Phone Plus Prepaid: PoSA on the Move

By Tara Seals

Posted: 12/2002

PoSA on the Move

By Tara Seals

IMAGINE
LANDING AT NEW YORK City’s La Guardia airport in the snow. You collect your
luggage, rush outside, huddle against the chill wind and hop into a cab. You
can’t wait to check into the hotel, unpack, get warm and call home … only,
your cell phone doesn’t work on this side of the Mississippi, and who wants to
pay those $25 hotel surcharges? Fortunately for you, your cabbie can help you
out by selling you a point-of-sale activated (PoSA) calling card right there in
the warmth of the taxi.

The new wireless PoSA technology is
from Radiant Telecom and is based on Comstar Interactive Corp.’s "Charge
Anywhere" wireless credit card processing solution, which has been
integrated with Radiant’s technology. The new solution potentially widens
prepaid card distribution to taxi drivers, tow-truck operators, flea market
attendants, delivery drivers and anyone else that works "in the field"
and could use some extra cash.

On-the-go businesses that cater to
potential consumers of prepaid cards can sell prepaid long-distance, wireless,
Internet, dial tone and bankcard products without having to stock inventory or
deal with the cash-flow concerns that come with reselling live product. These
distributors simply carry a stack of blank, valueless cards, paying nothing up
front. When a customer wants to buy, he or she swipes the Radiant card through
the Charge Anywhere device and assigns it a value on the fly, earning a
commission in the process.

"New technology is
significantly reducing distribution costs associated with prepaid
products," says Radiant’s vice president of strategy, Apurve Mehra.
"We have seen tremendous interest from credit card independent sales
organizations, taxicab and delivery businesses looking to capitalize on the
prepaid explosion."

The solution uses the Cingular
Wireless network to carry transactions with encryption, Research in Motion’s (RiM)
850/950 BlackBerry devices and the Comstar "sled," which is a card
reader that connects to the serial port connector on the BlackBerry device. The
package fits in the palm of the hand.

"The BlackBerry was developed
for the mobile professional who needed remote access to his desktop or corporate
e-mail," says Ken Racioppi, a sales executive at Comstar. "This device
has a 386 chip in it, so there’s a lot more you can do with it besides send and
receive e-mails."

Comstar’s Charge Anywhere program
was developed to transmit credit card transactions and to complete approval
process in a few seconds. Typically, a limousine driver whose passenger wants to
pay by credit card would slide the card and capture the information, then either
call it in or take it back to the shop and key it in to a pad later in order to
get an approval code.

"And you pay a higher rate when
you do that because the card’s not present, so there’s a lot more room for fraud
and charge back when you do that," says Racioppi. With Charge Anywhere, the
limo operator can swipe the card and get the approval code at the same time.

The custom application that Radiant
works similarly, but instead of approval codes, it receives activations and PIN
numbers.

"It’s
all automated — no worries about calling it in or making sure you have enough
$10 or $20 cards on you," says Racioppi. "You can just activate the
card through our device, request the denomination you would like it to be, and
once you swipe it through, Radiant will send back the four-digit PIN so the card
is ready immediately."

Comstar may market the application
to other prepaid companies. "We haven’t talked about exclusivities with
Radiant, so this is something we could offer out to any prepaid calling
platform," says Racioppi. "[The proposition is] you can activate cards
with a lot of that back office cut out of the equation."

The device preserves the
functionality the BlackBerry offers, so distributors also can send and receive
e-mails, maintain an address book, schedule and appointments, and use a
calculator.

For the credit card side, Comstar
offers a back-end reporting system, the transaction manager, which also may be
adapted for the prepaid card application.

For example, if a limousine operator
deployed 20 of the devices to his or her drivers, the operator could go to a Web
site with a secured user name and password and see every transaction as it is
happening, cross-referenced by driver. The operator can take that data and
export it to a Microsoft Excel spreadsheet and generate reports to help dole out
commissions.

"We’re getting there with the
Radiant application, still in production with it. It makes it an all-in-one
solution," says Racioppi. "Charge Anywhere is a solution because it’s
more than the sled and the software and the BlackBerry."

Radiant provides prepaid products to
more than 300,000 retailers selling Radiant’s products within the United States,
says the company. It may be adding many more to its ranks, including Comstar
salespeople.