Visa International has announced its intention to add radio-wave connections to the point of sale options it offers retail merchants.
The technology is useful where land-based communicatins lines are too expensive or technologically restricting.
"Visa recognizes wireless radio technology as akey component to future growth in global markets," said William Chenevich, group eecutive vice president of payment systems.
California Firm to Run Link
Metricom Inc., a nine-year-old company based in Los Gatos, Calif., will operate the radio network over which Visa transactions will travel.
Visa and Metricom consumated the agreement in late April. Financial terms were not disclosed.
The two companies plan to identify markets for radio communications and to find point of sale hardware providers to manufacture terminals compatible with the Metricom netowrks.
A transaction authorization request using Metricom's network would begin with a swipe of a card at a point of sale terminal. The transaction data would be transmitted over a radio modem to a Metricom receiver.
The transaction would then bounce to additional receivers on the network until it reached a central concentration point, from which it would be sent via land-based lines or satellite communications to Visanet.
Visanet is the communications network run by Visa that links more than 19,000 financial institutions worldwide to the credit card association's bank card processing centers.
Once on Visanet, the transaction would travel to the card-issuing bank. Credit authorization or denial information would then flow to the terminal that initiated the transaction.
First Mile and Last
"The Metricom solution is really kind of a first and last mile of communications," explained Dennis Moser, senior vice president at Visa International's acquirer services.
With the radio wave communication, merchants and merchant processors have four communications alternatives for access to Visanet: radio, satellite, integrated services digital network - or ISDN - lines, and digital data lines. Mr. Moser said Visa isn't yet offering th service, and he declined to discuss when it might.
He said foreign markets are "potentially attractive because of the competing communications service available there."
"In some markets," he continued, "the communications are not as cost effective or reliable as they are in others."
