Further muscling its way into the merchant automated teller machine sector, U.S. Wireless Data, a provider of wireless access for point of sale terminals, has scored a second deal in a year with a top electronic funds transfer network.
The New York company announced Friday that it had signed an agreement with First Data Corp.'s NYCE network that would allow merchants to replace or retrofit ATMs that use standard dial-up telephone lines with wireless technology.
A year earlier U.S. Wireless Data made a similar deal with Concord EFS, the Memphis company that runs the Star EFT network. That deal covered both ATMs and point of sale devices.
Star and NYCE are the country's two biggest processors of ATM and online debit POS transactions.
"Our traditional market has been with POS, but it is fairly recently that we've made a concentrated effort to introduce it into the ATM market," said Heidi Goff, U.S. Wireless Data's president and chief operating officer.
There are about 250,000 merchant ATMs in the country. Ms. Goff said wireless ATMs give merchants more flexibility, because the machines are easily moved. "If you put your ATM in the store and it's not getting the type of traffic that you want, this product allows you to move it to a new location without moving your phone lines."
U.S. Wireless Data's Synapse Adapter submits transaction information to processors through wireless phone connections. Using the product, a merchant can move a machine outside a store - for example, to a "flea market for a three-day event, so that people can get cash in what is traditionally a cash market," Ms. Goff said.
John Berg, the director of alternative delivery services at NYCE, said Synapse will be useful in places "where a dial-up telecommunications line doesn't make logical sense."
Ms. Goff said that so far only a few hundred ATMs in the Star network have gone wireless, but that the agreement is still relatively new. U.S. Wireless Data will also try to strike a POS terminal deal with NYCE, she said.
Michael Strada, the president of Electronic Commerce Strategies, an Atlanta consulting company, predicted that wireless ATMs will grow more popular with merchants.
"There's a ton of retail ATMs out now [but] the profitability of a large number of them is marginal," he said. "As soon as it's deemed reliable and the economics are there, I think that the industry will go toward wireless for their new installations. Why would you install an ATM that's wired when you can have a wireless which gives you more flexibility?"
Meanwhile, U.S. Wireless Data is delving into other new markets, including vending machines and taxis. In December it signed an agreement with Pepsi-Cola North America that will put wireless credit card terminals in vending machines. The company also hopes to break into the taxi market by installing POS devices in meters.
"That opens up new markets to our customers, processors, and banks," Ms. Goff said.
