CDPD's retail hope: Wireless data technology finds point-of-sale niche

Just as impending wideband wireless networks have begun threatening to eclipse the concept of narrowband wireless data, cellular digital packet data seems to have settled into a suitable commercial niche.

CDPD technology-which is widely deployed as an overlay in cellular networks-has struggled to find its place in the telecom services realm, hovering for some time in low-volume vertical applications such as vending machine monitoring and vehicle tracking. But recent developments indicate that the technology could be crossing the line into more vertical applications as it proves to be economical and efficient for retail point-of-sale credit card processing.

Those developments are both fixed and mobile in nature. Bell Atlantic Mobile is a long-time carrier champion of CDPD, providing a mixed bag of services ranging from Internet access to monitoring. Earlier this month, the company announced that People's Cab of Pittsburgh had begun using BAM's CDPD network to process credit card payments more quickly and securely.

People's Cab and BAM are working in conjunction with ECS, an independent service organization that processes credit card services, to equip the company's entire fleet with point-of-sale units and train drivers to use them. BAM's CDPD point-of-sale plans are not limited to mobile applications, however-the carrier also offers the service to vendors at remote locations such as trade shows and sporting events.

"The wireless point-of-sale application is not just for people that are driving around," said Jerry Fountain, regional vice president for Bell Atlantic Mobile in Pittsburgh. "It's also for people who are at a location and can benefit from the lower cost and faster processing. It can typically be the same cost or lower than your average credit card transaction."

Low price points may be precisely the reason CDPD and point of sale make such good partners. As one industry analyst pointed out, CDPD is best-suited for services that require short, bursty transmission, and anything beyond that becomes cost-prohibitive.

"CDPD can be very cost-effective if you're doing transactions," said Ira Brodsky, president of Datacomm Research. "If you try to do something in volume, it can get pretty expensive."

AT&T Wireless Services, which also has a widespread CDPD network presence, recently announced a deal with a group of Texas businesses to do credit card processing via CDPD. The carrier is working with credit card transaction processor Unicard Systems and U.S. Wireless Data, manufacturer of the Tranz Enabler terminal. Again, the application has proved cost-competitive.

"CDPD gives better than leased-line performance at a lower cost," said Rod Stambaugh, chairman of U.S. Wireless Data. "We make merchants faster and more efficient. We deliver speed."

U.S. Wireless Data has steered clear of cab applications for economic reasons, Stambaugh said, choosing to concentrate instead on retail credit card processing and even prepaid applications for retail merchants. "We think that's really going to drive transaction volumes," he said.

Both carriers and equipment developers are excited about CDPD's potentially lucrative new niche, particularly because of the technology's history of stops and starts and applications that simply didn't pan out.

"As opposed to other wireless applications, here's an application you can easily quantify dollar-wise and security-wise," said Mark Lund, manager of wireless sales at Inet, an equipment manufacturer that markets PCMCIA card CDPD modems.

"There's a real benefit rather than nebulous advantage. It's an excellent application and hopefully something that will be more of a catalyst."

"Everyone's looking for the killer application," Stambaugh said. "I think it's retail point-of-sale."

CDPD's newfound retail glory is timely, given the data processing capabilities of current digital wireless networks and the even wider-band promises of next generation systems.

"The way things are going right now, point-of-sale is the area they have to concentrate on," said Brodsky of Datacomm Research. "With GSM and CDMA data coming, who's going to want to buy a special modem for CDPD?"