The market for wireless point-of-sale credit and debit card transactions is about to heat up. Founded in 2002, Boston-based Way Systems Inc. is introducing a point-to-point processing system that includes mobile phones equipped with card swipes, security and transaction programming, and keypads for personal identification numbers. The swipe, keypad, and microprocessor controlling the processing function all fit into a module that in turn slides onto the back of a conventional cell phone, plugging into the phone's SIM slot. The company has just begun shipping its device, which is intended to work with phones operating on the GSM standard, and has a few hundred in place, but plans to have “thousands” in the market by year's end, says Will Graylin, chief executive. Already, Way Systems has attracted financing from TNS Inc., which earlier this year acquired U.S. Wireless Data, and William Melton, a transaction-industry pioneer best known for founding VeriFone Inc. It has also forged a strategic partnership with Visa International and cut a deal with Siemens A.G.under which mobile merchants will receive handhelds already equipped and ready to go. Way has built a server to manage devices and funnel transactions to gateways, including the Synapse gateway, which TNS acquired when it bought U.S. Wireless Data. Through these gateways, it has access to most of largest acquirers and back-end processors for credit and debit card transactions. It is aiming its devices at a market of 10 million plus tradesmen, direct salespeople, flea markets, and taxi and limo operators, and plans to reach them through independent sales organizations working with acquirers to which has gateway links. Way Systems' module includes a microprocessor that runs data encryption and allows the card swipe and PIN pad to communicate with the mobile carrier. “This allows us to have full access to the phone without changing the phone or the mobile operator,” says Graylin. The advantage in this, he says, is that transactions can be swiped securely, as at a fixed point of sale, and Way can rely on the investment already sunk in mobile phone technology, which holds down its own costs. “We're leveraging off devices that are being produced in the millions,” he says. He refuses to give specific costs but says a Way-equipped device typically costs one-half to one-third less than competing mobile POS devices. Way charges merchants a monthly service fee, which includes the cellular carrier's charge as well as all gateway and acquirer fees.
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