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Zwipe: The IDEX collaboration is positive news for the market

Redeye Research Note timeStamp 2020/04/20

Redeye reiterates its view of Zwipe. In our view, today’s news on the IDEX collaboration are positive for the biometric smartcard (BSC) market.

Today’s news were not a major surprise. Idemia has already chosen IDEX as a sensor provider for the new Pay ONE platform with Zwipe, which was announced before Easter (find our comment here). Idemia has an old partnership with IDEX, stemming from Morpho/Safran that later became Idemia, after the fusion with Oberthur. IDEX has up until now mostly had traction in contact-based cards, as it has not been able to compete with FPC in terms of e.g. power consumption. We do not see a market for contact-based applications. However, according to IDEX, its new sensor is a major leap forward. We have no insight here, but we note that for whatever reason Idemia has decided to use IDEX instead of FPC in its platform for contactless BSCs.


We assume FPC will enter the stage later and join the Pay ONE platform. One possible theory is that adding IDEX to the platform before the market leader FPC is negotiation tactics from Idemia. Regardless, we see no issue for Zwipe. Zwipe’s objective is to be independent and sensor-agnostic. The more fingerprint sensor competition, the lower cost for a biometric smartcard (BSC), meaning a larger biometric smartcard market. Thus, we believe that today’s news are positive for the market. As we have preivously written, a change in the competitive dynamics for fingerprint sensors can speed up the adoption rate, by lowering the cost, whereas a maintained monopoly position by FPC likely would be negative and hamper the market.


The press release also mentions cross-licensing of IP. We believe Zwipe’s wait time extension patent might be involved, because this is in theory a showstopper for anyone who would want to play in biometric payment cards. IDEX has an old appeal against Zwipe’s post placement patent. We find it logical that IDEX will withdraw the appeal. Moreover, IDEX has some IP in enrollment solutions that could be of interest for Zwipe’s customers.

The stock has gained momentum, following a +34% surge YTD, but still looks severly depressed looking at one year.

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