Gemplus delivers technology for simple and fast payments

Luxembourg and Cartes, Paris, 2 November, 2004–Gemplus International S.A. (Euronext: LU0121706294 – GEM and NASDAQ: GEMP), the world’s leading provider of smart card solutions, today announced that it has delivered its first MasterCard® OneSMART™ PayPass™ cards for both contact and contactless payment transactions to MasterCard International. Both companies have recently signed the PayPass™ license agreement for the development of dual-solution EMV smart cards, which MasterCard will demonstrate on its booth at Cartes 2004.

Gemplus has been instrumental in working with MasterCard to define the technical issues for compatibility with existing MasterCard readers and offers contactless card readers that conform to PayPass specifications. Gemplus is also supporting MasterCard with the deployment of PayPass solutions with contactless-only technology for the U.S. market.

Contactless smart card payment solutions are expected to drive a significant portion of the future payment market, with analysts predicting that shipments will rise from 121 million in 2003 to 516 million in 2008, as cards become a popular way to store personal data and pay for goods[1].

“The combination of contactless cards, personalization services and contactless smart card interfaces provides a strong business case for banks and retailers to build a cost effective package that helps them to differentiate their service offerings and to drive customer adoption,” said Philippe Combes, Gemplus’ Executive Vice President Operations and Financial services. “Since 1995, Gemplus has delivered more than 50 million contactless smart cards globally. Our success in implementing such products for the transportation sector puts us in a good position to help other industries migrate to contactless technology.”

“OneSMART PayPass combines the power and security of MasterCard M/Chip 4 with the speed and convenience of contactless payments,” said Pascal Dufour, vice president and head of Chip Product Management, MasterCard International. “Contactless payments are most powerful in places where speed is of the essence–such as in quick-serve restaurants, gas stations and tollways. Cardholders simply tap their PayPass-enabled card on the PayPass reader and are on their way.”

“Trials in the United States have shown us that MasterCard PayPass has the potential to replace cash with card payments. This represents a huge potential for banks and merchants, particularly as a significant proportion of cash payments are made in retail environments where convenience and speed of transaction are at a premium. OneSMART PayPass will now enable our customers in regions where EMV smart cards predominate, such as Europe, to reap the benefits offered by contactless payments,” added Dufour.

MasterCard will demonstrate its PayPass product at Cartes 2004, 2-4 November in Paris–Booth 3C1. Gemplus will demonstrate its smart contactless technology at Cartes 2004, 2-4 November in Paris–Booth 3E2.

About Gemplus

Gemplus International S.A. (Euronext: LU0121706294–GEM and NASDAQ: GEMP) is the world’s leading player in the smart card industry in both revenue and total shipments (source: Gartner-Dataquest (2004), Frost & Sullivan, Datamonitor.). It has sold over 4 billion smart cards. With security at its core, and 2400 patents produced by its innovative R&D team, Gemplus delivers a wide range of portable, personalized solutions in areas including Identity, Mobile Telecommunications, Public Telephony, Banking, Retail, Transport, Healthcare, WLAN, Pay-TV, e-government, and access control.

Gemplus’ revenue in 2003 was 749 million Euros. www.gemplus.com

About MasterCard International

MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment card brands including MasterCard