(Reuters) - Biometric security company NXT-ID Inc expects to turn profitable next year, Chief Executive Gino Pereira said, as the company rolls out a $150 (92.3 pounds) digital wallet as an alternative to new payment services such as Apple Pay.
With recent massive data breaches eroding trust in mobile and Web payments, Pereira said 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 in an interview on Sept. 23.
NXT-ID had said the previous day that it had 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.
Apple Inc’s embrace of wireless payment technology in its latest phones, tablets and smartwatches is expected to spur greater acceptance of digital payments.
Merchants, however, will need to upgrade their terminals to accept payment through Apple Pay.
NXT-ID’s Wocket will work on existing terminals.
The device - the size of a small calculator and with its own card inside - can store data on up to 10,000 debit, credit and loyalty cards. It has a six-month battery life.
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 percent 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. (1.usa.gov/1ixlImY)
Over the next two years, NXT-ID plans to add encryption and offer online protection through its digital wallet.
SoundView Research analyst Kris Tuttle estimated NXT-ID will sell about 40,000 digital wallets next year, rising to about 120,000 in 2016 and 600,000 in 2018.
Tuttle said in a note on Friday that he expected NXT-ID to earn a net $9 million on revenue of $102.1 million in 2018.
NXT-ID said the same day that full-scale production of the Wocket would begin in early 2015 after a slight delay.
The company on Monday named Vincent Miceli as its chief financial officer - a position Pereira held along with his CEO role.
Reporting by Abhirup Roy in Bangalore; Editing by Ted Kerr