Wireless devices to handle credit card transactions

Aether and Visa join forces

OmniSky offers Net service

May 04, 2000|By Amanda J. Crawford and Mark Guidera | Amanda J. Crawford and Mark Guidera,SUN STAFF

Credit card giant Visa and Aether Systems Inc., the fast-growing wireless applications company, said yesterday that they plan to jointly develop a way for people to make credit-card transactions over their cell phones, pagers and other hand-held devices.

The new services could be unveiled as early as this summer, Owings Mills-based Aether said.

Also yesterday, OmniSky Corp., a joint venture of Aether and California-based 3Com Corp., announced the launch of a wireless Internet service.

Shares of Aether soared almost 10 percent on the announcements yesterday. Shares closed at $150, up $13.

Rod Stambaugh, general manager for wireless commerce at Aether, said the company plans to move quickly with Visa to develop new services and products that will allow consumers to make purchases and payments over hand-held devices. For example, he said, it might be possible one day to use a cell phone to make a mortgage payment while on vacation in another state.

Stambaugh said Aether expects to make money from the venture by getting a slice of the percentage merchants pay Visa for each credit card transaction. That fee averages 2 to 4 percent. Aether also plans to sell the wireless transaction service to banks and other financial institutions interested in offering their own branded wireless payment service to customers, he said.

Wireless commerce is emerging as a hotly contested field.

"It's very competitive and fragmented right now," said Stambaugh. "Our plan is to partner with the dominant and trusted players."

The OmniSky service uses Aether's ScoutWare software to transform Web content into a format that is easily readable on handheld devices.

The service is available through AT&T's Wireless Services' network for use with a wireless modem and Palm Inc. electronic organizers or similar devices.

Larry Roshfeld, senior vice president for Aether Software, the product division of Aether Systems, called the service "wireless AOL."

He said OmniSky is the first wireless service to provide Palm users with access to the entire World Wide Web.

Aether's software enables OmniSky to instantly convert Web content into a format for hand-held devices. Other wireless services offer only limited Web access because each page must be manually converted, Roshfeld said.

For $39.95 a month, customers will get unlimited use with access to up to six e-mail accounts. The service will be available in 70 percent of the United States, including Baltimore and most major metropolitan markets. Roshfeld said OmniSky expects 50,000 customers to sign up in the first year.

Riyad Said, senior analyst with Friedman, Billings, Ramsey & Co., said there is a growing demand for the kind of service OmniSky is offering.

"It is a very robust offering and I suspect this is the first wave of this type of service offering," he said. "They are at the forefront of delivering this capability to Palm customers, no question."

Aether owns a 30 percent stake of OmniSky. 3Com, which owns an equal amount, also holds a major stake in Palm Inc., the former subsidiary spun out in a March initial public offering.

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