Zwipe - Norwegian Fingerprint Recognition for Bank Cards

Stocks
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I haven’t found a thread for Zwipe yet, so let’s open one.

Zwipe is a Norwegian company specializing in fingerprint recognition technology, with a focus on fingerprint recognition for payment cards. Some predict a strong future for these, while others believe mobile payments will eliminate all card payment transactions. Time will tell who is right.

Redeye released a relatively positive report: https://s3-eu-west-1.amazonaws.com/rdey-cms-prod/app/uploads/2020/09/zwipe-h120-pdf.pdf

Are there any investors in this company on the forum? I joined in early summer (on the Stockholm stock exchange) at around 7 SEK, and last Friday’s dip allowed me to add a bit more.

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Tekninen analyysi (ei kyselyitä)
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Sometimes I took quick +15% rides with this, but otherwise it’s a pretty unknown company to me.

https://www.avanza.se/placera/telegram/2020/09/07/zwipe-private-placement-motsv-25-av-kapital-lantto-tecknar.html

A share issue is coming.

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Interesting concept! Admittedly, as a Finn and a digital native, I wonder why the card would be developed further? In the early days of credit cards, payments were handled with slips on which card information was embossed (hence the raised letters), and the company then sent these slips for processing. Debit cards only emerged with the widespread adoption of electronic payments and magnetic stripes. Now, however, evolution is increasingly moving towards mobile payments. For me, it’s much more common to use Google Pay than the card itself, not to mention cash. The card is practically just an identification tool that provides information on which account to debit. In Africa, for example, it’s common to use mobile payment systems like Mowali. In Western countries, Google Pay and Apple Pay are rapidly becoming more common.

Perhaps this innovation’s market is the United States, that backwater of payment systems? It’s good that security is improving (e.g., the card recognizes the user for contactless payments), but is the physical bank card really a dying concept in the near future?

Furthermore, what does this technology cost? Banks will surely calculate carefully whether it’s cheaper to cover misuse cases or to buy security technology for tens of millions of cards.

Addition: After reading the report, I have to wonder a bit:

“over 50% would be willing to pay at least NOK 38 per month”

€3.5/month (€42/year) seems quite steep to me when the same feature is free on a phone. Especially since the older generation doesn’t want to use contactless payments or the card at all. Perhaps this would have potential for those premium credit cards that already cost several tens of euros a month?

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These Fintech boutiques are popping up like mushrooms after the rain. Impossible to keep up. I wonder if NETS had a concept where you pay/authenticate with “fingertip capillaries” :laughing: all sorts of things..

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It seems like 2021 will be an interesting year for Zwipe. Will biometric payment cards become a mass-market product? The company itself certainly strongly believes so.

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Tieto - Tähtäimessä kannattava kasvu
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A thread about Zwipe was already created, I hadn’t even noticed :slightly_smiling_face:

This year, strong growth is expected if the targets are met. Zwipe’s products will reach a large audience especially through Tietoevry and, through them, OP’s customers. In addition, Tietoevry is collaborating with and communicating about this excellent product to numerous other banks (up to 200). RedEye analyst Viktor calls this “megaphoning” the Zwipe product through Tietoevry.

The opportunities for expansion are therefore very significant. As soon as OP’s customers start utilizing Zwipe’s products, significant revenue will be generated. The results of this collaboration should be visible in the second half of the year:

“At the moment over 60% of payment terminal transactions made with OP cards consist of contactless payments, which means that our customers have adopted this payment method very well. Biometric payment cards provide a secure and easy payment method which also enables contactless payments possible of over 50 euros. We are waiting to pilot this new payment method with our customers at latest during the second half of next year. We hope that the user experiences in the pilot will be good, so that we could bring this new alternative to our card portfolio,” says OP cards’ business lead Teemu Korte .

From Zwipe’s latest company presentation (which was also presented at RedEye’s technology days), I’ve picked a couple of slides that support the penetration of biometric cards, and thus Zwipe’s opportunity to gain popularity among ordinary consumers and, with this, to grow at an accelerating pace.

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Card technology enables secure payments, as the fingerprint ensures that no one can misuse the card. This would also make payments over 50 euros possible (other than those within the contactless payment limit). Payments become easy, fast, and above all, secure!

Finally, RedEye’s (RE) estimate of revenue and key figures development in the coming years – that’s some wild growth!

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The analysis from the end of November is available for everyone to read:

https://www.redeye.se/articles/download-file/6085bddb-d4dd-344f-9c82-e76c644c8e39

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Somehow, I see the future in paying with phones. A card doesn’t really create any added value, quite the opposite. It’s probably difficult to get customers to pay when they basically have to be a bit of a technology pioneer and then still be willing to pay, even though the alternative is a phone. Perhaps in reality, this could appeal to those who don’t want to or can’t use a phone.

Currently, very little sales and an EV/Sales of approx. 9 in RedEye’s forecasts for 2022. Too many question marks for me.

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I find paying with a card much faster and more convenient than, for example, MobilePay. Especially with this Zwipe innovation, the good thing is that it apparently will allow larger purchases to be paid with contactless in the future.

I’ll have to see if I can bother to look into this case even better. This could have potential for my own portfolio too.

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I also came across this interesting new acquaintance today :grin: it’s possible that some kind of position will slip into my long-term portfolio soon :thinking: here are my thoughts on the case after reading both Red Eye’s reports on the matter:

  • The investment case seems to be progressing faster than expected, which is only a good thing.
  • Surveys have shown that there is demand for bank cards with biometric chips, even though there isn’t really a market yet → it’s only a matter of time until the market emerges.
  • Biometric cards vs. mobile payments: this is not an either/or case, as both support payment security. Those who rely solely on mobile payments are in trouble if their phone has a problem, while with biometric cards, you can always use a PIN code if the biometric chip doesn’t work. Additionally, not all banks currently support all forms of mobile payment (e.g., OP still doesn’t support Apple Pay).
  • As with all tech startups, Zwipe also has high risks. The “payday” is many years away, but I believe that if the market size proves to be larger than anticipated and Zwipe becomes one of the major players in the market, we could well exceed Red Eye’s bull case target price of 35 NOK. Of course, before that, the stock could linger closer to the bear case price of 6 NOK.

All in all, it seems relatively good at first glance, but it will probably require a lot of patience and spreading out purchases over time. It also seems to be a relatively illiquid stock at the moment, at least judging by Nordnet’s buy/sell volumes :sweat_smile:

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I’ve been looking into this case quite a bit this weekend, and while many good points have emerged, I’m leaning towards the idea that it will undoubtedly remain in the shadow of mobile payments.

All the arguments for it, such as being able to securely make contactless payments over 50 euros and avoiding physical contact with card readers, are also present in the competing method: mobile payments.

I advocate that cash will not disappear from the world for decades, and I also believe that payment cards will remain a payment method for at least this decade. This is where the big opportunity lies if this feature becomes standard on all payment cards, but what then? Can it scale for other purposes, or will new innovations emerge in the future when cards may no longer exist?

https://www.mobilepay.fi/artikkelit/2020/06/25/mobilepay%20vuosipuoliskon%20kasvuluvut

“In the app’s user profile, a much-discussed digital leap can be observed during the spring, as the average age of MobilePay users is steadily increasing. The majority of new users are adults aged 35–44. There are currently about 1.4 million registered users in Finland, and new users are joining at an average rate of 1,300 per day.”

To a greater extent, at least in Finland, the average age of mobile payment users is also rising, so my envisioned customer group is also shrinking.

If this is sold as a Premium card, OP can certainly sell it to its customers, including myself, under the pretext that it can be paid for with bonuses and possibly accrue bonuses itself. I might even have been a user of this feature myself, but when I started thinking about it, I wondered why I wouldn’t just enable the payment feature on my phone.

Technology doesn’t always work as desired, which is why I believe cash and card payments will still persist in the future. Case 1: Phone doesn’t work – an alternative payment method is needed (card or cash). Case 2: Payment terminals don’t work – cash needs to be withdrawn from an ATM with a card. Will there be a point in this chain of events where the physical card becomes unnecessary?

Too many question marks in the air, even though I see drivers for this. I don’t know if I trust it enough to be willing to invest my money in it. In a 5-10 year timeframe, there might be a pot of gold available, as well as, of course, benefiting from shorter-term price fluctuations.

This is my own reflection with post-workday brain.

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We reiterate our base case of NOK 20 per share. With today’s OPEX run rate, cash will suffice for at least nine months, taking into account the grants from Skattefunn and EU Horizon of in total NOK 15m.The next milestones of the pay ONE project are certifications and pilots, which we think should happen well within this nine-month range.

There seems to be quite a lot of risk in the stock :slight_smile:

Agreed! Why would anyone pay extra for an inferior product? A bank card is in general a completely outdated product, and those who use it have already fallen a bit behind in technological development. In today’s world, purchases are paid for with a phone or even a smartwatch!

This could have been a cool company 10 years ago, but at the moment, it looks very much like they’re trying to cash in on the FinTech and IPO boom with the bulls. Mentally, this is a bit like a landline technology IPO :smiley:

Of course, since cash also refuses to die, maybe there will be enough card-loving grandpas for decades, and if this becomes standard in all new cards, it’s possible that they can extract quite a bit of money from shrinking markets.

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Zwipe cards’ new pilot project begins in Sweden.

Subject to a positive outcome from the pilot, Vopy aims for an initial rollout from Q4 2021, starting with 100,000 biometric payment cards by the end of this year and 500,000 cards in 2022.

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Zwipe has signed 4 new partnership agreements. All of them aim to start pilots during 2021.

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New report from Redeye. Base case raised 24 → 27 NOK.

Samsung enters the game
It was recently reported that Samsung will enter the biometric smart card market. Samsung’s
own in-house secure element solution makes it the second largest secure element player,
and a competitor to NXP, STM, Infineon and Zwipe/Idemia. However, it is also a potential
supplier of fingerprint sensors. Thus, similar to many other players in the industry, Samsung
is both a potential partner and competitor. The Samsung news is positive for the market and
all of its participants, as the competitive dynamics speeds up the market. A major tech giant
like Samsung committing resources to this space also verifies the potential of the market.
Last, it is worth noting Samsung’s strong position in mobile payments. Apparently, mobile is
not enough for Samsung that follows Apple and many other players in wanting to have its own cards. Given its knowledge of biometrics, it was only logical that Samsung then wanted
to go for biometric cards.

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Summer news, moving forward with great momentum!

Dear stakeholders of Zwipe,

Through the first half of 2021, our global payment ecosystem of Smart Card
Manufacturers, Payment Processors, Banks and Go-to-market Partners has continued
to expand at a rapid pace, further strengthening our foundation for future
market success. In these challenging times, our growing team of competent and
passionate Zwipers, spanning 14 different nationalities in nine
countries across three different continents and five time zones from Colorado
Springs to Singapore, has demonstrated exceptional teamwork with
a solid focus on customers. I am delighted to share that the
interest in biometric payment cards based on Zwipe technology, which deliver a
more convenient, secure and safe means to pay, has never been stronger. The
voices of consumers captured by Zwipe in the UK, USA, Canada, Sweden, Norway and
Romania since August last year are encouraging and consistent with
similar findings from card schemes and other industry players.

Entering the Indian subcontinent and APAC region

In the first half of 2021, we announced six
new Smart Card Manufacturers into our ecosystem:

·
KL HI Tech (Zwipe signs up Indian partner to manufacture biometric payment cards | Biometric Update
-to-manufacture-biometric-payment-cards) in India

·
Beautiful Card Corporation (https://findbiometrics.com/zwipe-unveils-beautiful
-partnership-in-biometric-cards-effort-7051101/) in Taiwan

·
Silkways Card and Printing Ltd (https://findbiometrics.com/zwipe-establishes
-biometric-cards-partnership-bangladesh-706162/)in Bangladesh

·
Three card manufacturers in Europe and Asia who at this stage want to remain
anonymous

Together, these manufacturers deliver around 200 million payment cards annually.
In addition, we extended and expanded our partnership with TAG Systems, who
delivers 100 million payment cards annually. Looking forward, it is great to see
that our SCM and processor and issuer pipelines continue to grow.

The encouraging developments with card manufacturers received a big boost
when Asia’s largest payment processor, Financial Software and
Systems (https://www.finextra.com/pressarticle/87526/zwipe-ties-up-with-fss-for
-global-roll-out-of-biometric-cards) (FSS) embraced our next-generation payment
cards platform based on Zwipe Pay ONE technology. FSS manages over 800 million
cards, and we are now working with them to bring our ground-breaking innovation
globally. We also strengthened our regional presence by appointing Masterline
and Sonali Intellect Ltd. as our business development partners in India and
Bangladesh, respectively.

Acceleration in the MENA Region and Europe

Middle East and North Africa (MENA)

On the back of growing demand for biometric payments cards in the MENA
region, Network International (https://findbiometrics.com/zwipe-adds-network
-international-to-mea-partner-roster-for-biometric-cards-706281/) (NI),
providing payment services to over 200 banks in Middle East and Africa,
and Middle East Payment Services (https://findbiometrics.com/zwipe-gets-mena
-distribution-partner-biometric-card-solution-76202103/) (MEPS), a leading
payment service provider in the Levant region, entered new partnerships with
Zwipe. NI and MEPS have boosted our reach and delivery capabilities in the MENA
Region, on top of our already strong network of prominent partners in the
region, notably Masria Digital Payments (https://findbiometrics.com/masria
-partners-zwipe-biometric-payments
-032601/), Inkript (https://thepaypers.com/cards/inkript-zwipe-to-launch
-biometric-payment-cards–778700), areeba (https://findbiometrics.com/areeba-to
-offer-zwipe-biometric-payment-solutions-to-banks
-910147/) and Veritech (Zwipe Teams with VeriTech on Biometric Payment Cards Platform
-biometric-payment-cards-platform-912041/). To effectively serve our growing
partner network and issuers, we appointed Ramzi Saboury as the General Manager
for the MENA region. Ramzi brings over 26 years of experience and network in
payment services in MENA from leadership roles in Kuwaiti banks, VISA and
areeba.

Europe and the UK

In the past few months, we have seen an increasing in-flow of interest from card
manufacturers in multiple regions, most notably in Europe. The same can be said
for issuer engagements that come through our Processor Partners and Card
Manufacturers in Europe, especially in the UK and Nordics. This is proof that
our “Megaphone” partner strategy works! Swedish
fintech VOPY (Sweden’s Vopy to Launch 100,000 Zwipe-powered Biometric Cards By Year End
-biometric-cards-702191/), providing embedded financial services to clients
globally, and France-based payment service provider, be ys
Pay (https://www.cardsinternational.com/news/france-be-ys-pay-zwipe-biometric
-payment-cards/), selected Zwipe Pay ONE (ZPO) cards for their issuers, aiming
to pilot Zwipe Pay ONE this year. Both these developments came within months of
OP Bank’s decision to pilot with cards based on the Zwipe Pay ONE platform
together with our Go-to-market partner, TietoEVRY. OP is Finland’s largest
financial services group and serves over four million customers.

Delivery of Zwipe Pay ONE on track

We had strong progress in the development of Zwipe Pay ONE, the world’s first
Single Silicon based biometric payment platform offered to card manufacturers
globally. In April 2021, we demonstrated our enrollment solution and touch-free
payment transactions above the transaction cap at a Point-of-Sales terminal with
test keys to emulate fully EMV authorized and authenticated transactions in a
live environment. The feedback from the market was very positive as everyone
could see how these cards quickly and reliably provide a considerable boost to
user experience and security.

In fact, we have now passed most critical milestones and major risk points, with
only piloting and certification left before commercialization in mass volumes.

Next steps - pilots and certification

Apart from pilots planned from late this quarter, certification will represent
the last milestone before commercialization. We have already performed pre-tests
at accredited test labs with excellent results.

We are now working closely with the card schemes to secure these processes,
which will be explained in detail during our H1 2021 reporting on 26 August. In
the coming weeks, we will start handing out Zwipe Pay ONE demo cards
to issuers and partners and continue to help them prepare for commercial
launches.

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New research update for Zwipe released!

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Zwipe Pay ONE under evaluation with Global Tier 1 Smartcard Manufacturer

As Zwipe continues to expand its relationship
with smartcard manufacturers around the world, we are pleased to announce that a
Global Tier 1 smartcard manufacturer has taken delivery of Zwipe Pay ONE
components to evaluate inhouse manufacturing of biometric payment cards using
Zwipe’s latest technology. Zwipe is a biometric fintech pioneering next
generation contactless payment globally.

Zwipe Pay ONE is the world’s first single silicon based biometric payment
platform offered to card manufacturers globally. It provides best in class
biometric performance and energy efficiency at highly competitive prices. By
enabling standard production processes and significantly lowering yield losses,
it is designed to be mass market ready, delivering a significant improvement in
both the consumer experience and the
commercial benefits. Recent consumer studies demonstrate a very positive return
on investment for this product enabling a strong business case for
manufacturers and issuers to adopt it. Zwipe Pay ONE has delivered on its
original design goals and offers significant opportunities across
the payments value chain.

“As organisations around the world adapt to the increasing demands of
their customers, we are seeing smartcard manufacturers gearing up to be able
to supply this latest generation of biometric payment cards. This new initiative
by one of the world’s largest manufacturers signifies a key
development for Zwipe as we move towards our new payment technology becoming a
mainstream proposition for issuers and cardholders,” added André Løvestam, CEO
of Zwipe.

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ZWIPE: COMPLETED DIRECTED PLACEMENT OF 4M NEW SHARES TO ERIK SELIN

Oslo (Infront TDN Direkt): Zwipe has completed a directed placement with gross proceeds of approximately NOK 104 million through the issuance of four million shares directed at Erik Selin Fastigheter AB at a price of NOK 26.10 per share.

This is stated in a Monday announcement.

Before the transaction, the company had an expression of interest from Erik Selin for the entire transaction size, it says.

The proceeds from the transaction will be used to finance further development and commercialization of the company, in addition to general corporate purposes and strategic investments.

Following the directed placement, Zwipe is fully financed through commercial launches in 2022 and beyond, based on the current business plan and market assumptions.

E: Oops! It came in Norwegian.

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