Working with several technology partners, Verifone Inc. will offer merchants a service meant to give fast digital access to payment networks.

The service, called Digital Xpress, will be piloted in California later this year and then rolled out to the rest of the nation.

Verifone said Digital Xpress brings together the components needed to deliver transactions between retail sites and host computers for payment authorization, and settlement.

Verifone's partners in this venture are Pacific Bell, a regional bell operating company; Compuserve, which provides network services; and Telrad Telecommunications Inc., a manufacturer of telephone systems and integrated services digital network, or ISDN, equipment.

"There's a whole new level of complexity involved in getting ISDN systems," said John F. Menzel, Verifone's marketing manager. He said the technology has been too expensive for many merchants, especially smaller ones.

"A turnkey solution is needed to drive a new product into the market," he added, "which is why we joined up with these partners."

The service includes transaction automations systems at the point of sale; terminal adapters to link the point of sale systems to an integrated services digital network; a local ISDN carrier service for the merchant site; a long-distance ISDN carrier service for interfacing with national payment networks; and financing and support services.

ISDN technology offers merchants faster authorization response times than conventional dial-up access methods. For example, retailers can expect to receive credit card authorizations in four to six seconds over an ISDN line, compared with 30 seconds using conventional dial-up technologies.

In addition, ISDN can transmit voice and digital data simultaneously over the same line, saving merchants the cost of a separate line for POS debit transactions.

ISDN can also support as many as eight transaction automation systems on one line.

Verifone executives believe that by combining the various pieces of the ISDN technology into one solution at a competitive price, they will bring more merchants into the ISDN world.

"In 10 years, 80% of the products we sell will support ISDN technology," predicted Mr. Menzel. "By changing the pricing paradigm and bundling the services together, we are telling the merchants that they don't have to worry, and that we're taking care of all the behind-the-scenes technology to make their systems work."

Verifone, which is headquartered in Redwood City, Calif., decided to pilot the new service in California because of the penetration of POS debit there.

"We're talking to some major accounts, some big California banks," Mr. Menzel said, "and they see this as a platform to offer a full range of services, including debit and credit authorizations, but also home banking and more." centered line needed here

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Verifone announced the establishment of its first Latin American subsidiary, Verifone SA de CV in Mexico City.

Though Verifone has been selling systems in Mexico since 1986, setting up a separate company "reflects the strategic importance of this country market as well as Verifone's commitment to strengthening its presence in Mexico," said Gary L. Grant, Verifone's vice president for the Americas. He is based in Redwood City, Calif.

Mr. Grant also said the direct presence, established with the support of Verifone's Mexican marketing partner Pentamex SA, "will help us better manage the implications of the North American Free Trade Agreement (and) enhance Verifone's ability to support its many U.S. customers as they expand their business into Mexico."

Mexico is widely seen as the biggest of the emerging Latin American growth opportunities in payment systems. Many U.S. companies that offer or support credit cards and other consumer credit services have been jockeying for position in the wake of Nafta.

According to The Nilson Report, Mexico is seventh in the world in bank card volume, with $18.86 billion in 1993.

Hypercom Inc., Verifone's Phoenix-based rival in the point of sale terminal business, has made Latin American growth a priority, coordinated by its Hypercom Latino America Inc. subsidiary in Miami.

Verifone said its Mexican affiliate will have staff dedicated to direct sales, marketing, technical support, and after-sale service. Jorge Bobadilla, formerly director of transaction automation for Pentamex, will assume the role of country manager.

The office becomes part of Verifone's global network of more than 30 facilities - including regional offices, development centers, and manufacturing and distribution centers - serving 85 countries. -Jeffrey Kutler

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