we’ve learned that PayPal is partnering with AJB Software, a company that provides point-of-sale software to large brick and mortar retailers, to integrate the online payments giant’s technology into their offerings.

AJB basically provides a communications gateway that connects a retailer’s point-of-sale system with financial institutions. Over 140 large-scale retailers including Kohl’s and BestBuy use AJB’s software to manage payments. In a nutshell, the partnership allows an easy way for big box retailers to offer consumers a way to pay via PayPal in their stores.

AJB will build a native PayPal interface within its integrated payment solutions platform. The interface can then be made available to AJB’s retail customer base. AJB’s Retail Transaction Switch will provide the framework to allow the millions of PayPal account numbers to be processed as financial tender by existing and future customers of AJB. Similar to the Home Depot integration, PayPal members will have the option of paying for merchandise by swiping a PayPal Access Card or by entering the mobile telephone number and password associated with their accounts.

The integration with AJB’s offerings will roll out in the first quarter of this year, says the companies.

While it’s still unclear the exact nature of how PayPal’s in-store integrations will work, the bigger vision of brick and mortar partnerships are set to include location-based offers, making payments accessible from any device and offering more payments flexibility to customers after they’ve checked out.

Users will also have the ability to access realtime store inventory, receive in-store offers, and real-time location-based advertising from stores. PayPal will also help retailers use location and transaction data to improve the experience for consumers.

For PayPal, this is one way that the company can scale the reach of its in-store payment system without having to partner individually with each retailers. PayPal’s Anuj Nayar tells me that the Home Depot test program was individually established (not via AJB) but going forward, PayPal will be making a number of similar payments ecosystem deals in the coming months to expand the reach of the new payments option.

In terms of specific scale, AJB has the potential of extending PayPal to 250,000 point-of-sale terminals at large retailers nationwide. For PayPal, it makes sense to create partnerships like these to make it easier for retailers to simply plug the system into their existing AJB integrations. But PayPal will also need to educate larger retailers on why it is beneficial to implement the new payments system in their point-of-sale terminals.

PayPal has already started showcasing its technology for retailers and the press over the past few months, and considering PayPal’s 100 million-plus userbase, and growing revenue, the payments giant shouldn’t have too much of an uphill battle convincing retailers that the option makes sense for consumers.