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Near Field Communication and all contactless technology

For a small company, Vivotech makes a lot of noise in the contactless market.

That is not only because the press-savvy company promotes itself assiduously.

Vivotech helped enable the contactless card rollout in the U.S. by supplying affordable readers that could plug into existing point-of-sale terminal systems and support various card schemes. The vendor easily holds the dominant share of the market for contactless-payment readers in the United States. All told, Vivotech says it has shipped more than 800,000 readers to more than 30 countries, with about three quarters of them in the United States.

Vivotech in late June 2011 announced its series C funding round of $24 million, which includes such new investors as Motorola Solutions Venture Capital and SingTel Innov8, plus more money from current investors, such as Alloy Ventures, Citi Ventures, Draper Fisher Jurveston, First Data, Motorola Mobility and Nokia Growth Partners.The new round brings Vivotech’s total funding to $90 million over 10 years.

The funding will help as Vivotech continues to try to move its business away from its dependence on unprofitable and commoditizing contactless POS readers to software and services used to deliver, track and redeem mobile offers, such as coupons and loyalty, for consumers on their smartphones. Web companies, among other new market entrants, see NFC technology as a way to connect the online and offline worlds. 

Google in May 2011 named Vivotech, along with POS terminal suppliers VeriFone, Ingenico and Hypercom, as vendor partners for its planned launch of the Google Wallet in the summer of 2011. Vivotech is providing at least some of the readers to big-name retail chains Google announced is participating in its wallet launch.

The investors hope to see Vivotech capitalize on its NFC and other mobile-contactless technology, including software that provisions payment and loyalty applications over the air to mobile phones. Vivotech has also developed mobile-wallet software for NFC phones to store and display applications to users and a smart-poster management system, which can deliver coupons and other promotions when consumers tap their NFC phones on RFID tags embedded in posters.

Unlike most other companies with trusted service management, or TSM, systems, Vivotech does not intend to directly offer services to banks or others downloading and managing secure NFC applications. Instead, it wants to license the software to other companies, such as banks, merchants or payment processors, which would serve as the TSM. In early 2010, it was unclear whether processor and Vivotech investor First Data would choose Vivotech's platform for its planned TSM.

The company has been involved in some high profile NFC trials. That includes perhaps the largest trial to date in terms of handset numbers, launched in June 2009 by Citibank in Bangalore, India.

Vivotech has promoted its mobile-couponing redemption software that enables merchants to manage and redeem offers with Vivotech readers using either NFC phones or contactless stickers consumers can attach to their handsets. Retail-loyalty companies Tetherball in the U.S., and Ireland-based Zapa Technology, are using the products with stickers, though Tetherball says it is only licensing the right to use Vivotech contactless payment readers for its loyalty program.

But these sticker projects are either trials or very small rollouts. As with the NFC trials, they deliver only limited licensing or other revenue to Vivotech. The company declines to release its financials, but the 10-year-old company hopes to turn a profit by 2012 and will consider an initial public offering.