Fast-As-Cash Wireless

Someday, walking into a store or fast-food spot may be like stepping into an invisible Web of networks, each communicating with a number of devices for a variety of purposes. In addition to the much-hyped existing wireless networks, companies today are building and testing mobile-commerce services that may help solve tough problems with user identification and latency.

2Scoot, which offers a payment and collection platform, believes that macro wireless networks, such as those operated by Sprint PCS and AT&T Wireless, wont be used to make actual transactions inside stores. “Those networks are great for giving information to people at a distance,” says Joe Ely, vice president of technology at 2Scoot. But if a number of people were in a store carrying mobile phones, those networks wouldnt know which one of them was standing at the cash register trying to make a purchase using a mobile wallet stored in his or her handset.

Another hurdle to using the macro networks is latency. “In quick-serve restaurants, using credit has historically slowed the process down, and speed is everything,” said T.N. Thompson, vice president of business development at 2Scoot. In such environments, merchants wont want to wait for wireless handsets to communicate with networks to debit accounts or electronic wallets.

2Scoot is hammering out solutions to some of the problems in a trial with handset maker Nokia and chip manufacturer Texas Instruments at a combined Taco Bell/KFC store and a separate Taco Bell store, both in Raleigh, N.C. Nearly 400 users will trial the service.

Whats the Frequency?

TI built radio frequency identification, or RFID, chips into faceplates for Nokias 5100-series handsets. When users of the enabled handsets walk through the door, they swipe the phones over a scanner near the door. The secure RFID chip communicates with the scanner over the unlicensed short-haul 134-kilohertz frequency. Once the scanner identifies the device, it communicates over phone lines or Internet connections to a central database, which authorizes the users credit. When customers are ready to make purchases, they swipe their phones over a scanner at the register and their accounts are debited.

“It requires user participation,” Thompson says, which is important because potential customers may be wary of wireless networks that can automatically access information about them. For handset manufacturers, the setup is a step forward in the evolution of the phone as a payment device, he adds.

Strategis Group analyst James Mendelson anticipates more transaction-based wireless to be developed from a variety of sources, including wireless networks. “The model is to have lots of different options. This is a very small piece of a much bigger wireless commerce transaction marketplace.”