magine a device that clips almost effortlessly onto a cell phone and instantly converts it into a POS terminal. Now imagine it being secure at the read. Got your attention yet?

"When other companies talk security, they refer to transmission between the wireless network and the gateway," says Georges F. Elias, CEO of Creditel. "We go one step further. We do it at the read. Before the information ever goes into the phone, it gets secured against fraudulent use (such as identity theft). One of our strengths is secure transmission at the read, and no one else is doing it."

In August 2000, four entrepreneurs joined forces in Los Angeles. They posed the idea that a merchant could do a full swipe transaction with a cell phone. They recognized it had to be secure to be successful and spent the last two years perfecting and patenting a secure, at-the-read environment for merchants and consumers. The result: products that provide immediate encryption.

Creditel's PowerSwipe is a small, lightweight card-reading device that affixes to a merchant's mobile phone and instantly adds credit card terminal capabilities. Combined with the Creditel PowerPay application in the mobile phone, it acknowledges transactions in six to eight seconds, incorporating a magnetic stripe reader, infrared data/printing port and a pass-through connector for charging the cell phone battery.

Currently operating on the Nextel network, PowerSwipe soon will be operable on any of the major national wireless networks, according to company officials. It's all about partnerships.

"We really didn't have backgrounds in payments," says Elias. "That's a blade that cuts both ways. We didn't have baggage from the business, but we didn't have the experience. The technology was there, but we needed to develop partnerships with processors and service providers. We had a good business strategy and solid technology. What we needed was industry expertise."

Creditel got just that in May 2001 when it hired Gary Walker to be Vice President of Sales and Marketing. Walker has 30 years of payment-processing experience with such organizations as VeriFone, Vital Processing, Trintech and Bank of America.

"When we first started looking at target markets, we focused on the small to midsize merchants, the market that really doesn't have an option," says Elias. "They had solutions that weren't secure and were expensive. Our product is very affordable, very competitive. It's ideal for merchants who have had a hard time achieving this level of wireless access in the standard channel."

Creditel has just launched its suite of products, having field-tested it across the country since the summer with positive results. One community in particular that appears excited about Creditel is the ISO channel.

"ISOs are essential," says Elias. "This whole business is based on relationships. Now we can marry the strength of those relationships with cutting-edge and leading technology that's well tested and proven. It is the best of both worlds."

Creditel will offer its products at competitive wholesale prices to resellers. Creditel sees this as a two-fold strategy - allowing ISOs to make their margins with their end users while allowing merchants a cost-effective entry into wireless transactions. Volume will be a price variable as well.

"We are very careful not to change the business," says Elias. "We do what people expect today. We don't want to drastically change what ISOs do. We are careful to seamlessly blend our system and do the same thing on the back end with processors as well."

Of special interest to back-end processors is the Mobile Transaction System (MTS), Creditel's unique gateway that incorporates the convergence and seamless integration of familiar and widely accepted technologies and the back-end systems that support them.

The 2000 Census reported there are more than 40 million mobile workers in the U.S., most of whom require some sort of financial-transaction or information-exchange capability. To address that market, Creditel introduced MTS in conjunction with wireless carriers, transaction processors and financial institutions so mobile workers such as salespeople, service personnel, taxi/limo drivers and couriers can conduct secure transactions at the point-of-sale.

In addition to seamless integration and legacy support, another benefit Creditel promises is ease of deployment and implementation of its products. Depending on the boarding process, turnaround time can be three to five days.

"Activation is the shortest pole in the tent," says Elias. "Based on signup and approval, basic application to activation can be done in a matter of days. And if there's ever any problem with the device, we will exchange out immediately. You won't have to wait for repair."

A number of companies already are taking advantage of Creditel's offerings. For instance, U.S. Wireless Data established an agreement with Creditel, and uses its Synapse service to provide Creditel's payment gateway services and also will provide for distribution of the Creditel products and services in the ISO/acquirer channel.

"The ability to process transactions through mobile phones is a tremendous opportunity for U.S. Wireless Data," said Chairman and CEO Dean Leavitt. "PowerSwipe is especially well-suited to mobile businesses where payment options have been limited in the past. This solution provides a multipurpose payment device, secure transactions and the lowest transaction-processing costs."

First Data is another major player to embrace Creditel. Since First Data annually processes and settles more than 9 billion transactions for more than $490 billion in sales volume from 2.8 million merchant locations, this relationship could help put Creditel on the payment-processing map in a big way.

"Given the increasing need for secure transmission of payment-related information, Creditel's ability to encrypt payment transactions, as well as other sensitive information, will be ever more important," said Steven Van Fleet, Senior Vice President of Product Management for First Data Merchant Services, a subsidiary of First Data Corp.

Glendale, Calif.-based United Merchant Services is an ISO that recognizes the appeal of wireless and is accessing it through Creditel.

"We don't have a lot of field use yet with Creditel, but we are excited in that we service a lot of merchants in the mobile industry," says Bruce Ferguson, Senior Vice President of Business Development for United Merchant Services. "The biggest objection to overcome is high cost of equipment and even more than that, a key factor is accessibility to service.

"With Motient and other forms of wireless, they are all dependent upon data network towers. We're excited with Creditel in that it offers solutions on a voice line and offers a universally acceptable availability. That was the biggest thing, the appeal of the product. They've taken a business phone like a Nextel with mobile-to-mobile accessibility, added on an attachment, and you've got a POS terminal. It is bleeding-edge technology."

Ferguson also likes the design of Creditel products.

"I have seen others, and they have Velcro attaching the swiper," he said. "Creditel's device looks like it was made professionally. It looks like a product designed with attention not just to functionality but also structure and form. When you are reselling to merchants, you want something that not only delivers what it is supposed to deliver but looks professional. Then there is always the personal aspect. I like the people they're involved with. We already work with a lot of them, like U.S. Wireless Data."

Other partnerships that have added to Creditel's credibility include Motorola, SafeNet, BankServ, InPhonic and Chase Merchant Services. The common denominator throughout these strategic alliances is support.

"When we consider a partner, we look for their ability to support the type of service level we want to offer. That's number one," says Elias. "They don't have to be the leader. A lot of so-called leaders are there because they were first. We want leaders with vision who continually service the customer base. By allying with them, we have the ability to generate product to their customers. We can help them accelerate programs to market. ... Creditel is not only the best partner, it is the natural partner."

Elias says Creditel looks for "the same characteristics in our ISO partners. We look for good relationships with their customers and the desire to increase their level of customer service. Our product is a service, something by which they can hold on to their customers and help generate revenue. The opportunity is too great for any ISO to ignore. The market for wireless POS is vast. At our price point, we allow them to leverage into those channels - especially the smaller ISOs who want to grow. [They] can grow quickly."

Hand in hand with that vast market is the obvious obstacle facing Creditel: keeping the wireless shelves stocked with merchandise.

"It sounds coy, but meeting the demand is our biggest challenge," says Elias. "When presented with this opportunity, the merchant's immediate reaction is, 'Why aren't we doing it today?' That is the key, to possess the ability to maintain proper supply and support as well as deploy quickly. Our infrastructure is definitely in place to satisfy the demand."

A secondary concern of Elias is communication - specifically, communicating the basic premise that what people are doing today might not be secure.

"It's all about education," says Elias. "We start with our support, and through our team we go out to our distribution channel and talk to people about what exists today and that we offer something different. Security is what rings to their core. Wireless rings that bell.

"A skimmer has the ability to store info from a terminal and broadcast to multiple Web sites or to a gateway. That is a big fear. Our product can destroy that fear. Even before transmission, if someone gains the ability to skim that call, we have that data encrypted. No one can break it. That goes to our partner SafeNet's strength in the market and our technology."

Elias says getting the word out there comes down to straight talk and less hype.

"This industry runs so hot and cold," he says. "Services always seem to be based on price. Getting over that hurdle may take education, but it's also going to take service providers giving more service to their clients and weaving that into the basic fabric of their merchants. We can help them weave a stronger business with the flexibility of our offering. We can provide the ISOs with an invaluable strategy in their competitive marketplace."

Elias describes the future of the marketplace in one word: wireless.

"You are going to find more and more dedicated-phone-line POS terminals turning toward wireless," says Elias. "As merchants need to become more flexible to address the consumer market, they'll have to relay out their stores and put staff in parking lots. It becomes harder to do that with landlines. It's all about the ability to take the POS functionality to the true point-of-sale. That means going to the consumer as opposed to having the consumer come to you. It is a fantastic way to enhance revenue."

Creditel envisions enhancing the revenue of not just merchants but the ISO community, too. "I want ISOs to think of customer service and think of themselves as a partner to the merchant, helping them grow their business," Elias says. "If they start with that thought, they will see that Creditel provides unmatched services in terms of flexibility and generating new revenue streams. That will help ISOs get where they want to go."

Where does Creditel want to go? To the head of the wireless line.

"I see us as the wireless POS leader in this market, not only because of point-of-sale technology but also the enhanced business we can offer merchants," Elias says. "The ability to capture information and secure it at the read is essential. That is the core of our model. We aren't capturing credit card info, we are capturing identification info. Because of that, I see ourselves surpassing our goals."