For small-sized retailers, it’s a pain to accept credit card payments on the go. PayPal has teamed up with Transaction Wireless to alleviate the problem.

With the partnership, Transaction Wireless offers users of PayPal to accept all major credit cards via any mobile phone. The technology turns a standard mobile phone into a credit card terminal without any extra equipment. Merchants will pay a subscription fee for the service in addition to PayPal’s regular fees.

San Diego-based Transaction Wireless also offers “enhanced” gift cards and mobile loyalty programs for marketing businesses of all sizes. With this service, consumers can manage, track, buy and deliver gift cards using virtually any carrier or handset. While currently unrelated to the mobile phone credit card transactions, the company may want to explore ways to merge their mobile payments and follow-up with their mobile loyalty programs. The point-of-sale mobile credit card transaction is not a new technology and it starting to gain ground internationally. In April, Visa Inc. announced the launch of the world’s first commercial Visa mobile payments service for point-of-sale transactions in Malaysia. In Sweden, mobile payment and security provider Accumulate announced expanding their technology further into physical point-of-sale payments with mobile, and announced a similar partnership with Swedish-based payment system provider PayEx in late July.

However, the partnership makes this available for smaller merchants who wouldn’t be able to afford it before. Merchants, anywhere from the school fundraising bazaar or swap meet to contractors and home delivery services collecting larger sums of money can accept VISA, MasterCard, American Express, and Discover credit cards and issue receipts to customers’ mobile phones or email addresses.