TNS Beefs Up Wireless Networking with Its Synapse Deal

TNS Inc. has acquired the primary asset of U.S. Wireless Data Inc., which in March filed for bankruptcy protection. Reston, Va.-based TNS, formerly Transaction Network Services, says its acquisition of New York-based U.S. Wireless Data's Synapse point-of-sale processing system strengthens the company's efforts to build its business in emerging transaction markets where wireless networking is critical, most particularly fast food restaurants. Synapse was developed to route transactions to card processors from such markets as taxis, mobile concessions, and outdoor markets. TNS says the acquisition, for which a price is expected to be announced in coming days, augments its existing wireless technology and is the first of several acquisitions the company is planning to make to help meet market demand for data-networking in various electronic payment niches. The quick-service niche in particular is one that many processors and card companies have identified as having high-growth potential. TNS in a statement on the acquisition of Synapse estimated the segment accounts for 11 billion transactions annually. “QSR is a real good target,” says Michael J. Murphy, vice president of marketing for TNS. Drive-through lanes, he says, can especially benefit from wireless data transmission, since the technology eliminates the need to string wires outside the store to support cashless transactions. U.S. Wireless had claimed Synapse also generally speeds up transaction times to as little as two seconds. “U.S. Wireless brings quite a wealth of technology,” says Murphy. U.S. Wireless Data, a 13-year-old payment gateway specializing in wireless and vending-machine transactions, announced in March it had filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code (Digital Transactions News, March 27). The company also announced it was selling “substantially all” of its assets. It had reached an agreement with NBS Technologies Inc. under which the latter company would buy the Synapse platform for $2.85 million in cash plus a processing credit of up to $2.15 million for U.S. Wireless's vending business. Other companies, however, were allowed to bid on the U.S. Wireless businesses under a process supervised by the bankruptcy court. The company's bankruptcy petition was filed with the U.S. bankruptcy court for the Southern District of New York. NBS said two weeks ago it was withdrawing from the bidding for Synapse, having concluded, it said, that the transaction “could not be completed at a reasonable rate of return for our shareholders.” TNS provides data-transport services to transaction processors and gateways. Founded in 1990, it became a public company in March.