Israel-based NFC and contactless technology vendor On Track Innovations will ship 40,000 contactless payment readers to the U.S. by the end of 2013 as part of a $10 million, three-year contract.
An unnamed purchaser, a distributor to the U.S. market has contracted to purchase OTI’s Saturn 6500 series contactless readers over the next three years, the vendor announced today. The readers, which accept contactless payments, will be used at unattended points of sale, such as self-serve Laundromats, vending machines, and pay-at-the-pump stations.
“This represents the largest single reader win for our company,” said CEO Ofer Tziperman in a statement. He said that OTI has doubled its reader shipments in 2013 compared with the previous year. OTI benefited from the demise of U.S.-based reader vendor Vivotech last year.
During the second quarter of 2013, OTI also received a 30,000-unit order for NFC and contactless payment readers, as well as a large contract for three mass transportation e-ticketing projects in Poland, over the next five to ten years.
The company has focused on NFC and contactless products and in recent months and has sold off unrelated units, such as its Smart ID Division and Parx France, a subsidiary distributor of electronic parking products. The $22.5 million sale of the Smart ID Division was expected to close this month.
The order announced today includes an EMV compliant model. The rollout of EMV point-of-sale terminals in the U.S. is proceeding more slowly than anticipated. But along with contact EMV acceptance it is expected to bring with it more contactless acceptance in the U.S., where penetration of contactless POS terminals remains low. That, in turn, could boost prospects for NFC mobile payments services, like one expected to launch later this month by the Isis joint venture.
“Payments is going to take a while; it's certainly taking a lot longer here (in the U.S.) than it is in Europe,” Miles Quitmann, managing director of UK-based Proxama, told NFC Times at a recent conference in the U.S.. “I think EMV is going to need to get sorted out before contactless payments at point-of-sale terminals in retail is going to really take off, and that could be five years.”
OTI is not only seeking to increase its contactless reader business, but to monetize its NFC patents and commercialize other NFC products. It has sued mobile carrier T-Mobile USA over NFC IP. It also recently gained certification from MasterCard Worldwide for an NFC smartphone attachment, which has attracted interest among issuers in Hong Kong.
The company reported a net loss of $2.3 million in the second quarter, improved from a $4.8 million loss during the second quarter of 2012.
But the company’s share price is still only up by a little more than 25% since the end of last year, when a group waged a successful proxy battle that led to the ousting of chairman, CEO and co-founder Oded Bashan. OTI, founded by Bashan in 1990, has never turned a profit.
Eight board directors, including some who led the takeover, have purchased a total of more than 900,000 shares to date, betting they will be able to turn the company around or at least monetize its assets.