Thursday, March 31, 2011

Inside Secure CEO Sees Mobile Payment Boom

Eric Jackson03/30/11 - 08:58 AM EDT

NEW YORK (TheStreet) -- We've all heard that within a year or so we're going to be paying for stuff in stores with our phones instead of our wallets, using near field communication (NFC) technology.

I spoke recently with CEO Remy de Tonnac of Inside Secure. Based in Aix-en-Provence, France, Inside Secure is a fabless semiconductor company. It designs and marketing the secure chips and technologies used by payment cards and mobile phone manufacturers to allow contactless payments.

The company competes primarily against NXP Semiconductors(NXPI_) and counts Visa(V_),Qualcomm(QCOM_) and Nokia(NOK_) among its investors. Inside Secure is privately held, but it has said it thinks a public listing could make sense in the future.

The entire NFC space has been hot asGoogle(GOOG_) has announced support for contactless payments through its Android mobile operating system and as there has been much speculation about whether Apple(AAPL_) will enter the space.

Here are some highlights of de Tonnac's comments from our conversation:

We got started in this space in 1995. We were called GemPlus back then. We were a leader back then in smart cards. In 2000, we took a strong position with banks and what was known then as smart contactless cards. Today, we have a 75% market share in that business.

Back in 1999, our chief innovation officer wanted to put contactless chips into PDAs. We were really the pioneer in this space and got some of the earliest patents for what was to later be called NFC.

At the same time, Philips(PHG_) was working with Nokia on what they called "proximity services." They later coined the term NFC in 2002. We were among the earliest members of the NFC Forum with the company that's now known as NXP Semiconductor [then still part of Philips].

We all had this vision for where the industry was heading with payments, but we had to wait for the world to catch up with us. After leaving Inside Secure and being one of the venture capitalists in it, I rejoined the company as CEO a few years ago to help us get back some of the momentum we lost to NXP.


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