Biometric card company Zwipe is backing out of the payments market following disappointing uptake of its fingerprint-powered contactless cards.
The Norwegian firm is commencing a restructuring and a new strategic direction, turning its attention instead to the biometric access control market.
The discontinuation of payments and a slimmed down business will reduce operating costs in 2024 by approximately NOK 40 million compared to 2023
Zwipe CEO Robert Puskaric. “Our new strategic direction will mean laser focus on the singular objective to rapidly achieve commercial success with Zwipe Access, while operating in as lean a manner as possible to maximize our financial flexibility.”
Zwipe has historically focused primarily on the development and application of its biometric authentication technology in the payments market. Over the last two years, Zwipe completed the development of Zwipe Pay including mobile enrollment solutions, achieved full certification of the technology by both Visa and Mastercard, and spent significant time lining up the biometric payment card value chain players to launch quickly once banks decided to move forward with biometric payment cards.
However, neither market adoption nor the pace of commercial launches has materialized in the manner Zwipe or other players had expected, particularly towards the end of 2023.
So far, only one bank, Kuwait International Bank, has commenced a roll out, and this limited to VIP clients. Zwipe has previously piloted the technology with Fidor Bank, Intesa Sanpaolo, Op Financial and others.
“The decision to focus on Zwipe Access is a natural outcome of the traction seen in 2023. However, all the effort that went into developing and certifying Zwipe Pay is what laid the foundation for success with Zwipe Access. Our Access partners and end customers tell us they gain confidence using technology subjected to the rigorous testing required for certification in the payments market,” states Puskaric.
On a net basis, five employees will leave Zwipe, with departures linked to Zwipe Pay, while the Zwipe Access sales team will increase slightly as the company ramps up commercialization efforts here.
“While it is heartbreaking to let highly valued employees go and transition away from Zwipe Pay, we fully believe this is the right course of action for our shareholders." says Puskaric. "Zwipe Access is a higher margin business with visible commercial inroads, and our objective is for Zwipe to approach breakeven in H2 2025 as a result of higher margins, lower operational costs, and lower supply chain costs."
Learn more about payments at NextGen Nordics on the 23 April 2024.