Another milestone in the financial services industry's quest to eliminate cash is imminent with the launch of a variety of hand-held, battery-operated credit card terminals that open the world of credit card transactions to mobile merchants.

"The demand is potentially large because we're addressing a market segment that is unpenetrated except for cash and check," says John Perry, evp at payment processor Nova Information Systems.

Birmingham, AL-based Symphony Inc. is pushing its Soloist terminal as a breakthrough in credit card processing. The cellular digital packet data (CDPD) solution uses excess capacity on cellular networks in a connectionless environment, but is much faster and cheaper than existing cellular processing products because merchants aren't charged by the minute for connections. "We're talking about a transaction that takes three seconds instead of a transaction that might take 10 to 15," says Charles H. Busch, vp at Symphony.

CDPD terminals not only give credit card capability to merchants who don't have access to a grounded telephone line for authorization, but could eliminate the cost of land lines, while still providing speedy transactions.

The drawback to CDPD is that coverage is not uniformly available throughout the country. Symphony says every major market except Atlanta and Los Angeles is covered; the CDPD Forum estimates that 53 percent of the U.S. population has access. Industry projections suggest that within three years availability will match the existing cellular footprint.

The Soloist terminal can accept credit and debit transactions, authorize checks and accept smart cards, though no smart card pilot projects have been tested yet, Busch says. Will broader acceptance of credit card transactions result in slowed demand for smart cards? Symphony doesn't think so. The company is planning for a wave of smart card applications that utilize its wireless terminal. "There's a lot more we can do with smart cards than just take monies," Busch notes.

Payment processors are jumping on the CDPD bandwagon. In late October, Nova unveiled Transverse, its CDPD processing solution that can accept transmissions from the Symphony product and several other vendors. Symphony says that within the next 12 months four of the top six payment processors will accept CDPD. "We're changing behavior here," says Perry. "And that behavior is that (merchants say) 'Gosh, I feel safe, I've got a phone line. Do I now feel just as safe with a wireless device processing my credit card transactions?' and the answer should be, 'Absolutely yes.'"


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