PayPal is moving into an important payments space – the gas pump. The company announced a new partnership with Cumberland Farms, one of the largest networks of convenience stores in the North East. Customers will be able to pay at the pump using PayPal.

“Through Cumberland’s newly released SmartPay app customers can pay for their gas at the pump using PayPal,” a PayPal representative tells WebProNews. “And for a limited time when they do they’ll be discounted 5 cents per gallon.”

PayPal Director of Communications Anuj Nayar writes on the PayPal blog:

The new Cumberland Farms smartpay app automatically locates the gas station where you are and then lets you turn on the pump and pay with PayPal while still in the driver’s seat. (You still have to get out of the car to pump the gas … unfortunately, we can’t do everything!)

As if staying warm in the car on a cold Boston night wasn’t sweet enough, for a limited time customers get five cents off per gallon when they buy their gas using the app. (Funding terms of this promotion have not been disclosed.)

While it’s only beginning with a pilot program at 50 stores in Massachusetts, the potential for this to grow not only within this chain, but to other gas stations across the country seems pretty great. PayPal is already moving into retail stores (Home Depot so far). PayPal is rolling out to 2,000 stores in the U.S.

Would you use PayPal to pay for gas? How about retail store? Let us know in the comments.