The wireless point of sale market is heating up, and while the designs vary, the growth potential seems clear.
The terminals are still quite new, and many start-up manufacturers are hooking their fortunes to a variety of hand-held digital devices, such as cell phones, Palm Pilots, and Blackberries.
Workers in industries known for providing services in homes or public spaces, such as plumbers, electricians, and taxi drivers, say the terminals are not only another way to accept a payment, but a safer and less expensive one.
With "a wireless terminal I can go out and authorize a transaction," said Paul Jamieson, the president of FiSite Research in Lakewood, Colo. "I can make sure that the card is valid … the amount that I'm authorizing is valid. I can reduce the cost of that transaction."
David Robertson, the president of the Oxnard, Calif., card industry newsletter The Nilson Report, said the wireless market has been growing steadily for several years and is expected to continue to grow.
"The current barriers will be nonexistent in a relatively short period of time," he said. "Everything will get better, and the upside is so strong for all parties."
While Mr. Robertson does not expect them to replace traditional terminals any time soon, he does say that wireless devices could eventually transform how and where big retailers conduct sales.
"You've got the potential for clearing space at the checkout counter, or having sales personnel generating payments in the aisle, as opposed to congregating all the payers in one spot," he said.
One of the newer manufacturers in the wireless industry is Comstar Interactive Corp., which in April won a patent for a card-reading terminal that employs a Blackberry (a device that, like cell phones and Palm Pilots, transmits information).
"We spent the last year building our distribution channels," said J.D. Gardner, the Edison, N.J., company's president and chief executive officer. It has worked out deals with about 40 independent sales organizations, which already sell its Charge Anywhere credit card processing technology, to market the terminals.
The devices currently cannot process PIN debit transactions, and Mr. Gardner said there has been little interest in that business. Comstar has about 1,000 customers and is adding an average of 10 a day, he said.
While coverage for cell phones can be spotty, wireless point of sale terminals tend to have less trouble, because mobile workers tend to stay within a specified area. If a customer moves beyond that area, the machine can store a transaction and transmit it later.
"About 95% of the time you're going to be in coverage, but for those instances where you're not, [customers have] asked us for the ability to capture those transactions and send those later," Mr. Gardner said.
Creditel Corp. of Los Angeles has developed a terminal that uses a cell phone to move the transaction information. Nextel Communications Inc. of Reston, Va., and Motorola Inc. of Schaumburg, Ill., which provides wireless phones to Nextel, are marketing the new machines.
Michael Cottrell, Creditel's senior vice president of market development, said it "hit the streets running" last month with an order for 1,000 units. Nextel has 12 million customers, 9 million of which are businesses, he said.
He called the cell phone a better "blue-collar" attachment than a pricey Blackberry. "For point of sale, you want the lower-cost devices. That's what you're going to give your field employees."
Jonna Kurucz, the vice president for financial services at Nextel, said future enhancements should make the devices more attractive, such as the ability to transfer credit card balances to another card or to get the cardholder's credit score.
This year Verifone Inc., one of the world's largest payment terminal manufacturers, began marketing its own wireless device, the Omni 3600, which is not attached to a mobile device like a cell phone.
"It's an interesting marriage, but there are some deficiencies," said Bill Nichols, of the Santa Clara, Calif., company's market director. "It's two separate devices that you have to clip together. This year's version might not be the same as last year's dimensions."
Verifone, which is majority owned by the Chicago venture capital group GTCR Golder Rauner LLC, has deployed the devices so far in Latin America and the Caribbean. Mr. Nichols said it has sold close to 10,000 of the terminals, which have generated "maybe about 5%" of its international business. "It's not a big market but it definitely fills a niche. It's definitely growing."
In the United States, Verifone is looking to run wireless point of sale transactions through the data network - the excess capacity not being used by telecom companies - which would be significantly less expensive than the voice network, Mr. Nichols said.
Within five years the market for wireless machines could grow to nearly 30% of the total point of sale terminal market, he predicted. "I think that time is coming very quickly because people want the mobility and the flexibility."
