U.S. Wireless Data Inc. and Hypercom Inc. have teamed up to create a wireless point of sale terminal.
The terminal, a modified version of Hypercom's T7E product, is being designed to appeal to merchants at locations where ordinary phone lines are either of poor quality or nonexistent.
"Our agreement with Hypercom has significant stategic importance in addressing additional U.S. and international market demand, particularly where land-line terminals are not an option," said Maurice Caldwell, president and chief executive officer of U.S. Wireless Data.
Phoenix-based Hypercom is the nation's second-largest point of sale terminal provider, behind Verifone Inc. Hypercom said it would retain exclusive distribution rights to the terminal for several of its most prominent customers, including American Express Co., GE Capital Corp., Electronic Data Systems Corp., and Card Establishment Services Inc.
Otherwise, the two companies are free to market the terminal to any merchant or merchant service provider. U.S. Wireless Data, which is based in Boulder, Colo., designs, develops, and markets wireless credit card and check verification products.
Mr. Caldwell indicated that one of the agreement's major benefits for U.S. Wireless is the access the company gains to Hypercom's extensive client base.
If the company completes its acquisition of Direct Data Inc., as expected, the access to Hypercom's clients may prove even more valuable. U.S. Wireless announced its intention to acquire Direct Data in late June.
Severing a Verifone Tie
Direct Data, Hartland, Wis., specializes in the marketing and sale of point of sale equipment. It distributed $35 million worth of Verifone terminals in 1993 and had overall revenues topping $200 million.
Direct Data has severed its ties to Verifone. U.S. Wireless hopes to tap into Direct Data's point of sale marketing savvy.
In addition to its sales experience, Direct Data would also bring to U.S. Wireless a wide array of products -- including smart card readers, check readers, and bar-code readers. The deal is subject to conditions including approval of both parties' boards of directors.
If completed, the deal is also likely to benefit Hypercom, which is struggling in the market-share race with Verifone. Verifone holds more than half the point of sale terminal market; Hypercom, less than 10%.