First Data, an e-commerce vendor has development of PocketMerchant, a wireless solution that allows merchants to use a mobile phone or Palm OS handheld as a point-of-sale terminal for accepting electronic payments.

PocketMerchant was developed with Aether Systems, a provider of wireless and mobile data solutions. Aether Systems also will act as a host for PocketMerchant. The companies said Independent Sale Organizations (ISOs) will soon be able to offer processing services to merchants that previously may not have accepted credit cards or processed only off-line sales.

Once available, the companies said PocketMerchant will be offered to key target markets including delivery/trucking, entertainment, food delivery, and other merchants that offer goods and services on the move. "It's clear that some merchants cannot cost-justify the investment in a traditional wireless point-of-sale terminal. A typical merchant needs to process significant bankcard volume to reach a break-even point on the investment in a traditional wireless POS terminal," said Steven L. VanFleet, senior vice president of product development for First Data Merchant Services. "With the development of PocketMerchant, First Data will provide a low-cost solution to these merchants."