Zwipe Drops Payments Business in Pivot to Access

Zwipe is officially dropping its biometric payment card efforts to focus exclusively on access control. In announcing the pivot, Zwipe CEO Robert Puskaric explained that it is “a natural outcome” of the significant market traction its Zwipe Access solution achieved in 2023, with over 30 partnerships signed or in progress last year.

It’s a remarkable change of course for Zwipe, and not a good sign for the prospects of the overall biometric payment card market. The company emerged as a key pioneer of the concept of fingerprint-scanning cards in the latter years of the last decade, and would often point to signs of growing momentum as the emerging market took shape.

But, as the company explained in a statement announcing its change of focus, “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.”

The good news for Zwipe is that the core technology it developed for its “Zwipe Pay” solution also allowed it to build “Zwipe Access”, a smart card meant for access control that is now picking up momentum. Zwipe says it now has 60 proofs of concept in progress, with big-name partners including Berkshire Hathaway Energy Group and Fortune 100 firms.

Part of its newfound success can be attributed to the EU NIS2 Directive on cybersecurity requirements for certain parts of critical infrastructure in the European Union. NIS2 will take effect in October of this year, and has already emerged as “a critical catalyst” for Zwipe’s business activity regarding its biometric access card, the company says.

As a result, a strategic restructuring is now underway, with five employees to be cut from the Zwipe Pay team on a net basis. Zwipe expects to save NOK 40 million in operating costs this year, and to see the full impact of its cost reduction efforts starting in the middle of Q2.

“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,” Puskaric said. “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.”

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January 16, 2024 – by Alex Perala