Biometric card company Zwipe is withdrawing from the payments market due to disappointing adoption of its fingerprint-powered contactless cards.
The Norwegian firm is initiating a restructuring process and shifting its focus to the biometric access control market. This transition will result in a streamlined business model, aiming to reduce operating costs by approximately NOK 40 million in 2024 compared to 2023.
Zwipe CEO Robert Puskaric stated, “Our new strategic direction will mean a laser focus on the singular objective of rapidly achieving commercial success with Zwipe Access, while operating in as lean a manner as possible to maximize our financial flexibility.”
Historically, Zwipe concentrated on developing and applying its biometric authentication technology in the payments sector. Over the past two years, the company completed the development of Zwipe Pay and mobile enrollment solutions, achieved full certification of the technology from both Visa and Mastercard, and worked to align with biometric payment card value chain players to expedite launches once banks were ready to adopt biometric payment cards.
However, the anticipated market adoption and pace of commercial launches failed to materialize as expected, especially towards the end of 2023. To date, only Kuwait International Bank has begun a rollout, limited to VIP clients. Zwipe has previously pilot-tested the technology with several banks, including Fidor Bank, Intesa Sanpaolo, and Op Financial.
Puskaric emphasized, “The decision to focus on Zwipe Access is a natural outcome of the traction seen in 2023. All the effort that went into developing and certifying Zwipe Pay has laid the foundation for success with Zwipe Access. Our Access partners and end customers indicate that they gain confidence from using technology that has undergone the rigorous testing required for certification in the payments market.”
As part of this transition, five employees will be departing Zwipe, linked to Zwipe Pay. Conversely, the Zwipe Access sales team will grow slightly as the company intensifies its commercialization efforts in this area.
Puskaric remarked, “While it is heartbreaking to let highly valued employees go and move away from Zwipe Pay, we firmly believe this is the right course of action for our shareholders. Zwipe Access presents a higher margin business with clear commercial opportunities, and our objective is to bring Zwipe to breakeven by the second half of 2025 through improved margins, lower operational costs, and reduced supply chain expenses.”
Learn more about payments at NextGen Nordics on 23 April 2024.