Zapping Payments Over Wireless Links

Someday soon, you might use your personal digital assistant orcell phone to pay for a cab ride, buy food at a fast-food restaurant, or purchase a soda from a vending machine without using cash or plastic.

Andersen Consulting has developed a prototype technology called Mobile Micropayments that, if commercialized, could let you zap payments over wireless links without having to load a special application onto your handheld. The technology is based on patent-pending research concepts and is designed to illustrate how consumers can purchase goods and services using an Internet billing system via a wireless device or a mobile phone. The Mobile Micropayments prototype incorporates the existing Qpass Inc. product to handle payment and billing. Qpass is commonly used to automatically pay road tolls using a small device you affix to your windshield.

Here's how Andersen's micropayments prototype works: Imagine you're walking past a vending machine but are out of change. Automatically, the screen of your mobile phone or PDA lights up with a menu of the drinks available from the machine. You then enter your personal identification number to authenticate the transaction and make your selection. The information is passed to the machine, which dispenses the soda and bills your online account. A key aspect of this technology is that you don't need to have a complex, custom application loaded on your handheld device. The vending machine or merchant device handles the processing, says Neill Cameron, Andersen Consulting's director of research incubation for Europe. The handheld is a dumb terminal that handles only payment authorization. This does away with the heavy infrastructure normally associated with wireless, he says.

Devices such as printers, cash registers, and vending machines will soon be able to communicate seamlessly with mobile phones that come within range, reconfiguring the display menus, options, and offerings as needed to enable various microtransactions, Andersen says. Andersen's prototype uses infrared signals to allow two-way communication between the cell phone and other devices. In the future, short-range radio technologies such as the emerging Bluetooth wireless standard will further expand the range of possibilities for this type of application.

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