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Pay by Credit, Transaction by Wi-Fi

It's been said that the promise of Wi-Fi will only be fulfilled when vendors start rolling out the applications that make the technology worth using. E-mail in a coffee shop is nicebut isn't there something more? Slowly but surely, that 'something more' is coming to market.

Take for instance the EasySwipe Wi-Fi based credit card terminal from Santa Barbara, Calif.-based PayJunction . Starting with PalmOne's Tungsten C Wi-Fi unit, PayJunction outfits these devices with backup batteries, thermal printers, magnetic card readers and software that allows for real-time credit card transactions, digital signature storage and transaction history.

The net result is a unit that can process credit card transactions in real time, anywhere within range of a hotspot.

Company President Randy Modos envisions a range of uses, for instance in settings such as flea markets and open-air street markets. The venue's operator could set up a hotspot, lease out the credit card devices to vendors and enable real-time credit card verification. This makes the market a more attractive destination for vendors, while at the same time providing a new revenue stream for the site operator through the lease of the devices.

"This is something people have talked about for a long time, being able to do point-of-purchase transactions in environments such as these," says Ben Bajarin, an analyst at Creative Strategies in Campbell, Calif. "Will it take Wi-Fi to the next level? We don't know. But it certainly will help. It's an interesting application that would not necessarily have been possible without Wi-Fi."

In another possible use, Modos has been working with a shuttle service at New York's La Guardia Airport, where terminals are outfitted for Wi-Fi. He has built a custom application that calculates a flat rate for each ride. This application then processes the payment transactions via a Wi-Fi link.

Using existing technology, he says, "the drivers would have to have a box the size of luggage, accessing splotchy radio networks."

As he explores possible uses, Modos is most eager to get into convention centers, where trade shows and other big events could provide an ideal proving ground for his firm's technology. Right now, these sites are looking to hotspots largely as a way to deliver pay-as-you-go Internet access, but demand for that kind of service remains tenuous at best. Add on the possibility of credit card processing, "and now you have a completely viable business tool," says Modos.

Such a tool could be a strong incentive for vendors to come to a site. Credit card companies typically charge vendors a higher rate for credit card purchases processed back at the home office, as opposed those verified with the consumer present, Modos explains. Thus, a convention center that could offer on-site transaction processing via Wi-Fi could in fact claim to be saving money for vendors who participate.

Rather than approach such venues one by one, Modos is at present reaching out to the big hotspot vendors, the Wi-Fi service providers whose national reach already has extended to touch many such venues. "They have the initial relationships in the zones where the networks are going to be deployed, and they understand the technology the best," says Modos. While he has not struck a deal with any of these players, he expects to open negotiations in the coming months.

From PayJunction's point of view, such a partnership would offer a win all around. The venue gets a value-added product offering, along with a potential new revenue stream. PayJunction gets its product on the street. And the hotspot providers get a strong new selling point.

"The convention center typically says: 'Why am I going to put this in here?' Now we walk in and say, here is a business tool to do real-time authorizations anywhere in your conference center," says Modos.

Bajarin sees promise in this kind of sales model, which could potentially get PayJunction into the hands of users without the firm's having to go through the trouble and expense of building its own sales organization on the ground.

"The service providers are always looking for a new reason to get their hardware installed in a particular place," says Bajarin. "So if the service providers get interested in [sell in our product, it] could be good for them."