RANCHO SANTA MARGARITA, CALIF. – When Michelle Dubé, a golf
instructor in Rancho Santa Margarita, Calif., finishes up a
lesson, she whips out her BlackBerry wireless device – to
schedule the next appointment, sure, but also to swipe the
student's credit card for payment right there on the
driving range. It takes only a few seconds, and it saves
Dubé a trip to the bank. Plus, her clients like
it. "They're just surprised – they're like, 'Wow, you're a
techno-wizard,"' she said.
Plumbers, limousine drivers, flea market proprietors and
merchants of all size and stripe are beginning to take
credit and debit cards in odd places, often using nothing
more than an ordinary cell phone. Now that wireless
networks span the globe and devices that tap into them are
cheap and reliable, expectations for the technology are
Already, some U.S. restaurants are installing wireless
systems that let waiters swipe your credit card tableside –
a practice that is widespread in Europe, as are taxis that
accept credit cards in the car. A day could soon come when
a clerk at a large department store will ask you in the
aisle if you would like to check out there. How about a
shopping cart at the grocery store with a built-in scanner
and card reader?
"It's a whole new world that's opening," said Doug Byerley,
a senior vice president at First Data Corp., the largest
U.S. card processor, "and it's all being brought about
because of wireless communications."
Wireless credit card acceptance is not new. But within the
last year or two, as wireless companies have improved their
networks and hand-held devices have come down in price, the
technology has started to look like an attractive
alternative to dial-up payment machines.
Retailers of all size have found that customers tend to
spend more money when they are not limited by the amount of
cash in their wallets. Greg Crance, who sells hot dogs from
a boat in the Delaware River to tourists who raft and canoe
there in the summer, said that revenues had risen since he
bought a cell phone that accepts credit cards five years
ago. He worries less about employee theft because his
system notifies him of all card sales and gives him a daily
Security is not a concern because the wireless devices
convey account information with the same heavy level of
encryption as plugged-in terminals, if not more. For
merchants who normally phone in customers' credit card
numbers for approval, there are price breaks: banks charge
retailers a lower rate when the actual card is swiped and
the account information is conveyed electronically.
"The average cost per merchant on a monthly basis is $20 to
$30, which in most cases is less than the cost of a phone
line," said Paul Rasori, vice president for marketing at
Verifone, a terminal maker based in San Jose, Calif.
For small merchants, a cell phone equipped with card-
acceptance software can cost as little as $200 or $250,
which can often be recouped through higher sales volumes or
lower card-acceptance fees.
"If you run a sandwich shop in downtown New York and you
have a two-hour period during the day where all your
business happens, it matters to you if it takes 30 seconds
for a dial-up credit card transaction, and it's important
to you that wireless can do it in two seconds," Rasori
For larger retailers, which are still heavily wedded to
elaborate dial-up systems, the shift to wireless will take
longer, but many in the industry view it as inevitable.
Some retailers are experimenting with hand-helds as a way
to make sure that people waiting in long lines for a
cashier do not give up and abandon their merchandise.
"If you're buying a couple of dresses, a retail store wants
the ability to walk up to you at that time, read the tags
on the clothing items and create a sale right there," said
O.B. Rawls, president of the North America region for
Hypercom, a company based in Phoenix that sells payment
card terminals and technology. "In a wireless mode, you can
take advantage of impulse buying."
Dave Hogan of the National Retail Federation, a trade
group, said members were studying the costs and benefits of
upgrading to wireless checkout technology, but that such
conversions would take time. Many retailers updated their
payment systems right before 2000, when wireless was not
that prevalent, he said, and it usually takes seven-to-10
years for a company to revisit such decisions.
"The name of the game today is speed," said Niki Manby,
vice president for market and technology innovation at Visa
U.S.A. "The name of the game tomorrow is going to be all
these value-added experiences that merchants want to offer
to their customers."
Not all companies with mobile employees are convinced.
Previous generations of mobile terminals had a reputation
for losing signal connections and breaking. Domino's, the
U.S. pizza delivery chain, has experimented with wireless
terminals but has so far rejected them.
"We found in the early tests it was hard for drivers to
drive if they had these things on their belts," said Tim
McIntyre, a Domino's spokesman. "In the course of working
in a car and a pizza store, some of these things weren't as
durable as they needed to be, and once they were
manufactured to be durable enough, they were no longer cost-
effective." Domino's does accept credit cards by telephone
and gives customers receipts to sign at their front
door, "but we haven't reached the point where we just walk
up and you just swipe your card," McIntyre said.
Still, even some smaller businesses are carefully mapping a
future that leans on wireless payments. Kerri Evans, who
runs a mobile dog-grooming business in Mountain View,
Calif., has hired a technology consultant to set up a
BlackBerry-based system that will both track appointments
and handle card payments; she hopes to get her four
groomers geared up within six months.
"Because I'm based in Silicon Valley, I definitely want
people to think I'm technology-forward," Evans said. "And
wireless credit cards are coming."