SAN FRANCISCO (Reuters) - PayPal unveiled deals with 15 retailers including Toys R Us, J C Penney (>> J.C. Penney Company, Inc.) and Barnes & Noble (>> Barnes & Noble, Inc.), helping the online payment giant expand into more physical stores.

The deals add to a pact with Home Depot (>> The Home Depot, Inc.), which began accepting PayPal in about 2000 stores earlier this year.

One of the most important sources of future growth for eBay Inc-owned (>> eBay Inc) PayPal may come from its expansion into physical stores - a much bigger market than its online roots.

EBay Chief Executive John Donahoe and Chief Financial Officer Bob Swan told Wall Street earlier this year that PayPal planned to sign up about 20 big retailers for the offline effort in 2012.

"They said 20 large merchants would partner with us this year. This is only our first installment. There will be others," Don Kingsborough, the PayPal executive overseeing the offline initiative, said from its headquarters in San Jose, California.

Other retailers announced on Thursday for PayPal's in-store service were Office Depot (>> Office Depot, Inc.), American Eagle Outfitters (>> American Eagle Outfitters), Abercrombie & Fitch (>> Abercrombie & Fitch Co.), Rooms To Go, Jos. A. Bank (>> Jos. A. Bank Clothiers, Inc.), Aeropostale (>> Aeropostale, Inc.), Foot Locker (>> Foot Locker, Inc.), Nine West, Jamba Juice (>> Jamba, Inc.), Guitar Center, TigerDirect and Advance Auto Parts (>> Advance Auto Parts, Inc.).

PAYPAL HERE

David Marcus, PayPal's new president, said PayPal may process more than $7 billion worth of mobile payments this year.

He also reported that more than 300,000 small businesses have registered for PayPal Here, the company's card payment service that works with smart phones and competes with start-up Square Inc. PayPal Here was launched in March.

Earlier on Thursday, PayPal said it signed agreements with VeriFone Systems (>> VeriFone Systems Inc) and Equinox Payments to get its payment technology on to their networks of checkout terminals.

VeriFone and Equinox provide payment terminals that are used in stores run by many of the world's largest retailers. PayPal signed a similar deal with the other leading payment terminal provider, Ingenico, earlier this year.

These agreements should help PayPal's offline expansion, giving it potential access to almost 40 million payment terminals that are already installed in stores worldwide.

PayPal's service was rolled out in 2,000 Home Depot stores quickly this year, partly because no new hardware needed to be bought or installed by the retailer. Instead, just the software on these payment terminals needed to be upgraded.

"An important part of our future is to get to ubiquity," said Kingsborough on Thursday. "There will be 40 million terminals eventually to let consumers buy in stores with PayPal. That's one of the big building blocks we have to get to ubiquity."

(Reporting By Alistair Barr; Editing by Tim Dobbyn)

By Alistair Barr