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Palm, VeriFone team up on wireless payment

The handheld maker and the HP unit will develop wireless payment technology for personal digital assistants, with an eye toward tapping into a growing market.

Palm and Hewlett-Packard's VeriFone division said Thursday they will develop wireless payment technology for handheld computers, with an eye toward tapping into the growing wireless commerce market.

In the short term, the two companies intend to work together to create the secure transfer, via infrared technology, of financial and payment information from a Palm handheld to a VeriFone point of sale (POS) payment terminal and then into the networks of existing financial institutions, the companies said in a joint statement.

In addition, Santa Clara, Calif.-based Palm and Palo Alto, Calif.-based VeriFone will enable Palm handheld computers to access third-party content through a VeriFone payment system. VeriFone machines running the Palm mobile payment application will also have the infrared capability to make the POS system a Palm sync point, through which users can upload content to, and download it from, their handheld device.

Kevin Burden, an analyst at market researcher IDC, sees Palm moving in the right direction.

"The root for all mobile devices is giving users what they want, when they want it," he said. "This move illustrates the move to make e-commerce an habitual part of everyone's lives."

The market for mobile Net access is expected to grow quickly in coming years, as millions of consumers buy handheld computers. Wireless carriers are eager to offer Net access to people with mobile phones and other handheld devices because of the higher profit margins related to content services and e-commerce transactions. So far, however, consumer adoption of mobile Net services has been mostly moderate in the United States.

Both companies are betting on consumers adopting mobile electronic transaction methods in place of the standard credit card swipe.

"Imagine the time savings and simplification of receipt management and expense tracking when an electronic purchase confirmation gets loaded directly into your handheld while the merchant puts your purchases into bags," Doug Solomon, Palm's chief strategy officer, said in a statement.

Working with VeriFone, Palm also expects to offer physical and online merchants a new way to entice customers with access to content through Internet-enabled VeriFone POS terminals, Solomon added.

The deal comes on the same day that Palm launches a new advertising campaign showcasing the software applications--such as golf, weather and mapping programs--that can run on handheld computers using the Palm operating system.

VeriFone makes terminals and software that authorize purchases such as credit card transactions.