Gemalto placing its chips on contactless payment surge

Friday, January 14, 2011

Netherlands-based digital security company Gemalto is banking on a jump in contactless payment adoption from Latin American retailers and banks, the company's regional strategic marketing director, Ernesto Haikewitsch, told BNamericas.

While those payment methods are already showing up in some public transportation systems, commercial and financial entities are just starting to show interest, according to the executive.

"This is expanding because you can get all the security you need in a chip and encrypted transactions in a tap-and-go payment," he said. "We are talking about low-amount transactions in places where speed is important... like fast food restaurants and pharmacies."

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Gemalto expects to see interest to transform into a significant rise in contact payment deals through 2012.

"In Brazil, there are already several pilot projects being run, and we feel that banks and retailers in Chile are interested in advancing in these initiatives," he said. "Credit card companies such as MasterCard and Visa are very ready."

Other areas where such solutions can be applied include highway tolls and parking lot fees, the executive added.

Migration to EMV technology - or chip-based credit cards - will also continue to represent one of Gemalto's main sources of Latin American business this year.

Meanwhile, the company is also eyeing business opportunities generated by public sector activity. Haikewitsch pointed to programs such as online tax payments in Brazil as areas where Gemalto can leave its mark.

"Government modernization is a trend happening worldwide, including Latin America," he said. "In Brazil, the government has already launched the RIC [Registro de Identificacao Civil] program, through which there will be identification cards... with chips with each citizen's information."

"There are also some healthcare initiatives whereby you can [use chips to] identify users."

Within Latin America, Gemalto has offices in Argentina, Brazil, Colombia and Mexico, and is serving Chile and Peru through partners. The company has no plans to open new offices in the foreseeable future, the executive said.

Globally, Gemalto saw third quarter revenues rise 25% to 500mn euros (currently US$667mn), and expects 2H revenues to top 1bn euros.