MasterCard Signs with Radio-Link Vendor

MasterCard International has signed an agreement with a mobile communications company to let members use radio waves for faster credit card authorizations.

MasterCard is working with Ram Mobile Data, New York City, which will transmit transaction authorization data between point-of-sale terminals at merchant locations and Banknet, MasterCard's private global communications network.

Terms of the agreement were not released.

Using radio waves instead of regular dial-up telephone lines reduces the time it takes to send and receive credit card authorization.

Where Speed Matters

Terminal response times are 8 to 10 seconds using the Ram network rather than 12 to 30 seconds by telephone.

This is important for merchants such as fastfood outlets and supermarkets that want to accept credit cards but do not want to keep customers waiting in line for authorizations. It also allows mobile merchants, such as towing and limousine services, to take credit cards.

The fees for authorizations using radio waves will be in the same range as dial-up authorizations, said MasterCard officials, but retailers must buy a radio device. Sharon Cline, vice president of marketing for MasterCard's automated point-of-sale program, said the service would be rolled out in large metropolitan areas in early 1992. The company will conduct a pilot test later this year.

"Two-thirds of the time it takes to complete authorization is telephone dial-up time. The authorizations themselves take only two to three seconds," said George Dennis, a spokesman for Ram Mobile Data, a privately held company that has radio base stations in 15 major U.S. cities. "We can significantly shorten the authorization time."

The authorizations will be transmitted from the credit card terminal to a radio modem, which transmits the authorization request data to one of Ram's local radio base stations. From there, the data is transmitted over dedicated data communications lines to Banknet.

Other Radio Efforts

Credit card companies have been experimenting with radio waves for some time. MasterCard tested the technology last year with a company called Digital Radio Networks Inc.

Visa U.S.A. planned to work with Digital to use the radio transmission for Visa authorizations. DRN recently went out of business, however, and Visa has been looking for another provider. A spokesman said Visa wants to work with a partner that can transmit nationwide.

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