SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC  20549
                                  
                                  
                             FORM 10-QSB
                                  
_X_  Quarterly  Report  under  Section  13 or  Section  15(d) of the  Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1996

     ___ Transition Report under Section 13 or 15(d) of the Securities  Exchange
Act of 1934 for the transition period from ______ to ______.
                                  
                                  
     Commission File No.:  0-22848
                                  
                                  
                            U.S. Wireless Data, Inc.
             (Exact name of registrant as specified in its charter)
                                  
                                  
         Colorado                                        84-1178691
 ------------------------              -------------------------------
 (State of incorporation)                     (IRS Employer Identification No.)


                              5700 Flatiron Parkway
                             Boulder, Colorado 80301
                             -----------------------
                                  
          (Address of principal executive offices, including zip code)
                                  
                                  
                                  
                                 (303) 440-5464
                                 --------------
                                  
              (Registrant's Telephone Number, including area code)
                                  
                                  
                                  
Check whether the issuer (1)  filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file
such  reports), and (2) has been subject to such filing requirements
for the past ninety days.

                         Yes   _X_         No  ___


As  of September 30, 1995 there were outstanding 4,390,910 shares of
the Registrant's Common Stock (no par value per share).


Transitional Small Business Disclosure Format

                         Yes ___           No _X_
                                  
<PAGE>
       
                                  
                      U.S. WIRELESS DATA, INC.
                          TABLE OF CONTENTS
                                  
                                  
                                  
PART I         FINANCIAL INFORMATION

                                                                      Page
Item 1.   Financial Statements (Unaudited)

          Balance Sheet --
             September 30, 1996                                       3

          Statements of Operations --
             Three Months Ended September 30, 1996 and 1995           4

          Statements of Cash Flows --
             Three Months Ended September 30, 1996 and 1995           5

          Notes to Financial Statements                               6-7

Item 2.   Management's Discussion and Analysis                        8-9



PART II   OTHER INFORMATION

Item 1.   Material Developments in Connection with Legal Proceedings
10

Item 3.   Defaults Upon Senior Securities                             10

Item 5.   Other Information                                           11

Item 6.   Exhibits and Reports on Form 8-K                            11

<PAGE>
 
                                  
                                  
                                  
                      U.S. WIRELESS DATA, INC.
                            BALANCE SHEET
                             (Unaudited)
                                  
<TABLE>
<CAPTION>
                                  
                                                          September 30,
                                                              1996
                                                              ----
                        ASSETS                                    
<S>                                                    <C>                                                                  
Current Assets:
        Cash and cash equivalents ..................   $     14,408
        Accounts receivable, net of allowance for
            doubtful accounts of $23,080 ...........         81,179
        Sales-type lease receivables ...............         18,784
        Inventory, net .............................        521,566
        Other current assets
                                                                775
                                                                ---
                 Total current assets ..............        636,712

Property and equipment, net ........................         76,965
Other assets
                                                             10,295
                                                             ------


Total assets .......................................   $    723,972
                                                       ============


    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
        Accounts payable ...........................   $    381,487
        Accrued liabilities ........................        117,374
        Notes payable
                                                            398,666
                                                            -------
                Total current liabilities
                                                            897,527
                                                            -------


Stockholders' equity (deficit):
        Common stock, no par value, 12,000,000
                shares authorized, 4,665,877 shares
issued .............................................      4,583,108
                and outstanding, stated value $1.00
        Additional paid-in capital .................     11,501,690
        Accumulated deficit
                                                        (16,258,353)
                                                        ----------- 
                    Total stockholders' equity
(deficit) ..........................................       (173,555)
                                                           -------- 


Total liabilities and stockholders' equity (deficit)   $    723,972
                                                       ============

</TABLE>
                                  
                                  
                      U.S. WIRELESS DATA, INC.
                      STATEMENTS OF OPERATIONS
                             (Unaudited)
<TABLE>
<CAPTION>


                                                   Three Months Ended
                                                 9/30/96       09/30/95
                                                 --------    ----------
<S>                                          <C>            <C>
Revenue ..................................   $   387,218    $   282,135
Cost of goods sold .......................       265,449        250,960

Gross margin .............................       121,769         31,175

Operating Expenses
       Selling, general and administrative       171,157        415,812
       Research and development
                                                 118,469        127,097

                                                 289,626        542,909

Loss from operations .....................      (167,857)      (511,734)

Other income (expense)
                                                   5,967        (14,426)

Loss from continuing operations
                                                (161,890)      (526,160)

Loss from discontinued operation
                                                    --         (309,206)

Net loss .................................   $  (161,890)   $  (835,366)



Earnings (loss) per share:
       From continuing operations ........   $      (.03)   $      (.12)
       From discontinued operation .......          --             (.07)
       Net loss per share ................   $      (.03)   $      (.19)



Weighted average common shares outstanding     4,653,482      4,390,910

</TABLE>
                                  
                                  
                                  
                                  
                                  
                      U.S. WIRELESS DATA, INC.
                      STATEMENTS OF CASH FLOWS
                             (Unaudited)
                                  
<TABLE>
<CAPTION>
                                              
                                              Three Months Ended
                                               09/30/96    09/30/95
<S>                                          <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss ............................   $(161,890)  $ (526,160)
     Depreciation ........................      20,496       57,351
     Changes in assets and liabilities:
          (Increase) decrease in:
               Accounts receivable .......      95,948       97,707
               Inventory .................     (26,382)     205,553
               Other assets ..............      28,608        5,771
          Increase (decrease) in:
               Accounts payable ..........     139,100       16,283
               Accrued liabilities .......    (100,222)      87,655
               Notes payable
                                               (21,600)        --
                                               -------           
     Net cash used in operating activities     (25,942)     (55,840)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of equipment and furniture
                                             ---------    ---------
          Net cash provided by investing .        --           --
activities


CASH FLOWS FROM FINANCING ACTIVITIES:
     Net proceeds from issuance of stock
                                             ---------    ---------
          Net cash provided by financing
activities ...............................        --           --


INCREASE (DECREASE) IN CASH ..............     (25,942)     (55,840)


CASH, Beginning of period
                                                40,350      128,381
                                                ------      -------


CASH, End of period ......................   $  14,408    $  72,541
                                             =========    =========

</TABLE>
                                  
                                  
                      U.S. WIRELESS DATA, INC.
                    NOTES TO FINANCIAL STATEMENTS
                             (Unaudited)


Note 1 -- ACCOUNTING PRINCIPLES

     The balance sheet as of September  30, 1996,  as well as the  statements of
operations  and of cash flows for the three months ended  September 30, 1996 and
September 30, 1995,  have been prepared by the Company  without an audit. In the
opinion of management,  all  adjustments,  consisting  only of normal  recurring
adjustments  necessary  to present  fairly the  financial  position,  results of
operations  and cash flows at September  30, 1996 and for all periods  presented
have been made.
   
     Certain  information  and  footnote  disclosures  normally  included in the
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these financial
statements  be read in  conjunction  with the  financial  statements  and  notes
thereto included in the Company's Form 10-KSB for fiscal year end June 30, 1996.
The results of operations  for interim  periods  presented  are not  necessarily
indicative of the operating results for the full year.
   
   
   
Note 2 -- FINANCIAL CONDITION AND LIQUIDITY
   
     The Company  currently  has  significant  concerns  regarding its financial
condition  and  liquidity.  The Company has incurred an  accumulated  deficit of
approximately  $16.3 million since inception and has incurred  additional losses
subsequent  to the year ended June 30,  1996.  In order to  continue  as a going
concern,  the Company intends to: sustain or increase revenue levels and product
margins;  negotiate product development  contracts;  generate positive cash flow
from operations; and/or seek additional debt or equity financing.
   
     The  accompanying  financial  statements  do not  include  any  adjustments
relating  to the  recoverability  and  classification  of  recorded  assets  and
liabilities  that might be necessary should the Company be unable to continue as
a going concern.
   
   
Note 2 -- INVENTORIES
   
     Inventories  for the  period  presented  are stated at the lower of cost or
market and consist primarily of finished goods.
   
Note 3 -- REVENUE RECOGNITION
   
     Direct sales are  recognized  upon shipment of products to  customers.  The
Company  also leases  products to  customers  with an option to buy. The leasing
arrangements are accounted for as sales-type leases.
   
   
   
Note 4 -- NET LOSS PER SHARE
   
     Net loss per  common  share is  computed  by  dividing  the net loss by the
weighted  average number of common shares  outstanding at the end of the period.
Shares  issuable  upon the  conversion  of stock  options and  warrants  are not
included in the calculation since their effect would be anti-dilutive.







Note 5 -- DIRECT DATA, INC. ACQUISITION/DISSOLUTION
   
     In September  1994, the Company  completed the  acquisition of Direct Data,
Inc.  ("Direct  Data").  The Company paid  approximately  $2 million in cash and
issued  700,000  shares  (valued  at $2.56  per  share) of its  common  stock in
exchange  for all  outstanding  shares  of  Direct  Data.  The  transaction  was
accounted for using the purchase  method of accounting and the Company  recorded
goodwill of approximately $6 million.  During the fourth quarter of fiscal 1995,
the Company  determined  that the goodwill  related to the acquisition of Direct
Data was fully impaired,  and therefore,  wrote-off the entire balance resulting
in a charge included in the Statement of Operations for fiscal year 1995.
   
     In September 1995,  Direct Data received notice that its bank note creditor
would not extend its loan payment  terms and demanded  payment on a $1.3 million
bank note.  An officer and  director  of Direct Data and former  director of the
Company (the  "Officer")  had  personally  guaranteed the note. In early October
1995,  the  Officer  repaid the note and,  pursuant  to the  Officer's  guaranty
arrangement  with the bank,  became the holder of a security  interest in all of
Direct  Data's  assets.  Subsequently,  on October 5, 1995,  the Officer and the
Company  consummated an agreement whereby in exchange for the Company's approval
of the surrender of all of Direct Data's assets ($1,032,719 at June 30, 1995 and
approximately  $780,000 at October 5, 1995),  the Officer  released  the Company
from its $1.3 million  obligation (to assume the Officer's  obligation under the
guaranty) and agreed that the Company would have the option to purchase  397,684
shares of the Company's common stock owned by the Officer, for a period of three
years,  at a price of $.25 per share.  Additionally,  the  Officer  granted  the
Company the right to vote these shares during the three year option period.
   
     The transfer of assets to the Officer was  consummated  on October 5, 1995.
Immediately  prior to the transfer,  from September 29, 1995 to October 3, 1995,
all remaining  Direct Data employees were  terminated.  As a result of the asset
transfer and the Officer's earlier  re-payment of the bank debt, Direct Data had
no assets, no secured debt,  approximately  $1.6 million in unsecured trade debt
(not including the $1.9 million  intercompany  loan from the Company) and ceased
operations.  Direct Data notified its  creditors  that it would be unable to pay
its remaining  debts,  and pursuant to the Colorado  Business  Corporation  Act,
Direct Data was dissolved effective October 19, 1995.
   
     Management  believes  that Direct Data  represented a separate and material
line of  business  from  the  Company.  The  pretax  loss on  disposal  has been
accounted for as a loss from a discontinued  operation and prior years financial
statements have been reclassified to reflect the disposition.
   
   
   
   
   
   
   
   
   
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS
---------------------

     The Company was  incorporated  on July 30, 1991, and was in the development
stage until the quarter ended September 30, 1994. Since  inception,  the Company
has  raised  equity  capital  through  the  sale  of its  securities,  completed
development  of its initial  product,  negotiated  agreements  with suppliers of
components,  developed a marketing strategy,  and initiated sales of the POS-50r
portable credit card and check  verification  terminal.  During fiscal 1995, the
Company  continued to promote its product through the cellular  reseller channel
and, in the second  half of fiscal  1995,  enhanced  its  marketing  strategy by
focusing  sales efforts on  Independent  Sales  Organization  (ISO) channels and
began  development  on its new CDPD product  line.  In fiscal 1996,  the Company
continued  its  efforts  on the  POS-50r  and in the  second  half  of the  year
introduced two new  CDPD-based  products.  Substantially  all the revenue of the
Company for fiscal year 1996 was derived from the sale of inventories  for which
the Company had previously paid. These  inventories have now been  significantly
depleted.  As a result,  the Company must purchase  inventory for future product
sales. These additional costs have, and will continue to, result in smaller per-
unit working capital  infusion.  Given these  additional cash  requirements  and
lower net cash inflow,  coupled with the Company's current  financial  condition
and sales volumes, the Company may be unable to continue as a going concern.

     In 1993, the Company established a contractual  relationship with Solectron
Corporation  in  Milpitas,  California  for  subcontract  manufacturing  of  the
POS-50r. The Company ordered and received  approximately 2,900 POS-50r terminals
through June 1995.  The Company  built a large  inventory  of finished  goods in
anticipation of filling orders from customers.  Because of higher-than-desirable
inventory  levels and poor sales  results,  the Company  stopped  production  by
Solectron in April 1994.  Discussions  with Solectron during the Company's third
fiscal  quarter of 1995 led to a conclusion  that $1.4 million of raw  materials
inventory  held by Solectron  should be recorded as a liability on the Company's
financial statements.  During fiscal 1996, the Company negotiated an arrangement
whereby  Solectron  sold all of the raw  materials  inventory  and  concurrently
signed a mutual release with the Company.  As a result, the Company recognized a
$1,099,412 gain on the restructuring of its debt to Solectron.  The Company then
signed an agreement with a third party for the future manufacture and sale of an
additional 2,000 POS-50r units.

     During fiscal 1995, the Company  acquired all of the outstanding  shares of
Direct Data, a distributor of POS-related products. During fiscal year 1996, the
Direct Data assets were surrendered to Direct Data's secured creditor in lieu of
the creditor's  foreclosure on a past due $1.3 million  obligation.  Direct Data
was left with no assets,  ceased  operations,  and was  dissolved on October 19,
1995.  As a result of the surrender of Direct Data's assets in settlement of the
$1.3 million  obligation and the  dissolution of Direct Data in fiscal 1996, the
Company recognized a gain on restructuring of payables and debt of $2,332,411.


Net Sales

     Net sales of $387,218 for the first fiscal  quarter of 1997  increased from
net sales of  $282,135  generated  during  first  fiscal  quarter of 1996.  This
increase is attributable to: a) the sale of approximately 100 more POS-50r units
than in  previous  year,  and;  b) the  sale  of  approximately  $40,000  of the
Company's new CDPD products.


Gross Margin

     Gross margins increased from $31,175 in the first fiscal quarter of 1996 to
$121,769  for the  first  fiscal  quarter  of 1997.  This  increase  was  mainly
attributable to: a) more favorable product margins of the Company's CDPD product
line, and; b) a decrease in inventory reserve requirements of $80,000.



Operating Expense

     Selling, general and administrative expenses decreased from $415,812 in the
first fiscal  quarter of 1996 to $171,157 in the first  fiscal  quarter of 1997.
This  increase  was  due  primarily  to:  a)   significant   reductions  in  all
advertising,  promotion, public relations and investor relations programs due to
lack of working capital,  and; b) headcount  reductions in sales,  marketing and
administration over 1996 staffing levels.

     Research and  development  expenses  decreased  from  $127,097 in the first
fiscal  quarter of 1996 to $118,469  in the first  fiscal  quarter of 1997,  due
primarily  to a  sublease  agreement  on a  portion  of the  engineering  leased
facility.


Other Income/(Expense)

     Other income/(expense) increased from $(14,246) in the first fiscal quarter
of 1996 to $5,967 in the first  fiscal  quarter of 1997.  This  increase was due
primarily to a $15,000  loss on sale of assets  which was incurred  during first
quarter of fiscal 1996.


Financial Condition, Capital Resources and Liquidity

     The Company continues to have significant  concerns regarding its financial
condition and liquidity.  Since May 1995, when the Company was notified that the
transaction to sell its Direct Data subsidiary had been terminated,  the Company
has  continued  to reduce its  expenses  through  cost  controls  and  workforce
reduction.  It also has been successful in securing  additional  orders from its
largest  customer,  CSI, and in selling off the  majority of its finished  goods
inventory,  for which it had previously paid. As a result,  the Company has been
able to maintain operations, although it has been unable to significantly reduce
its  obligation  to its largest  creditor.  The Company has recently  negotiated
favorable  arrangements for future manufacture of its products with little or no
cash required until the finished product is sold. While this will  significantly
assist the Company's cash flow, it can no longer rely on the full sales price of
the product to meet its working capital  requirements.  Instead, it must succeed
on the gross  margin of its product  sales.  This will  require that the Company
achieve  an  increased  order rate on its  POS-50r  and new CDPD  products.  The
Company has engaged in  discussions  with  terminal  providers  and  transaction
processors  regarding  potential  engineering  development  contracts,  which if
entered into would provide additional working capital to the Company.  While the
Company  believes that its  relationship  with CSI  continues to be strong,  the
Company  is  highly  dependent  upon  its  sales to CSI,  and the loss of,  or a
significant  decrease in those sales would have a material adverse effect on the
Company's cash position and its ability to sustain operations.

     As a result of these  developments,  including  the  failure to sell Direct
Data,  and its  subsequent  liquidation,  and in  order to  continue  as a going
concern,  the  Company  will need to  increase  its  revenue  levels and product
margins,  negotiate product development  contracts,  generate positive cash flow
from operations and/or acquire additional debt or equity financing.














Part II


The  information  required  for Part II,  Items  2  and  4  are  not applicable.


ITEM 1 -- MATERIAL DEVELOPMENTS IN CONNECTION WITH LEGAL PROCEEDINGS
     
     In early  September  1994,  two  shareholders  filed a Colorado state court
class action lawsuit in Denver District Court against the Company,  three of its
directors,  and others  (Jacques A. Machol  III, et al. v. U.S.  Wireless  Data,
Inc.,  et al.).  The lawsuit  alleges  various  fraudulent  acts,  omissions and
misrepresentations  by the  defendants  in  connection  with the initial  public
offering of and subsequent trading in the Company's stock.

     A second  shareholder class action complaint against the Company,  three of
its directors, and others was filed by one shareholder in late September 1994 in
U.S. District Court, Denver, Colorado (Jeffry Appel on behalf of himself and all
others similarly situated, v. Maurice R. Caldwell Jr., Rod L. Stambaugh, Leonard
Trout, Donald L. Walford,  Frank LaHue, U.S. Wireless Data, Inc., among others).
The  complaint  also  arises  out of the  Company's  public  offering  and makes
allegations  similar to those made in the first  complaint.  The Denver District
Court lawsuit has been stayed by court order so as to avoid duplication with the
U.S. District Court lawsuit.

     In February 1995, another class action complaint was filed in U.S. District
Court,  Denver,  Colorado by the same  plaintiff  who had  previously  filed the
Colorado State Court class action in early September 1994 (Jacques A. Machol III
and Prism Partners I on behalf of themselves and all others similarly  situated,
v. U.S. Wireless Data, Inc., Maurice R. Caldwell Jr., Rod L. Stambaugh,  Leonard
Trout,  Donald L.  Walford,  Frank LaHue,  among  others).  The  Defendants  and
allegations are the same as in the original and subsequent  lawsuits.  The court
has  consolidated  the two federal cases and trial has been  scheduled for March
1997.  Several  settlement  discussions  have been held,  but to date, no formal
agreement has been reached.

     The Company  believes  these  lawsuits are without merit and denies that it
engaged in any fraudulent acts or omissions,  or otherwise  violated  Federal or
Colorado  law.  In each case,  the  Company  intends to  vigorously  contest the
litigation  on  its  merits,  as  well  as  the  suitability  of  the  plaintiff
shareholders to act for the alleged class.  Nonetheless,  because  litigation of
this type involves  inherent  risks,  it is not possible for the Company at this
time to make an assessment of potential exposure,  nor to predict with precision
what the ultimate outcome will be.



ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES

     The Company is indebted to Omron Systems,  Inc.  ("Omron")  under a Secured
Installment  Note dated March 27, 1995, for the principal amount of $472,800 and
interest  thereon.  The terms of such note required the Company to make payments
of principal and interest each month from April 1995 through  December  1995, at
which time the note became due.  The Company  made one  principal  payment,  has
continued to make monthly interest  payments in accordance with the terms of the
note,  but has made no other  principal  payments  under  this note and for that
reason is in default.  The Company believes that as of the date of the filing of
this  report,  the total  amount  due under such note is  $398,666.  The note is
secured by 1,770 credit card  terminals  which are not  currently  needed by the
Company for its business  operations.  Subsequent to the end of the third fiscal
quarter 1996, the Company has entered into  discussion  with Omron regarding the
possible restructuring or mutually agreeable settlement of this note.



ITEM 5 -- OTHER INFORMATION

     On October 23, 1996 the Company  announced that, in a continuing  effort to
reduce costs, it would consolidate its operations in Colorado Springs, Colorado.
The Company  previously  had offices in Boulder and Colorado  Springs.  Also, as
previously reported on Form 8-K, and as part of this restructuring,  the Company
announced that Michael J. Brisnehan,  its president and chief executive  officer
since July 1995 had resigned,  effective immediately. The position was filled by
Rod L. Stambaugh,  chairman, and former vice president of marketing and business
development. Mr. Brisnehan has remained on the Company's board of directors.



ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K

     a)  Exhibits required by Item 601 of Regulation S-B
       None


     b)  Reports on Form 8-K
                There  were no reports on Form 8-K that  were  filed
          during the fiscal quarter ended September 30, 1996.



































                                  
                                  
                                  
                             SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                   U.S. WIRELESS DATA, INC.
                                   Registrant


Date:      November 14, 1996      By: \s\  Rod  L. Stambaugh
                                  
                                  President and Chief Executive
                                  Officer