Inside is the company that enables contactless payments work inside your credit card and Mobile handsets.
With executive DNA drawn from sim card maker Gemplus, Inside designs and manufactures their “Micropass”, the silicon that goes into your “smart card” credit card and is the market leader in the segment. The twist is that they combine the silicon with a low power microprocessor enabling both read and writing 
functionality. Reflecting its French DNA, its R&D is in Aix en Provence with corporate headquarters in Boston and offices in San Francisco, Singapore and Poland. The business is split between the chips and the application development for cards.
Why are we covering a silicon slinger? Inside is leveraging its card industry position and migrating to the mobile segment. With both the financial and mobile industry waking up to the growing opportunity in mobile transactions, Inside is well positioned to claim the mantle of market leader in the mobile NFC, especially with Visa as a strategic investor and other venture backers including
In the early days of contactless payments, novelty and limited use hindered the industry’s development. Centered in Europe, the large US market lagged in the use of smart credit cards, and innovation split. Result--high costs of card processors (the chip in the credit card), suboptimal performance and a bumpy supply chain for both since neither standing alone provided enough initial scale. Through their partnership with Visa, Inside leapfrogged its competitors by improving quality, streamlining the distribution channels and improved the read range of their chip by boosting range and processing power. Their big innovation was combining the chip, the operating system and adding an application layer making the chip on a Visa or Master Card credit card act just like a mini PC. This was an innovation leap, and drove sales because of the simple integration of the “full stack.”
Capitalizing on their technical advances, they changed their approach to the market. Instead of just selling to the bank card issuers, Inside played on the pitch of the real decision makers in this value chain: the banks themselves. By establishing an educational relationship with the likes of Wells Fargo, Chase, and Citibank they set about to convince the end buyer of the layered value they brought, thus convincing the banks to spur the bank card manufacturers to include the chip in their selected card design. This deft sales strategy paid off. In 2006, 18 million contactless cards were issued in the US and Canada, 10 million of those contained the Inside chip. In 2007, 34 million were issued, and 24 million contained the Inside chip---71% market share. For 2008 Inside expects over 60 million cards will be issued with the Inside processing chip.
Why is Inside inside Mobile ?
Over the next few months, 12 mobile operators will run trials of contactless mobile payment services in Australia, France, Ireland, Korea, Malaysia, Norway, The Philippines, Singapore, Taiwan, Turkey and the U.S. as a precursor to commercial launches. The Inside MicroRead® NFC will power the critical contactless payment transactions in most of the handsets to be used in the trials under the Pay-Buy-Mobile initiative.
The trials form part of the GSM Association’s Pay-Buy-Mobile initiative, which is designed to provide a single global approach to enabling contactless payments using a mobile phone. Consumers will be able to use their handsets to quickly, easily and securely pay for goods and services in shops, restaurants and train stations. 35 mobile operators representing 1.3 billion customers are participating in the initiative.The technology implemented by INSIDE will allow the mobile operators to quickly deploy SIM-based applications, thanks to a direct link between the NFC chip and the SIM card via the standard SWP protocol.
“This is the result of several years of early investments from INSIDE Contactless, where we were able to anticipate the standards and produce the first NFC chip with a SWP interface,” said Philippe Martineau, executive vice president, NFC Business Line.
One of the characteristics of INSIDE’s MicroRead technology is the capacity to behave as a router in the phone rather than just a simple modem, establishing secure connections between different devices, and giving phone manufacturers flexibility to address various market applications and regions
Around the globe, Visa and MasterCard have mandated the contactless form for their issuers. With the increased penetration of contactless point of sale terminals and such interoperability as the Visa Mastercard initiatives moving ahead, it is expected to be a 500 million unit market by 2009. Dual interface (swipe and contactless) “open” bankcards are already prominent in the EU, UK, Turkey, Brazil, Mexico, Hong Kong, Korea and Taiwan. Over 1 billion credit cards exist in the US, with about 400 new slivers of plastic issued every year the market resembles the ATM phenomenon of the 80s, with the need of both the plastic and the reader growing slowly, steadily and inevitably. It is estimated that about 2012 dual saturation of reader and card will exist in the market, and consumer response to the power of the card, even in the US, is strong.
Inside sees the migration to mobile as a major initiative in their strategy. Given their heritage from the SIM card industry, they “get” the mobile play and plan to capitalize on the emerging mobile payments market. Imagine a mobile phone energized by an Inside chip registering via an internal mobile web interface, empowering applications such as transit location, couponing, loyalty, and even non-payments information exchange. You could walk into a Starbucks, wave your mobile and the last 5 skus could be transferred to the reader and the barista could ask simply: “Café macchiato or double espresso today Mr. Ruppert?” Pretty kewl vision, more importantly extremely plausible for that to be widely available by 2012. Not a consumer brand, but watch out for Inside.
Not a consumer brand, but watch out for INSIDE.
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