LONG BEACH - Imagine a Japanese businessman walking into a Long Island hotel, pulling out his credit card and paying for his room - in yen.

This vision is what's motivated a handful of financial services companies, including Long Beach-based Planet Payment, to develop point-of-sale currency conversions.

They've figured out a way to grab a share of the hefty conversion fees traditionally collected by credit card companies and card-issuing banks.

Under their system, the hypothetical Japanese businessman's hotel room rate - in dollars - would be converted into Japanese yen at the time of the transaction. He would be able to see the amount he'd paid - in yen - on his receipt, instead of waiting more than a month for his credit card statement.

Planet Payment now markets its service throughout the travel and entertainment industry. Tom DeLuca, senior vice president at the company, said point-of-sale currency conversions could mean big business for Long Island's travel and entertainment industry.

Company officials were reluctant to disclose their clients, but companies such as Avis Rent A Car System Inc., Royal Caribbean International and Budget Rent A Car System Inc. all offer point-of-sale currency conversion.

Chase Merchant Services, a Planet Payment competitor, operates the conversion service for Avis. A source close to CMS, a joint venture between J.P. Morgan Chase and First Data Merchant Services, estimated that Avis reaps about $1 million to $1.5 million a year from its percentage on currency conversions.

Planet Payment has its roots in a Manhattan international law firm started in 1987 by two British expatriates, Philip Beck and Graham Arad.

As Internet popularity exploded in the mid-`90s, the firm began to focus on the problems of international e-commerce. "The biggest problem with these online businesses is that they couldn't always get paid," said DeLuca, a lawyer who left American Express in 1998 to join the company.

Planet Payment was created in 1999 to deal with the payment problem. That year it rolled out a multi-currency payment service for e-commerce businesses.

Beck and Arad took on the roles of CEO and general counsel, respectively, and the business built a worldwide staff of 160, working with more than 1,000 companies.

But when the dot-com industry collapsed, Planet Payment scaled back dramatically, refocusing its attention on currency conversions in the physical world.

In late 2001, Planet Payment moved from Manhattan to a 3,000-square-foot facility in Long Beach, while maintaining offices in Singapore and the United Kingdom.

Beck said the company plans to "double or triple" the size of its Long Beach office later this year and add "at least another 10 people" to its Long Island staff of 15.

The company is now in a race with a few competitors to sign up merchant partners.

Credit card companies and card-issuing banks have been collecting large fees for foreign currency conversions - sometimes as much as 5 percent. Planet Payment effectively redirects that surcharge so that it is split between Planet Payment, the merchant and the bank that handles the transaction (known as the acquiring bank).

"While a hotel might typically earn 10 percent of the cost of a room, if they're using Planet Payment they could make as much as an extra 1 percent," DeLuca said.

While 1 percent of a transaction's value might not mean much to a small business, he said, big businesses throughout the travel industry are starting to reap large rewards from point-of-sale currency conversions.

David Robertson, publisher of the Nilson Report, a trade publication for the credit card industry, said that last year Visa and Mastercard generated more than $930 million in revenue from foreign currency exchange, while card issuer mark-ups raised fees another $2.3 billion.

Within the next five years, merchants, currency conversion suppliers, and acquiring banks could capture at least half of that total, he added.

Due to differences in the credit card systems, only Visa and Mastercard - those credit cards that are issued by banks - will be affected by point-of-sale currency conversion.