Gemalto Plans to Introduce Smart Chip for Mobile Payment

Gemalto NV (GTO), inventor of the smart chip used in bank and phone cards, will introduce a card tested by Mastercard Inc. (MA), Visa Inc. (V) and American Express Co. (AXP) to get more mobile operators on board with wireless payment.

Gemalto will unveil the SIM card, based on the short-range wireless technology called near field communications, at the Mobile World Congress. The Paris-based company expects more consumers will use smartphones for purchases such as taking the subway and buying movie tickets starting this year.

“We’ve sold this SIM to two or three carriers and it looks promising,” Philippe Vallee, who heads Gemalto’s telecommunications unit, said in an interview before the annual congress, which starts today in Barcelona.

The SIM card, which is compatible with Mastercard, Visa and American Express’s technology standards, is built so that carriers can gradually upload services onto it as they reach new deals with partners like banks and transport companies, Vallee said.

One in five smartphones will be NFC-enabled by 2014, which amounts to about 300 million units, researcher Juniper estimates. NFC complements the earlier short-range wireless system Bluetooth by making it easier to exchange small amounts of information with a tap. The service will be introduced by operators in 20 countries before the end of the year, with a focus on western Europe and North America, Juniper said.

Nice Trial

In one of the early European initiatives of contactless payment, France Telecom SA (FTE), Vivendi SA (VIV)’s SFR and Bouygues SA (EN) teamed up last year to launch a pilot project in Nice, in which 3,000 residents were given an NFC phone, equipped with a Gemalto SIM, to use in local shops and trams.

France Telecom is testing NFC applications at home as well as in Spain and the U.K., where it has teamed up with Barclaycard, a Barclays Plc unit, for payment services. France’s largest mobile operator sold 500,000 NFC phones in Europe last year, mostly to French clients, spokesman Tom Wright said. Gemalto is among the SIM card makers the company is working with on NFC, he said.

Gemalto’s Vallee declined to give forecasts ahead of the company’s full-year earnings report, scheduled for March 8.

In Germany, Deutsche Telekom AG (DTE) is set to introduce contactless mobile services this summer, said Dirk Wende, a spokesman for the Bonn-based company. The carrier said in June it will use Giesecke & Devrient SIM cards.

Gemalto slipped 0.8 percent to 41.85 euros at 11:47 a.m. in Paris. The stock had jumped about 21 percent in the 12 months through yesterday. The company has a market value of 3.7 billion euros ($5 billion).

To contact the reporter on this story: Marie Mawad in Barcelona via mmawad1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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