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EDS aims wireless banking at Palm devices

The consulting and computer systems integration company jumps into the wireless world with services geared for financial institutions over the Palm VII handheld device.

    Electronic Data Systems, one of the largest consulting and computer systems integration companies, jumped into the wireless world today with banking services geared for financial institutions over the Palm VII handheld device.

    EDS joins a growing list of firms, including w-Trade and Consolidated Data, offering products to help financial services companies connect customers to their accounts via wireless devices.

    Online brokerages and banks are beginning to offer services over cellular phones, pagers made by Research in Motion (RIM), and other handheld computer devices. EDS' service will be tailored for people using the Palm VII.

    While wireless Internet banking and trading are still far from reaching critical mass, most analysts consider wireless services a necessity for financial institutions--at least as a placeholder until consumers begin to warm to the concept.

    EDS is focusing on wireless Palm devices because of the prevalence of the platform, said a spokeswoman. The company said it is leaving the door open for access over Web-enabled cellular phones, which are expected to flood the market in the near future. EDS does not have a launch date for the service over wireless Web-enabled phones, it said.

    The projected figures for wireless phone subscribers underscores the importance of having such services in place.

    There were 220 million digital wireless phone subscribers worldwide in 1998 and 150 million Internet users, a Yankee Group study estimates. In about four years, there will be more than half a billion Internet accounts and roughly 1 billion digital wireless phone subscriptions. Internet-enabled "smart phones" are expected to have 48 million users worldwide by 2002 and 204 million by 2005, the research firm reported.

    EDS' focus on Palm devices could cause problems down the road as other wireless devices become more popular. While Palm currently enjoys 70 percent market share for handhelds, that figure includes the widespread use of its non-wireless devices, and rivals such as Microsoft are aiming to put a dent in the company's lead. Palm plans to dive deeper into wireless devices.

    The competition to control the gateway to a wireless world also heated up last week after RIM announced its first wireless personal digital assistant (PDA).

    EDS said its services will allow banks, credit unions and other financial institutions to offer their customers the ability to access and maintain their accounts, as well as pay bills, via wireless devices.

    The technology is based on an Internet architecture that allows for the expansion of Web applications to wireless devices, the company said. Secure and encrypted transactions are used to protect the data being transmitted, and most banking and payment functions that are available through the Internet are available on a Palm VII handheld using EDS' wireless banking products and the Palm.net service.