Zwipe: Access to Virtually Evry Nordic Bank

TietoEVRY provides cards for about 200 banks. It owns the customer relations with these banks, making this partnership arguably more important than each one of Zwipe’s card manufacturer partnerships. We have found older data points regarding that Tieto’s contactless card solution, before the Evry merger, where installed by 400 institutions in over 30 countries. Following Evry’s acquisition of Tag Systems Finland (incl. Latvia branch) in 2013, Evry issued 20m cards for 70 card issuers in 12 countries. By 2017, this number had grown to 25m cards and 100 card issuers. Thus, both Tieto and Evry each had a strong market position prior to the merger. Many of its bank relations have now run for over two decades. We believe the new TietoEVRY constellation is particularly dominant in the Nordics and the Baltics, as mentioned in Zwipe’s press release, although we also suggest that there are a lot of relations in e.g. Eastern Europe and Asia. We expect TietoEVRY to have a playbook from the adoption of contactless cards and expect it to use those tricks for the biometric adoption.

TietoEVRY has an entire business unit for cards, so it is not about some consultants sometimes running around selling cards. This unit is headed by Jarmo Rouhiainen, who built up Tag Systems Finland, as its CEO. At the time of the acquisition in 2013, Tag Systems had 30 employees and sales of about NOK 70m. We assume the organization is now significantly larger than that, considering both Tieto’s and Evry’s long focus in the area, prior to acquiring TAG. Perhaps more important, Zwipe is now supported by a large, dedicated card sales organization.

TietoEVRY is not a competitor of Zwipe, but rather the customer of Zwipe’s card manufacturer customers. It buys cards in bulk and perform the so called personalization, i.e. program the settings of the card, e.g. the name and transaction limits etc. Moreover, it works a lot with education of the banks.

Despite being a leader in contactless cards, TietoEVRY has not done anything in biometrics (as far as we know), up until now, that is. We find the timing of entering biometric cards right now interesting as we assume the choice is based on feedback and incoming calls from its 200 bank customers. Thus, this is yet another data point suggesting that the market is indeed finally happening, after many “wolf cries” (for a lack of a better expression) in the past.

We plan to dig more in the partnership, but our initial conclusion is that it serves as evidence that Zwipe has an important role to play in the biometric card market.