Atmel Corporation (Nasdaq: ATML) and On Track Innovations Ltd (OTI) (Nasdaq: OTIV; Prime Standard (Frankfurt): OT5) today announced that their contactless secure microcontroller solution has been selected by MasterCard International for use in its PayPass deployments in the US.
Yesterday, OTI announced that it has entered into agreements under which it will obtain $7.4 million of new equity financing.
Funds will be raised through a sale of shares and warrants. The aggregate purchase price of the 1,471,606 ordinary shares being sold will be $7.4 million. The warrants, which will be for the purchase of 735,803 ordinary shares, will have terms of five years and exercise prices ranging from $6.50 to $$7.50 per share and an aggregate exercise price of $4.8 million.
OTI said that the funds resulting from its sale of ordinary shares and any subsequent exercise of warrants will be added to its working capital and utilized primarily to support its strategic growth, particularly in support of one or more large new projects that OTI is about to undertake for its customers.
OIT will hold an extraordinary general shareholders meeting on December 30, 2003 to approve the measures.
Regarding the deal with MasterCard, Ohad Bashan, OTI America president and CEO said that "by partnering with an industry leader like Atmel, OTI is able to provide its customers with an even wider range of contactless card technology."
MasterCard PayPass is a new and easier payment system. Consumers tap or wave their payment card on a specially equipped merchant terminal, eliminating the need to swipe a card through a reader. The companies said that their new solution is ideal for quick payment environments where speed is essential, such as quick serve restaurants, gas stations, drug stores, supermarkets and movie theatres.
The system uses a secure contactless microprocessor chip and an antenna. The chip, an eight bit secure microcontroller, is currently used for a variety of banking applications. Atmel and OTI provide the chip in both a contactless module form and in an inlay form, providing easy card embedding for card suppliers.
Atmel was selected to supply the secure contactless microcontroller and partnered with OTI to provide the contactless solution including the operating system, application support and inlay technology.
Atmel VP marketing Jeff Katz said that the PayPass program "may well act as the driver for the introduction of contactless payment solutions into the US payment industry, due to its ease of implementation and compatibility with existing infrastructures."
Published by Globes [online] - www.globes.co.il - on December 10, 2003