t's the classic story of Jack and the Beanstalk: Determined boy plants magic beans, climbs beanstalk and challenges giant. Except this is not a fairy tale. The determined boy is Radiant Telecom, Inc., the magic beans are prepaid wireless products and the giant is a monster telecommunications company or two.

Radiant Telecom, Inc., a subsidiary of Radiant Holdings, Inc., founded in 1998, is a provider and distributor of point-of-sale technology, especially prepaid and point-of-sale activated long-distance, wireless and bankcard products and their support services.

However, unlike phone card brokers who resell minutes and contract for switching time, Radiant is a full-service telecommunications company that owns and operates its own switches and has developed its own POS software, minimizing network and access costs while ensuring quality and value for its customers.

Four-year-old Radiant has 300 employees and brought in $272 million in sales in 2001. The company is hustling to surpass giant telecoms. "We believe that a lot of the older giants are in trouble," said Apurve Mehra, Vice President of Strategy for Radiant. "What are they going to do? They've got billions sunk into networks that are inefficient and obsolete. It's cheaper for them to tell us to carry traffic for them than it is for them to carry it themselves." Radiant offers stored-value cards for long-distance calling, credit and debit, bank accounts, ATM usage, wireless telecommunication and Internet and dial-tone service.

Mehra says prepaid wireless is one of the fastest-growing segments of the telecom industry - already a $6 billion industry growing at 30% a year. "Right now in Europe, 90% of new cell phone accounts are prepaid. In America, it's way behind - only about 10-15% of cell phone accounts are prepaid," he said.

However, prepaid cards are selling fast in convenience stores and grocery stores. "Convenience and grocery stores are just going crazy about the repeat business generated by the consumers' constant need for airtime," Mehra said.

Consumers like the program because there is no contract or credit check required for gaining access to a wireless network - a lot of people get denied accounts in the credit check.

"There is a very strong underlying factor as to why prepaid will be the future of telecommunications," said Mehra. "Think about this: The problem with post-paid is that the carrier carries the risk of the consumer not paying. The credit risk automatically gets factored into the price. No matter what happens with technology, people will still not pay their bills. But in prepaid you eliminate that risk.

"With prepaid wireless, remember this: In 2007, you probably will have a prepaid account. I definitely will have one, and most of the people around you will have one. Right now we mostly have post-paid accounts, but by then we'll all have prepaid."

As part of its stored-value solution, Radiant offers a POS program for prepaid wireless and long distance cards. Cards are activated or recharged at the point-of-sale for any dollar amount more than three dollars, and retailers, agents and customers all can benefit from using this type of program.

For instance, retailers participating in the program are provided with an unlimited supply of cards without having to pay inventory costs upfront. Inventory is replenished automatically as cards run low, and the merchant remits no payment to the agent or card company. Payment settlement is completed daily by ACH bank drafts directly from the retailer. Since the cards have no value until activated, there is no risk from theft.

"The problem with [regular] prepaid wireless is that it's an expensive product," said Mehra. "One card costs 50 bucks, let's say, and that's a Cingular card, so you buy 10 Cingular cards and that's $500. The same thing goes with VoiceStream, the same thing with AT&T, etc. By the time you are done carrying inventory from every single provider, you're looking at a $10,000 investment right there. And guess what? If someone comes in and steals it, you're out of it. You can't do anything about it."

ISOs like the POS program because there are no advance payments required for inventory, no collections to make and no remittances to provide to carriers. Radiant replenishes inventory through the mail, so once a merchant is signed up, an ISO won't have to keep coming back. ISOs also don't have to wait for monthly commission statements or to see how their accounts are doing. They have access to full reporting capabilities so they can track their accounts daily, even hourly.

All of the reporting for Radiant's POS program is done in real time on the Web. If a merchant wants to see how much has been sold, the merchant can view reports in detail down to the clerk level from the terminal. If the ISO wants to see how each of its stores is doing, the ISO can log on to Radiant's Web site.

Most important, the program gives ISOs a unique product to sell to merchants. "Credit card machines were always a necessary evil to a retailer - they lose money each time they do a transaction," said Mehra. "Our program, which works on any credit card device - Lipman, VeriFone, any of them - will change that little device into the biggest money-making thing in the whole store."

Terminals already in place at a merchant location can be reprogrammed to connect to Radiant. Or, if the location is right, Radiant will provide a free terminal.

"It's got to be the right kind of location, not a doctor's office or a bridal shop or something like that, but a convenience store or a grocery store - a place that has a high propensity to sell my products," said Mehra. "[ISOs] can put in a whole new terminal and forget about it. It's already pre-programmed."

Mehra also pointed out that Radiant's system is compatible with STAR networks.

"Any terminal that's connected to STAR debit networks can load a card for us ... so you don't even need to run a new program, you don't even need to put in a new terminal," he said. "If you have a terminal that's running debit, you can load a phone or wireless card out of it. The program looks like a win-win for ISOs and their clients.

"ISOs love it because their margins in the industry have gotten beaten to the ground. Instead of going and finding a new merchant and haggling with them over 1.54 or 1.55, you go there to your existing merchants whom you already have a relationship with and just program an empty key. And guess what? That same location that made you 20 bucks a month will now make you 100 bucks a month.

"And I'm not kidding about this - I've dealt with some ISOs before that stopped selling credit card processing altogether."

A smart solution, a hardworking team and lots of ambition might be just the recipe for success. "We work insane hours," Mehra added. "We have people who sleep here practically - they go home for four hours every night. We believe we are the next thing. We've just got a better system [than the big guys]. They have a legacy system. We have the future system."