NXT-ID expects to profit from digital wallet

digitalwallet

Biometric security company NXT-ID is expecting to turn profitable next year as the company challenges Apple Pay with its own $150 digital wallet.

With recent massive data breaches eroding trust in mobile and Web payments, Chief Executive Gino Pereira told Reuters┬áthat NXT-ID expected rapid adoption of its “Wocket” passcode- and voice-protected wallet.

“Even if you take a small percentage of credit cards holders (in the United States) and multiply it by $150 you will see there is a multi-billion-dollar market that is available to us,” he said.

NXT-ID has raised an undisclosed sum to ramp up production of the Wocket. Since then its shares have nearly doubled, closing at $2.77 on Friday. The Shelton, Connecticut-based company, founded in 2011, reported a loss of $1.54 million and no revenue last year.

But as Apple embraces wireless payment technology in its latest phones, tablets and smartwatches, more people are expected to start using digital payments. In response, merchants will need to upgrade their terminals to accept payment through Apple Pay.

NXT-ID’s Wocket will work on existing terminals, as the company hopes to convince merchants to use their device rather than Apple Pay due to the ease of integration with existing hardware.

The device – the size of a small calculator and with its own card inside – can┬ástore data on up to 10,000 debit, credit and loyalty cards. To make a payment at a store, a consumer has to activate a card stored in the Wocket, which will temporarily embed the data on its own re-programmable card. This card can then be swiped at stores like any other card.

Data on the Wocket card will self-delete a minute after it is swiped, said Pereira, the largest shareholder in NXT-ID with a 42.71 per cent stake.

Nearly 8 million U.S. credit card users fell victim to fraudulent use of their cards in 2012, according to the U.S. government.

Over the next two years, NXT-ID plans to add encryption and offer online protection through its digital wallet.

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