PayPal acquired a real-world presence this week when it sold a stake in its online payment system to Providian Financial Corp., one of the nation's largest bankcard issuers.

The new partners declined to comment on the exact financial nature of the deal. But they say PayPal will offer its small-business customers a co-branded Providian credit card, while Providian will offer PayPal's person-to-person payment system, by the second quarter of 2001.

In the past 15 months, PayPal has become the leading online payment system. Its 5 million business customers and another million consumers use it to E-mail $7 million worth of payments to each other daily, a spokesman says. The multimillion-dollar cash infusion and ensuing revenue stream will help the privately held PayPal reach its goal of turning a profit by year's end, and at the same time jump-start Providian's E-commerce presence.