The digital and physical worlds are colliding, and Coinstar is poised to take advantage of the trend. The latest example is today’s news that the Bellevue-based coin-counting kiosk operator plans to expand a deal in which customers can convert their coins and dollars to a PayPal account, and even send some of those funds to another PayPal user.

The expansion to northern California and Ohio builds off a trial in the Dallas area last year in which Coinstar found that 40 percent of PayPal users on a Coinstar kiosk returned to the machine on average twice per month.

“From the convenience of a grocery store, consumers can turn their coins and paper currency into digital spending power anywhere PayPal is accepted,” said Mike Skinner, president of Coinstar’s coin business.

Coinstar machines are located in more than 20,000 locations in North America, Ireland and the UK.

At the PayPal-enabled machines, users can add coins and paper currency directly to their PayPal account or withdraw cash from the account to be redeemed in the store. Customers also can send funds directly to another PayPal user’s account.

Here are more of the details on how it works:

Customers can add up to $500 using coins and paper money to a PayPal account each calendar month. Coinstar’s standard coin-counting fee of 9.8% applies when coins are added to a PayPal account. When using paper money, a $3 fee applies for transactions up to $300 and a $6 fee applies for transactions over $300. The fees for loading cash are among the lowest in the highly competitive prepaid market. Withdrawals are limited to $500 in a calendar month and $200 per day; each withdrawal incurs a $3 fee.

Previously on GeekWire: The barista of the future? Coinstar and Starbucks unveil the Rubi, an automated coffee drink machine

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