Zwipe AS — Investor Presentation 2021

Dec 22, 2021

Commercial breakthrough is in the cards for Zwipe

Commercial breakthrough is in the cards for Zwipe

Season's Greetings from André Løvestam, CEO of Zwipe

OSLO, NORWAY - 22 December 2021

With our eyes set on the long-awaited commercial breakthrough for Zwipe which

now seems highly likely to happen in 2022, we have spent the last four years

undergoing a transformation which has laid the foundation for Zwipe's long-term

success:

· Our organization has been significantly strengthened, and is continually

being uplifted, based on a philosophy of "a black belt in every seat."

· Our technology platform has been revolutionized to a cutting edge, third

generation, single silicon platform offering best-in-class biometric performance

at competitive cost levels.

· Our go-to-market strategy has been expanded with our "pull approach"

promoting biometric cards to partners and indirect customers including financial

institutions, as a complement to our "push approach" targeting our direct

customers, the smart card manufacturers. This move has been a game changer for

Zwipe because it has enabled us to accelerate awareness and demand for our

biometric payment offering, take control of our destiny and significantly raise

our brand equity.

· Our sales-enabling services and sales tools have been taken to a new level,

supporting our traction with issuers and seeing the birth of services like

"Zwipe Experience" (pilot and launch program), Zwipe Insights (consumer

research), and the ROI Calculator (modelling issuer-specific benefits from

converting payment cards to biometric cards) to name a few.

· Our corporate culture has been honed and is continually being reinforced to

capture the passion, innovation, collaboration, and agility that defines us as a

Winning Team.

· As a result of all this, and outstanding execution from our cross-functional

teams, our global ecosystem of customers and partners has continued to grow

quickly, with new partners being added in all parts of the payments value chain.

· Our shareholder base and funding situation have both been significantly

strengthened, meaning that Zwipe is funded through commercial launches in 2022

and beyond based on the current business plan and market assumptions.

· And only last month, Zwipe made its first move into adjacent markets,

starting with Access Control, fully leveraging Zwipe's investments in an

advanced biometric authentication technology platform which has been developed

to meet the highest demands for security, scalable industrialization and mass

-volume deployment.

Each step on this journey, and each new partner and customer in our ecosystem,

contributes to increasing the value creation potential and reducing the risk for

Zwipe and its stakeholders. We have indeed come a long way in that regard.

A transformative year

Even on this backdrop, 2021 has been a transformative year for Zwipe:

· We have announced engagements with eight new smart card manufacturers and

card personalization bureaus, representing an annual volume of more than 200m

payment cards. We also extended and expanded our partnership with TAG Systems,

who delivers an additional 100+ million payment cards per annum.

· We have received commercial orders for complete Zwipe Pay ONE deliveries

worth more than NOK 20m, to be delivered primarily in 2022.

· At the same time, we have so far announced commitments for pilots with eight

new issuers, including a global Tier-1 bank which will pilot Zwipe Pay ONE in

three European markets.

· We have entered go-to-market partnerships with many payment processors,

notably FSS, HPS/ICPS, Network International (NI), Middle East Payment Services

(MEPS), NymCard, Que Processing Services (QPS), Credit Card Management (CCM)

and, most recently, a US company which is one of the world's largest providers

of payment services. All these partners enable us to leverage their long-term,

trust-based relationships with hundreds of banks worldwide to further accelerate

the deployment of biometric payment cards built on our platform. I often refer

to this as "the Megaphone Effect" that is a fundamental part of our strategy.

· Building on years of deep expertise in biometric authentication, we launched

"Zwipe Access" cards to deliver next generation access control based on

biometrics. At the same time, we announced collaborations with several leading

companies in the security industry; notably HID Global, LeGrand, and Southco.

This coalition will bring a highly advanced, cost-effective biometric

authentication solution to market, fully capable of working with existing access

control infrastructure. The global access control market is valued at USD 7.65

billion and is expected to reach USD 11.7 billion by 2026 (1). While broadening

our footprint and reducing our dependency on only one product and market, this

strategic move opens many attractive growth opportunities within a range of

industries in need of added security for their premises and IT systems.

· We demonstrated further technology leadership by announcing a number of

enrolment solutions that include the key development of a commercially viable

mobile phone-based enrolment capability. We have added this and continue to

extend our list of inventions and patents that differentiates Zwipe from our

competitors.

· Our newly developed ROI calculator, developed together with recognized

external industry experts, demonstrates the financial value of Zwipe Pay ONE to

issuers and shows that, even without a card fee paid by the cardholder, Zwipe

Pay ONE can deliver a $15m annual net benefit for an average US issuer with a 1

million credit card portfolio.

· We also raised NOK 104 million in a private placement directed towards one

of the Nordic's most respected investors.

Adding to our confidence in our future outlook is the universal evidence from

numerous consumer surveys from diverse markets around the world that cardholders

worldwide will benefit greatly from the touch-less and PIN-free experience with

world-class security that is made possible by biometric payment and access

control cards. Consumers' strong trust in and demand for biometrics has been

consistent with the findings from our industry peers and other analyst reports.

We also demonstrated Zwipe Pay ONE sample cards from several of our clients,

showcased all the Zwipe Pay ONE components, and demonstrated live transactions

with Zwipe Pay ONE enabled biometric cards, along with a range of innovative

enrolment solutions, at TRUSTECH 2021 in Paris.

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Figure 1: Zwipe Pay ONE based cards from Masria Digital Payments (Egypt). KL Hi

-Tech (India), Tag Systems (Andorra), Toppan Forms (Hong Kong), Inkript

(Lebanon) and Beautiful Cards Corporation (Taiwan).

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Figure 2: Left-hand photos are the front and back of a transparent demo card

based on Zwipe Pay ONE. Middle photos are the ZPO passive inlay and the ZPO

enrolment sleeve, while the right-hand photos are ZPO module on reel (contact

plate with single silicon secure element mounted on the back) and the IDX3405

sensor on 35mm tape.

Closing in on pilots and certification

Like most other companies engaged in multinational development projects, Zwipe

has felt the effects of COVID-19 through added complexity, extended lead times

and delays. I have been impressed by the grit and determination of my team and

our technology partners, systematically overcoming the hurdles as they come.

Having said that, we have made good progress with many issuers that signed up

for pilots through 2021. This ranges from running internal tests of biometric

cards at issuers to helping their engagements with schemes and supporting them

with guidance in preparing the issuing backend to process biometric payments.

And feedback from customers has been great; "Paying has been super easy and

fast". That's exactly what you want to hear from the field!

Next milestone is the submission of Zwipe Pay ONE based reference cards for

certification by both VISA and Mastercard. Zwipe's technology partner, Idemia,

announced in November 2021, that it had obtained full certification from both

schemes for its F.CODE biometric payment card. These certifications (Letters of

Approval) represent full validation of the core components in our Zwipe Pay ONE

platform, notably the shared single silicon biometric secure element, where

Idemia and Zwipe have co-invested since 2019, and the IDX3405 fingerprint sensor

from Idex Biometrics.

The Zwipers

Last, and most importantly, I want to express my deep gratitude to the

exceptional Team of Zwipers around the world whose passion and grit continued to

create so much value for our customers, partners, and shareholders through this

challenging pandemic which has taken its toll on everyone. The purpose of our

efforts is to give everyone the power of access by being themselves no matter

where they are or who they are.

My sincere thanks also go out to all our customers, partners, and shareholders

for sharing our mission and supporting our journey.

I wish each one of you all a Merry Christmas and a Happy, Healthy and Prosperous

New Year!

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