First Data Corp. has joined Celltel Data Inc. to create a wireless credit authorization service that can be used at restaurants, parking garages, tollbooths, limousine services, and other mobile locations.
Celltel, of Moorestown, N.J., specializes in cellular and wireless credit card transactions. The new service will combine Celltel's cellular digital packet data point of purchase terminal with Omaha-based First Data Card Services Group's processing capabilities.
With mobile point of sale markets growing rapidly, the First Data/Celltel partnership reflects movement toward replacing traditional telephone line transmission with cellular technology in processing credit and debit transactions.
"I see its primary usage being among merchants that want or need greater speed at the point of sale, who have not accepted credit cards because they couldn't turn (them) around quickly enough," as well as those who do not have access to a phone line, said Greg Rollins, Celltel's president.
Roger Peirce, president of First Data's Electronic Funds Services, said the Celltel partnership will enable First Data to expand its presence in wireless processing, which it developed when it acquired Card Establishment Services.
The First Data/Celltel system creates credit authorizations as the merchant swipes customer credit or debit cards through an independent terminal.
Once the card is swiped, transaction processing time will be half of what is currently needed for standard transactions, First Data said, thereby boosting merchant sales, card transaction volume, and customer convenience.
The service goes beyond "lost or stolen" verification to provide authorization, so that merchants can reduce risk and qualify for the lowest interchange rate.
Merchants choosing the service will be billed based on their projected transaction total. Pricing adjustments can be made if actual totals veer from the estimates.
Celltel estimated the cost to merchants using the system at "$30 per month and up." Monthly telephone line charges to vendors range from $45 to $60 each, according to First Data.
Merchant-acquiring banks have long wanted to extend the reach of credit cards. They have pursued large groups such as home delivery and home repair services, flea market vendors, and other outdoor concessionaires.
U.S. Wireless Data Inc., based in Boulder, Colo., currently operates a system comparable to the First Data/Celltel project. The company's POS-50 portable card authorization terminal has been used at a number of high- profile locations, including last year's New York City Marathon and the Rolling Stones concert tour.Card Establishment Services has agreed to distribute POS-50 for the point of sale terminal marketer.
The U.S. Wireless system does not accept debit cards, but a company spokesman said it has initiated the debit certifying process with several processors, one of which is First Data Resources.
"As soon as they give their approval, we can start the next day," said the spokesman, who declined to give a time frame for approval.
The First Data/Celltel system will be expanded to Mexico by the end of April, according to a First Data spokeswoman. First Data called it the first such service in Mexico, where the limited number of phone lines would seem to create a considerable opening for wireless authorization technology.
U.S. Wireless said it is conducting tests with banks in Mexico as well as Latin America.
The First Data/Celltel system is available in the United States through merchant banks and independent sales organizations.