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This story appears in the December 2008 issue of Cards&Payments.
The global economy may be in the midst of an economic crisis, but so far it has not hurt the sales of the world's largest supplier of banking smart cards, Gemalto NV.
In fact, France-based Gemalto credits the crisis in part for an 18% increase in third-quarter sales in its banking card unit, to 113 million euros (US$163.2 million) from 100.7 million euros a year ago.
It seems customers opened new banking accounts in Europe and beyond at a prodigious pace during the quarter to spread their money around, according to Gemalto CEO Olivier Piou.
"[Banks] have never seen so many (accounts) created in such a short time," he told financial analysts in October. "And I can tell you the bank, it will not let those customers go. They are willing to give them very good credit (and debit) cards and all sorts of goodies; Gemalto is doing well."
And while most economic pundits are predicting a sustained global recession, observers have not seen banks put a moratorium on development of such products as mobile-banking and mobile-payment services or on rollouts of contactless cards, at least not yet.
"At this point, I don't have any strong indication the taps had been turned off," says Edward Kountz, senior analyst with U.S.-based JupiterResearch.
Rollouts of mobile payment using phones that support Near Field Communication technology are still delayed, although that was the case before the financial crisis hit.
Indeed, the prospect of a meltdown is not deterring Turkey's banking group BKM from its plans to launch the world's largest NFC mobile-payments pilot to date in January, with nine banks and at least two mobile operators participating.
Card vendor Gemalto also indicated the crisis did not affect third-quarter sales of contactless cards, although it is not a big supplier for U.S. banks.
Failing bank Washington Mutual Inc. this year had issued most of the up to 15 million contactless cards it planned to roll out by the time JPMorgan Chase & Co. acquired it at a fire-sale price in late September. It was not clear whether Chase would reissue the cards.
Gemalto rival Oberthur Technologies, also based in France, was the main supplier to WaMu. But Oberthur said it saw a drop in volumes of banking cards shipped to Europe, especially to the United Kingdom.
That may be because of the financial downturn. And Takeshi Marui, a department manager for Japanese chip supplier Renesas Technology Corp., estimates big Japanese banks are ordering about 25% fewer high-end banking smart cards these days.
Still, the financial crisis is not causing Gemalto to cut its revenue forecast for the year, predicting overall sales will grow by 8% to 12%.
CEO Piou, however, told financial analysts in October he is still "very paranoid and very vigilant" about the impact of the financial crisis and expected recession on Gemalto's business.
"But the more we dig, the more we are finding opportunities," he added. CP
