Bluetooth Cuts Its Retail Teeth
Deborah Méndez-Wilson
January 19, 2001
Imagine walking into a New York hotel and using a mobile phone to check in, open your room door, pay for dinner, call your boss and pay for that souvenir Yankees dugout jacket you spotted in the gift shop.
At the Holiday Inn Wall Street in New York City, that scenario will become reality with the February debut of what is being billed as the world's first full-service Bluetooth hotel. Guests will be able to wirelessly check in and out, make payments at in-house restaurants, secure access to their rooms and pick up phone messages, among other tasks.
The system, enabled by Registry Magic Inc., turns wireless phones into handy identity tools and 'the most secure credit card available,' says John Falcone, the provider's senior vice president of technology and business development.
Registry Magic and other developers are rushing to use Bluetooth wireless technology in the retail world, expanding the definition of mobile commerce.
M-commerce usually refers to the use of Internet-ready handhelds to conduct online commerce or to locate brick-and-mortar stores, restaurants and other locales. With Bluetooth technology, real-world cash registers will be able to communicate with shoppers' wireless phones at the point of sale. Since the next generation of mobile phones is expected to include Bluetooth chips, Registry Magic and other developers stand to reap considerable advantages by having retail strategies in place.
According to Allied Business Intelligence Inc., annual shipments of Bluetooth-enabled devices are projected to reach over 1.4 billion nodes in 2005, up from just 56 million nodes in 2001.
In fact, Bluetooth is expected to provide a plethora of opportunities for chipmakers, handset manufacturers, wireless carriers and application developers. In the ABI study 'Bluetooth: More Than a Cable Replacement,' analyst Navin Sabharwal states there are a few lingering concerns about Bluetooth–primarily security and interoperability–but they do not 'dull the tangible cross-industry enthusiasm for an inexpensive, low-power wireless connectivity solution.'
Such concerns haven't dampened the enthusiasm of Falcone and others who believe the technology will enable a better retail system around the world. 'In essence, your cell phone replaces your wallet,' Falcone says.
To enable its newly conceived Bluetooth Consumer Payment Network, Registry Magic plans to join forces with handset manufacturers such as Ericsson, Nokia and Motorola, wireless carriers and credit card companies to stir consumer interest. The plan rests on Registry Magic's patented biometric access security system authentication and authorization services and a snap-on wireless adapter module.
The module snaps onto the back of a current-generation cash register, instantly turning it into a Bluetooth-enabled wireless device. Falcone says the benefits to stores that incorporate the module is that they don't have to handle millions of credit cards, and the system turns their cash registers into an instant wireless network, enabling them to move the machines around the store at will.
As for consumers, they don't have to carry around dozens of credit cards, and it's more secure than handing your credit card over to a stranger every time you go to a restaurant or store, he says.
Consumers never have to hand over their phone to anyone to complete the process. Falcone says they only have to indicate to the cashier that they want to use their phone to pay for a purchase. The cashier rings up the total, and the consumer's phone beeps with a message to enter a PIN code and speak a previously recorded code word or 'voice print.' The user's photo also pops up on the cash register screen as an added layer of security. Then the phone offers a menu of billing choices. The consumer makes a selection and the transaction is complete.
Falcone says the system is foolproof because thieves cannot use a phone even if they do manage to steal it. The system has several security layers that prevent that, including the PIN number, the 'voice print,' the phone ID number and a user's photo.
Once retailers realize what they can do with Bluetooth, they'll be sold on the technology, he says.
Other developers seem to agree. Recently, Ericsson, an original Bluetooth developer, and ICA Ahold, a leading Nordic retail group, conducted a series of in-store trials with the technology. Customers at a store outside Stockholm used Wireless Application Protocol and Bluetooth-enabled phones to pay for goods, to check accounts and to find out about sales. Ericsson officials claim the payment method proved faster and easier than credit cards or cash.
As a retail tool, Bluetooth now joins Jalda, a highly secure, multipurpose payment system, which enables many Internet commerce applications. Jalda, originally developed by Ericsson, is owned and is being further developed by EHPT, a joint venture between the Scandinavian manufacturer and Hewlett-Packard Co. The technology supports both fixed and mobile e-commerce.
Some investors seem sold on wireless retail. Aspects Software of Edinburgh, Scotland, recently acquired $18 million in financing to develop ultra-secure smart cards for mobile phones, designed to replace credit cards. The cards will enable users to prepay for credits via their wireless accounts and make debit or credit transactions over the Internet.
As these developers and others prepare for the world of wireless retailing, credit card companies aren't likely to be left out of the loop.
And that means consumers will be able to choose their retail tool when paying for that Yankees jacket.
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