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HELP!!!! JAVA CARD BASED PRE-PAID SYSTEM

We are trying to develop a pre-paid smart card solution in a
developing country. This would be first such project here. No online
payment gateways exist here and less than 1% of the pouplation have
credit cards.

We have a pre-paid web based application which is up and running based
on postal payments by cheque. The MVC model has been used to develop
this application by using JSP, Servlets, Beans and MySQL - which is
running fine.

We want people to be able to re-charge their smart cards at retail
outlets. Initially about 50 outlets, card readers will be provided by
us. Customers would go to an outlet and re-charge their card by paying
cash to the attendant.

The attendand would then run the card through a reader/swipe machine
and use a keypad to enter the amount to be credited to the customer's
account balance.

The card reader would then connect to my backend application via modem
and PSTN and "tell" my server application to update the particular
customer's account balance, kept in the mySQL database.

Now, I want to know how a reader actually connects and interacts with
my J2EE based remote application. Do readers have their own embedded
OS and APIs which can be programmed? I Just need a high level
overview. Any recommendations on specific hardware will be greatly
appreciated.

I am not clear on the reader <--> remote application communication.
And I don't want to give away a pc to each reatil outlet. I want the
reader to handle the communication with my remote application via
PSTN.

I would be very greatful if you guys could help me out with this.