In April, PayPal announced a new partnership with Discover Financial Services that will bring the formerly online-only payment service into bricks and mortar stores. According to Reuters, PayPal will be accepted in approximately 2 million stores that accept Discover credit cards.

Gaining traction in the physical payments market, which Reuters values at $10 trillion, could fuel longer-term growth for the payment company, which has seen its growth slow in recent years.

This is a solid strategy and has been making headlines left and right. But, it begs the question….how are payments going to be processed?

In a test program at Home Depot, PayPal is experimenting with asking people to enter their mobile phone number and a 4 digit pin number that has to be set up online prior to use. This information syncs with the customer’s PayPal account and makes the payment.

Home Depot has to update the programming\software in their pin pad/payment terminals to allow for this. Shoppers may also use a PayPal magnetic swipe card to initiate the payment.

However, the millions of other retailers being cited in the press as now accepting PayPal aren’t getting updates to their payment terminal software. Many don’t even have payment terminals that can support process, which renders the pin number method useless.

Discover and PayPal are getting a lot of attention for this partnership, but the reality of PayPal’s success will hinge on its issuing of plastic cards, which can be processed through Discover’s payment channels. Even then, people will have to be open to using their PayPal accounts and making room for another card in their wallets.