The involvement of European Eftpos operator Ingenico in the Palm payments effort was unveiled at the annual Consumer Electronics Show in Las Vegas. Here, Palm CEO Carl Yankowski conducted a live demonstration of the technology as part of a keynote address which held out a vision of the mobile device as the consumer's indispensible friend, combining personalised information with up-to-the-second financial and transactional data.

In addition to replacing the standard payment-card swipe at retail outlets, Palm believes that over time users will store financial records and loyalty programmes alongside driver's license, health-care information and other personal identification documents all on the one pocket-sized device - or eWallet.

"Once a significant number of businesses adopt this IR technology, we believe consumers will grow comfortable discarding their bulky, disorganised wallets for a digital alternative that provides real two-way service," says Yankowski.

At CES, the Palm CEo used his own handheld to buy a car cellphone system with Hear It Again Memory, an atomic watch, and a Sony AIBO from among the products at a Sharper Image storefront on stage. After choosing his purchases and agreeing to the price plus tax, Yankowski pointed his Palm toward the point-of-sale Ingenico terminal and activated the eWallet by pushing a short-cut button. He then selected his payment method - a Visa card embedded in the Palm eWallet application - and entered a PIN to initiate payment transfer.

The Ingenico terminal received Yankowski's beam as an encrypted message, and automatically forwarded the information about the total purchase price and Yankowski's payment-card account number to the Sharper Image merchant account. Yankowski received a hardcopy receipt as well as a digital one.

Kevin Burden, senior analyst, smart handheld devices at IDC, describes the move into payments as "a natural extension" to the feature set of Palm handhelds.

Palm is working with VeriFone, Ingenico and Visa to build the infrastructure for a mass market roll out of the technology. The necessary IR receiver can be added to standard, currently installed point-of-sale terminals supplied by both Ingenico and VeriFone. In the future, this communication link could be provided using Bluetooth technology, say the partners. With Visa, Palm is working to develop features such as easy-to-use statements that can be viewed on a handheld.

News of Ingenico's involvement comes after Palm and VeriFone first trailed the technology in early November last year. VeriFone says it will have the first palm-ready terminals available for implementation in the US by the end of this quarter. Ingenico currently supplies over 100,000 retailer terminals in the UK via agreements with leading banks including Barclays, HSBC, Royal Bank of Scotland, Bank of Scotland and Girobank among others.