First Inflight Credit Card Authorization System Planned

A new company, Inflight ATI, has been formed to develop the world’s first inflight credit/debit card authorization system. Its technology will allow airlines to avoid the bad debts that result from their inability to verify inflight card transactions.

Michael Furber, a spokesperson for the company, said that with a $3 billion a year turnover, the problem of "bad" card transactions in the air is a major one, with bad debts approaching 5 percent on average.

"The system under development is all digital, and will work across many different air-to-ground systems," he said, adding that airlines are crying out for the technology to allow them to check card transactions.

"If you think about it, being inflight is just about the only situation you may find yourself in where the merchant is unable to check your card for its validity. The Inflight ATI system will solve this problem," he said.

Plans call for the firm to raise around $12 million by an initial public offering (IPO) this summer, and the company will be listed on the Luxembourg Stock Exchange from this month onwards..

One of the reasons that duty-free sales are restricted in value terms, Furber said, is inability of airlines to verify card transactions. "You aren’t able to buy a Rolex watch in the air, for example, since, at the moment, the airline can’t verify the transaction without making a $15 airphone call. The Inflight ATI technology will change this."

Inflight ATI plans to use software licensed from Airtel ATN, the Irish aeronautical communications software firm, to develop an end-to-end communication and financial transaction system. This will include a wireless digital radio link from the duty free sales trolley to a satellite communications channel between the aircraft and a ground-based data communications system.

This, in turn, will link into a ground-based server to connect with traditional financial transaction processing.

The firm says that a dedicated communications system will not only eliminate the risk of non-validated card sales, which are subject to a higher discount rate from the processing merchant bank, but it will also enable airlines to offer higher value merchandise, adding to their revenue and profits.

Cathay Pacific Airlines has agreed to flight-test the satellite credit/charge card validation system from its aircraft. Upon the successful completion of those trials, the agreement provides for the operation of the Inflight ATI system commercially throughout the airline’s long-haul fleet.

In the longer term, Inflight ATI plans to develop a mini ATM (automated teller machine) for installation on long haul aircraft. This will allow passengers to obtain cash on board the aircraft using credit or debit cards. On international routes both departure and destination currencies would be available.

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Intershop, the electronic commerce software developer, has developed a mobile phone e-commerce system in cooperation with Danet Firmengruppe, a German telecommunications software firm. MCommerce is the new phrase to describe the e-commerce system using mobile phones.

The Intershop/Danet system allows mobile phone users in Germany to order cinema tickets, pay bills, and get limited Internet access through a microbrowser on their handset.

Intershop says that suitably equipped mobile multimedia (MMM) handsets are already being manufactured by companies such as Nokia, Alcatel, and Siemens. Similar m-commerce services are being tested in other European countries such as Finland and France.

John Griffith, Intershop’s UK managing director, said that the Internet will have to go mobile to develop. "The enabling technology and software for m-commerce already exists and, for the first time, we’ll be able to see how it’s adopted by a European mass market."

Danet’s Web site is at http://www.danet.de.

Intershop’s Web site is at http://www.intershop.co.uk.

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