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4:30pm ET, 4/16

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Palm boasts first PDA credit card purchase

(IDG) -- Palm has partnered with payment software maker VeriFone and a point of sale terminal manufacturer to create a system that will allow Palm users to make credit card purchases using their handheld computer by year-end, Palm's CEO announced Saturday night.

To prove the point, Palm CEO Carl Yankowski performed what he called the world's first commercial credit card purchase using a handheld computer. Using the infrared port on his Palm, Yankowski beamed his personal credit card information to a cashier at a mock Sharper Image store set up on stage here at the Consumer Electronics Show.

"This may be Las Vegas but there's no smoke and mirrors here, this is the real McCoy" Yankowski said. "This is my real Visa, I'm probably going to get a real bill for this - in fact, I definitely am."

The electronic credit card demonstration is the first step in Palm's long-term vision to turn its handheld computers into "eWallets" that could replace the bundle of cards and paper that most people carry around in their wallets, such as a drivers license, library cards, health insurance cards and pictures of loved ones, as well as credit and debit cards, Yankowski said.

"Later this year you'll be able to use your Palm to make [secure point of sale] transactions as if a debit or credit card were in the device itself," the Palm chief promised. "Next holiday season we feel you'll be able to do your Christmas shopping by beaming your way through the checkout." INFOCENTER
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One attendee who watched Yankowski's speech was impressed by the technology, but said he'd need to learn more about how his sensitive data would be protected before he'd go on an electronic shopping spree.

"The thing that struck me was that my Palm could easily get stolen. That's not to say it doesn't work, but I'm not sure that the technology is quite there yet," said Walter Minkel, a technology editor with the School Library Journal, a professional publication for librarians.

To pay for his goods in the demonstration, Yankowski first entered a personal identification number to access an embedded Visa card application on his Palm computer. He then aimed the device at the point of sale terminal and beamed his card information to it. The encrypted data was transferred to the merchant's own accounting system, and Yankowski was presented with both a paper receipt and an electronic receipt stored in his Palm.

The bill for the credit card purchase will be delivered to Yankowski a few weeks later in the old fashioned way, by snail mail, said a Visa representative who joined the Palm chief on stage.

The point of sale terminals were made by Groupe Ingenico, which worked with Palm, VeriFone and Visa to create the payment system. The system is likely to be employed initially by hotels, restaurants, car-rental companies, clubs and department stores, because those types of outlets account for about a third of Ingenico's installed base of about three million POS terminals, Ingenico said in a statement. It wasn't immediately clear tonight how quickly - or whether - other POS or credit card providers would get involved with the scheme.

In addition to not having to swipe credit cards or sign paper receipts when they buy goods, the eWallet system could also enable users to receive coupons from companies electronically, get automatic prompts about special offers, and keep track of loyalty programs such as airmile accounts, Yankowski said.

The demonstration was the highlight of a speech in which the Palm chief urged consumer electronics manufacturers to focus on relevance, simplicity and ease of use when designing digital products for consumers-the three qualities that he said have led to Palm's success.

He took several jabs at both the PC and competing handheld computers based on Microsoft's Pocket PC platform, both of which he criticized for being too complicated and laden with features to be popular. While Palm commands an impressive 75% of the handheld computer market by some analysts' reckoning, Microsoft's Pocket PC platform has made some gains since the release of Compaq's popular iPaq device in April last year.

"In the race for MIPS, bits and faster processor speeds, Moore's Law and bloatware prevailed ... and we evaded the real question of, Does it make our lives easier?" Yankowski said.

Yankowski also announced that Palm has added another name to its fast-growing list of manufacturing licensees. Garmin, which makes GPS devices, will use Palm's software in a handheld computer that will be able to pinpoint a user's location as well as run other applications available for the Palm. The first product from Garmin is due early in 2002, Yankowski said.

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