The explosion of wireless commerce has given the data security vendor Diversinet Corp. a burst of energy.
The Toronto company, which develops digital certificate software for mobile phones, small computing appliances, and smart cards, announced cooperation agreements with BellSouth Wireless Data and two other companies active in delivering a range of information services to hand-held devices.
With a fourth company -- Ubiq Communications Inc. -- Diversinet announced an acquisition deal Sept. 30.
Ubiq, a wireless systems developer active in the financial industry and based in Mahwah, N.J., agreed to be acquired by Diversinet for $1 million of stock, though that could triple if certain performance targets are met. Ubiq became a Diversinet licensee early this year.
Among Ubiq's projects was one for First Call Corp., a Thomson Financial company, to deliver customized company financials and rating information for financial analysts. (American Banker is also part of Thomson Financial.)
Diversinet's Passport security software, which manages a slimmed-down version of the digital certificates that are increasingly used to authenticate business communications, is embedded in interactive pagers manufactured by Research in Motion Ltd. of Canada and distributed by the BellSouth Intelligent Wireless Network.
BellSouth has identified stock trading, banking, shopping, and health care as key elements of its wireless data strategy. Diversinet said it expects to begin testing medical uses of the technology -- such as doctors' transmitting prescriptions to pharmacies -- with BellSouth by yearend.
"In essence, Diversinet makes wireless e-commerce happen," said Nagy Moustafa, the company's president and chief executive officer. "Without an enhanced level of security, none of the exciting wireless commerce applications will succeed because users won't trust the safety of their transactions."
He said he viewed the Ubiq acquisition, expected to close in November, as a springboard for U.S. growth. Ubiq's focus is on stock trading, financial analysis, and medical data -- "exactly the types of services that are prime candidates for Diversinet's Passport security software," Mr. Moustafa said.
Diversinet addresses the constrained processing capabilities of small devices and smart cards with a patented approach to data encryption that lessens the processing burden.
Mr. Moustafa said the authentication of buyers and sellers ensures the necessary trust for electronic commerce. "The software also provides an audit trail that is vital if the transaction is ever disputed," he said.
Diversinet's other agreements, announced at a recent wireless-industry trade show, were with Saraide of San Francisco and WS Communications LLC of New York.
Saraide, a joint venture of Nortel Networks of Canada, Deutsche Telekom of Germany, and several other companies, is a leader in delivering e-mail, stock quotes, banking, and other services via the Internet to wireless devices. It is using Diversinet software for phones conforming to the GSM -- Global System for Mobile communications -- standard that is particularly prominent in Europe. GSM requires a smart card chip to authenticate the customer.
Saraide's chief executive officer is Hatim A. Tyabji, the former CEO of Verifone Inc., now a Hewlett-Packard Co. subsidiary, who is regarded as a top payment systems visionary.
With security software incorporated in GSM smart cards, "wireless operators will be able to offer a wealth of new services such as banking, stock trading, medical data, and corporate information with the assurance that sensitive data are secure," Mr. Moustafa said.
WS Communications, a consulting firm and systems integrator, said it will use Diversinet certificates for every wireless subscriber to its financial services and electronic commerce applications. Among the devices WS uses is the one BellSouth is keen on -- the Interactive Pager 950 from Research in Motion.
Michael Green, WS Communications principal, said: "Wireless capabilities are becoming increasingly important for active traders, but they must be assured their transactions are safe. Diversinet's security software provides that crucial security."
Derek Roga, also a WS principal, said, "As traditional e-commerce from the Internet expands to the wireless world, nonrepudiation and security of each transaction are paramount." He said Diversinet's Passport "provides this to our clients."
SAN FRANCISCO -- Visa International announced that it has become a member of the WAP Forum, a multi-industry organization that supports and promotes the Wireless Application Protocol as a standard for delivering information services to mobile phones and computing devices.
Major cellular telephone companies such as Ericsson and Nokia form the core of the WAP Forum along with technology providers.
Visa is the first payment association to join. WAP Forum chairman Gregory Williams said that "its experience in both electronic commerce and chip technology will provide a significant contribution to the work of the forum," which has well over 100 members.
"The rapid growth in mobile phones and other wireless devices, together with the Internet, has opened up a whole new environment in which banks can use their Visa payment cards to truly provide anytime, anywhere access to a wide range of services and products," said Philip Yen, the card organization's senior vice president of emerging technologies.
"But it is imperative that a global standard exists to ensure compatibility of devices and the highest level of security," Mr. Yen added.
Visa is planning to participate in a pilot next summer with Nokia and MeritaNordbanken in Scandinavia to allow bank customers to make payments in stores or over the Internet using a mobile phone. Smart cards and the Secure Electronic Transaction payment protocol for the Internet are to be part of the trial.
Visa is also part of a cross-industry alliance -- the Asia Mobile Electronic Services Alliance -- that is building a mobile communications and smart card infrastructure for commerce in Hong Kong, Singapore, and other markets. Like the Scandinavian system, it will run on the Visa Open Platform specification using Sun Microsystems Inc.'s Java technology.