A Silicon Valley start-up has unveiled technology to enable users of devices such as Palmpilots to make credit card payments.
Confinity's Paypal software can be downloaded free from the Internet and is expected to be generally available this autumn. Users simply install it on their Palmpilots, type the amount they want to pay a third party into their device, tap a "pay" button, and point their device at the recipient's Palmpilot.
The information is sent by an infrared beam in a similar fashion to remote controls sending messages to a television. Recipients synchronise their devices through a PC, and can instruct Paypal to either deposit the money directly into their existing bank account, send them a check, or keep it in an account so they can pay someone else next time.
Financial transactions are encrypted using public key cryptography for security and the service will be available worldwide pending approval of Confinity's US export license. The software will also work with cellular phones and two way pagers in future.
Peter Thiel, Confinity's chief executive, said: "PayPal will change the way people think about money."
He expects most users to be between 20-35 years of age and to transfer only small amounts, but he hopes to see about 100,000 users by the end of the company's first year of trading.
Thiel, a Stanford graduate and former securities lawyer, worked as a high tech investor before launching his 12 employee company last year.
Nokia Ventures, the venture capital arm of Nokia, is Confinity's lead investor, and has contributed $3 million of the firm's $4.5 million first round of financing. Europe's largest financial institution, Deutsche Bank, is also backing the company.
IDC predicts that the sale of cell phones, handhelds and other information appliances will outnumber PCs by 2002, while Rob Sterling, an analyst with Jupiter Communications, thinks many of the four million Palm organiser users' will run Paypal on their devices.
"You're basically enabling the person to transmit money and I think there's a niche for that," he said.
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