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 January 09, 2001
Palm eWallet Technology

 Consumer Electronics Show: Consumers will have a richer experience every time they use their future wallets eWallets as a result of new advancements from Palm, Inc.. In addition to being able to make secure purchases via a Palm handheld's infrared beam, new personalized and interactive services now are possible and practical.

In addition to replacing the standard paymentcard swipe at retail outlets, Palm believes that over time, the users of millions of Palm Powered handhelds with infrared beaming capability will be able to do the following two-way activities:

- manage and stretch their dollars through accurate and automatic recordkeeping;
- receive eCoupons for products and services;
- get automatic prompts about personally relevant entertainment or purchases; and
- always know the status of their loyalty programs, such as those for airline mileage or hotel stays.

Palm handhelds already can hold photographs, and the company is working on solutions now that will permit a driver's license, healthcare card and other personal identification documents to be contained on a handheld. Add to that the financial transactions and ability to receive personalized services, and the growth opportunities for eWallets become clear.

Historic eWallet Purchase

Palm demonstrated the payment breakthrough at the Consumer Electronics Show (CES) during a keynote address by Carl Yankowski, Palm chief executive officer. Yankowski conducted the world's first electronic purchase from a handheld computer interacting with a retail pointofsale terminal, choosing a car cellphone system with Hear It Again Memory, an atomic watch, and a Sony AIBO from among the products at a Sharper Image storefront on stage.

Here's how it worked:

- After choosing his purchases and agreeing to the price plus tax, Yankowski pointed his Palm handheld toward the pointofsale Ingenico terminal and activated the eWallet by pushing a shortcut button.
- He then selected his payment method a Visa card embedded in the Palm eWallet application and this initiated the purchase.
- Then, he entered a PIN (personal identification number) onto the handheld's screen. This act identified Yankowski and his account number securely. He tapped "OK," concluding his part of the transaction.
- The Ingenico terminal received Yankowski's beam as an encrypted message, keeping it safe from misuse.
- The Ingenico terminal then sent the secure information about the total purchase price and Yankowski's paymentcard account number to the Sharper Image merchant account. Yankowski received a hardcopy receipt as well as a digital one.
- Sharper Image received the transaction information and recorded it as revenue.
- In a few weeks, Yankowski will receive his Visa bill including the Sharper Image purchase in the mail, the old-fashioned way.

The entire transaction took only seconds, significantly shorter than the time to use a cardswipe process, secure a handwritten signature and print a hardcopy receipt.

"The most obvious and immediate way this Palm advancement will change people's lives is that in the future, Palm handheld users could begin to be able to beam their way quickly through checkout and return counters, using their Palm Powered devices," Yankowski said. "But in addition to paying out money for purchases, consumers can take in new services simultaneously and dynamically."

For example, buying a sweater or paying college tuition with a frequent flyer Visa card embedded in the Palm handheld would result in an automatic entry in the person's financial management software program, and an immediate boost to his or her frequentflyer mileage program.

"Once a significant number of businesses adopt this IR technology, we believe consumers will grow comfortable discarding their bulky, disorganized wallets for a digital alternative that provides real twoway service," Yankowski said. "Visa, Igenico and VeriFone leaders in secure financial transactions are working closely with us to make this a reality."

Market research firm IDC has been watching this marketplace and the evolving needs of an increasingly mobile population.

"eWallet technology can offer enterprises and individual users fast and increasingly more secure wireless transactions and management," said Kevin Burden, senior analyst, smart handheld devices at IDC. "This technology is a natural extension to the already strong feature set of Palm handhelds."

Infrastructure Requirements and the Players

To make these transactions happen simply and securely for consumers and retailers alike, Palm is working with Ingenico and HewlettPackard's VeriFone division, leading providers of credit card payment infrastructure in Europe and the United States respectively. Igenico intends to roll out the initial pilot solution beginning today in Europe, and VeriFone intends to roll it out later this quarter in the United States.

According to Bernard Morvant, senior vice president, Global Business Development and Partnerships, of Group Ingenico, "The eWallet will provide new advantages for consumers. Imagine always knowing exactly what your credit balances are, or the simplicity of reconciling a monthly statement by matching the actual transactions from your handheld. This is the promise of this new eWallet technology. We are pleased to be part of this breakthrough demonstration onstage today with Palm."

According to PierreFrancois Catte, vice president and general manager of VeriFone, "VeriFone believes that providing secure pointandpay capabilities offers merchants and consumers immense opportunities because of the variety of payment options and nonpayment valueadded eservices possible. To make it simple for consumers and merchants alike to use this new technology, Palm and VeriFone have collaborated to enable the secure link between the products that consumers are already carrying and the infrastructure we've already installed worldwide for retailers."

The necessary IR receiver can be added to standard, currently installed pointofsale terminals. In the future, this communication link could be provided using Bluetooth technology.

Palm is also collaborating with leading payment organizations, such as Visa International, to enable customer adoption and add such features as easytouse statements that can be viewed on a handheld.

"It is entirely appropriate that the start of 2001 is marked by the first handheld transaction using a Palm device and a pointofsale terminal," said Gaylon Howe, executive vice president, Consumer Product Platforms, Visa International. "We expect to see significant developments in the ability of buyers and sellers to conduct commerce anywhere, anytime, over any type of device, simply and securely. As a leader in setting and using standards, we will work to enable our member banks to take advantage of this new technology to provide new services and add value to existing products."

Ingenico and VeriFone will demonstrate eWallet capabilities with their transaction terminals at Palm's booth, No. 24000, at CES.