Hello, everyone, and welcome to the IDEX Biometrics Q3 quarterly presentation. This is Vince Graziani, IDEX CEO. I'd like to start out by thanking everybody who's tuning in, and I will say 2022 has been so far the most fun year since I took on the CEO position at IDEX back in 2020. It's nice to be here. I'm in Oslo again this week, and this is my fourth visit to Oslo this year, so I wasn't able to travel due to COVID restrictions until earlier this year. Now, I've been here four times, and it's nice that I've been able to meet so many investors and supporters of the company in person. So thanks again, everyone, for tuning in.
Before I get into the quarterly presentation, it's important to recognize the usual disclaimers that our presentation has some forward-looking statements and has some degree of uncertainties. Take a note of the typical disclaimers there as well. Let's review, first of all, the IDEX solution strategy. I think that everybody knows what we're going after is the multi-billion unit market for smart cards. IDEX, in particular, is addressing contactless smart cards. There's about two million—I mean, 2 billion cards every year right now for contactless payment and then other applications for such as authentication and crypto wallets, and those markets are growing rapidly as well. Our IDEX solution is we have the full sensor technology solution, including the algorithms for biometric matching, et cetera. That's our core technology.
We have our card operating system, and then we have full turnkey solutions for payment and digital authentication and more of that to come. We'll talk about that more as we go through the presentation. Where is IDEX sort of on our company journey? There's two analogies I can think of that come to mind when I think about the path that IDEX has been on in the last several years. The first one is the personal computer market. Way back in the early 1980s, Intel developed a very powerful microprocessor, and the vision at Intel was, hey, with this technology, people can have a computer at home that is the same power as a big mainframe computer from IBM or Digital Equipment Corporation at that time.
Quite a vision, quite bold, but it took a lot of work to get there. If you think about that, it's a core technology, but you have to have enabling technology to bring it to the masses. The personal computer for first launch as a hardware platform, it grew slowly, but then when Windows operating system came out and you had an easy-to-use operating system platform where other developers could add applications, that's when the PC really took off. Having that standard operating system that application developers can develop to really enabled that market to take off in a big way. It's similar on the smartphone. My first smartphone was a BlackBerry. Most of the younger kids don't even remember what a BlackBerry was probably.
The big flaw with BlackBerry is they never had a standard operating system that developers could develop useful apps to those operating systems. When Android and Apple iOS came to market with standard applications and standard operating systems and standard interfaces, all sorts of developers were able to develop apps and add value to that standard platform, and that's when the platforms really took off in a big way. Now people consider a smartphone as a must-have item. In a very similar way, IDEX has taken that journey for the biometric smart card. We built our hardware platform, giving us the best performance in the industry in terms of pure biometric matching.
We've now added our own card operating system that's based on an industry-standard Java Card OS, and we have standard applications interfaces, so applications can be developed on top, whether it's your standard payment app or apps for authentication or apps for crypto wallets and other blockchain and Web3 applications that we haven't even thought of yet. Having that core platform and then a standard operating system interface is really the stage where we're at now and enable the market to really take off to scale. The stakeholder benefits for biometric cards is pretty clear. For the cardholder, it's a tap-and-go transaction, just like you're doing with your standard smart cards today that are contactless. You tap a POS terminal, you match the biometrics in under a half a second and go on your way.
Full peace of mind, improved security, and your privacy is protected because your biometric fingerprint is digitized and stored only on the card. You don't need to worry about your fingerprint biometrics being stored off in the cloud somewhere and being subject to a data breach. Issuing banks have big benefits from biometric cards. The money they save on fraud reduction practically pays for the card itself, and then customer satisfaction and the competitive angle of being the top of wallet effect or offering this technology to pull new customers in. We're seeing some of the digital banks are offering that technology, and it's drawing in new customers for them. For merchants, obvious benefits, it's a seamless acceptance at every POS terminal out there, lower friction at the checkout and fewer declines if it's a biometric match.
No reason to decline transactions that are legitimate and fewer chargebacks. The acquiring banks that provide services to the merchants. They also have more services they can offer improved checkout experience and enhanced authentication. There's value for everybody all along the value chain. Consumers actually want these cards. I frequently take out one of the IDEX cards, our demo cards, when I'm sitting on planes or if I meet people at parties and events, and show them the biometric card, and I'm able to explain in under 30 seconds what it is we do. Everybody I meet universally says, "Why wouldn't I want that card? I absolutely want that." That matches directly with research that's been done very recently by Mastercard.
They've gone out and researched globally in various markets across the world to see if consumers would really prefer to have a biometric card if it's available. On average, across these 14 markets, 80% of consumers say they would want that. Overall, a market update, as I mentioned earlier, our addressable market is 3 billion, more than 3 billion cards a year, more than 2 billion just for payment. It's also important to note that there are already 40 million payment locations out there that will accept these cards. All POS terminals that are contactless and accepting EMV transactions today will accept the biometric card. There's no big infrastructure uplift. There's market momentum now. Consumer demand is increasing. Increasing number of launches. We'll talk about all of this a little bit later.
We have had over the last year and a half some headwinds we've run into with the chip component shortages globally, the lockdowns in China due to COVID, and the geopolitical instability. I can say that those things are starting to loosen up. The headwinds are definitely improving, and we're gonna see that in improved market momentum for the company. What does this all mean for where IDEX is in our commercial scale is in 2021, we were getting our technology out there. Very sophisticated customers that had their own operating systems and their own engineering teams were able to bring products to market. We're very happy to have IDEMIA as our one of our first customers who had a team that was capable of doing this. Now we've optimized the solution.
We have full card operating system and applets, et cetera, so that other tier two card manufacturers don't need to have the heavy technology investment. They can get more of a turnkey solution from IDEX, including the apps and applets for payment, authentication, or crypto wallets and more applets to come. That really drives commercial scale and really drives the adoption inflection point that we expect to see in 2023 finally here. I don't wanna spend too much time talking about our products and solutions. We've done that many times in the past, and we're really on the commercial scale side of things now. For today, I'll just remind folks that we do have differentiation in our product and technology. We have the largest sensor in the fingerprint sensor industry. What does that mean?
That means we capture more data with every touch. That makes it easier to perform the biometric match and perform that with lower power and more efficiently. Also, because we capture more data, we can adjust to changing standards for security. For example, Mastercard just raised the bar on the anti-spoof technology that needs to be there, meaning your ability to resist a fake fingerprint and detect that as a fake as opposed to a real fingerprint. We're able to adjust to those improved or tougher standards because we're capturing more data with every touch, and we can adjust our algorithms to match these tougher standards. We also provide services. As we said, we're now doing turnkey.
We can provide services to banks to help them do early pilots and launches, and we'll have a full API library for developers that wanna develop future apps for our technology. Again, our evolving solution really is the base or the foundation we've built on is our biometric sensor, which includes our own custom-developed ASIC. We have a 200 MHz processor on that core sensor, which is very impressive processor technology considering these cards don't have batteries. We're running a 200 MHz processor on just the tiny amount of energy we're able to harvest through the RF of a POS terminal. On top of that foundation, we have our own biometric software, including matching algorithms and algorithms for anti-spoof.
We now have our card operating system, as I've talked about, which enables applets for different applications to be plugged in and leverage this whole core technology platform that we have. I've already hit on a lot of these points, but also just to say that, you know, we do have more than 200 patents protecting our core technology. We take a very different approach, and I think really our technology and our core R&D team are what differentiate the company. Also the fact that we have this core platform and then the operating system with various APIs allows us to address new markets. If we look back a year ago, we really weren't talking much, and nobody in the industry was talking much about digital authentication.
By just putting different apps onto our core platform and technology, we can address this digital authentication market. In 2022, we've had many customer partner design wins going after this market. The reason is clear why. It's a very lucrative high-value market. There's $172 billion spent this year just on enterprise cybersecurity. Where payment card market can be very cost sensitive, the banks and issuers want those cards to be as low cost as possible. This is an industry where one data breach can cost them billions of dollars. They're willing to pay to have the added security, and adding biometrics to authentication cards is a very robust way to add multi-factor authentication to your enterprise security and technology for access.
We're seeing a big boom in this marketplace as well. We just actually announced today, I don't know if you saw our announcements, yet another partner that's doing a digital authentication application with a biometric card, and this is a well-established player in that space already in Turkey with a great client list. It's a fantastic application for us. Another application we're seeing more and more is these digital hard wallets. That's interesting because it's following the trend of decentralization of assets in the internet. Decentralization, it sounds complex, but really what that means is just like cryptocurrencies, you can leverage blockchain technology to tokenize any asset.
Then instead of having to store assets in a central location or a central database, you can transfer and move assets about the internet with blockchain technology. If you're doing that, you need to protect those assets somehow. This is where the biometric hard wallet comes in. You can store cryptocurrency. You can have your NFT stored there. You could even, for example, tokenize IDEX Biometrics stock shares and transfer those through a crypto exchange instead of the standard stock market exchanges. You're gonna see this as a growing trend, and this is another trend that is being protected by biometrics. Why biometrics are important, not only do you lock the value in on a hardware wallet, but you don't need to remember your password or PIN.
If you store some tokenized valuable crypto-currency or NFT on a hardware wallet and put that away for a period of time, it can be a very expensive mistake if you've then forgotten your password, and there are many stories globally of people doing just that. Let's now really focus on the commercialization and rollout. Anybody that tuned in for our Capital Markets Day has seen some of this material already before, but Europe is the first market where there's broad rollouts. We're seeing that in France and other banks in Europe. 23% of the global card payments value is. It happens in Europe. This is a big market. Europe also was always a fast mover. They were the first to move on chip and PIN technology when it came out.
We anticipate continued growth here in Europe. Asia-Pacific is actually growing very quickly on the card space, and we have very strong interest with design wins from customers in Japan, Korea, Malaysia, and Vietnam and India are coming. We're seeing more and more design wins for card makers in those local geographies with their own banks and issuers behind it. There are several government ID programs as well that are in development that are enhanced by the biometric smart card application there as well. Latin America and South America is another market that's growing for cards. Contactless card growth there is still in the 36% range, and we anticipate launches coming from a large bank in Mexico and other launches also coming in South America and Brazil.
The Middle East, I think people that track IDEX saw that we just had First Abu Dhabi Bank finally launched with our partner IDEMIA, and we see strong interest there for Middle East and Africa as well from other banks and issuers, and anticipate more launches coming in the future there. Again, sort of an update from what we talked about at our Capital Markets Day in the first half of the year, and we're really talking about overall market activation here. That's really what's important. You'll notice on this slide, we even talk about some of the bank launches that were done that were using our competitor's sensor. Overall, we feel we just wanna see market momentum. In a market this size, it's fine to have two competing suppliers of the core technology.
Really, what's most important is seeing that market really take off. So far in the second half of the year now, we've had our friends in Abu Dhabi launched. By the way, that launch was compelling because it was a launch across all of their card customers, not just their premium customers. They're offering the biometric card to all of their customers. One option on the card is it's a co-branded card with one of the largest retailers also in Abu Dhabi. As part of that, they're extending their card loyalty program for this retailer to shopping outside of the store. There's a value add there for the retailer of having the biometric card as well. We're still anticipating more launches in the second half of this year.
We don't have clear visibility to the end banks and when they're gonna launch. You know, the banks are typically the customers of our customer, and the banks work on their own timeline. We know these launches are coming. None of them are canceled. Sometimes they're postponed, sometimes they're delayed, and some of them happen sooner than we expect and are pulled in. If you are paying close attention, we didn't talk about a bank in the U.K. at our Capital Markets Day just back in September, but we've now had an announcement with a bank in the U.K. We're anticipating more launches for this year. Some may trickle into early next year. Some new ones may materialize that we haven't even addressed yet here in the slides.
The key is the market is really starting to take off, and there's growing market momentum. In terms of the customer segments, and we've talked about this before, so many banks are choosing to launch first with their premium customers. We're very happy about First Abu Dhabi Bank because they're doing a company-wide launch, and we expect to see more and more of those. For a lot of the digital banks, this is a way to address a high-tech audience, so the younger professionals that want the latest technology and worry about security and identity protection. Many digital banks are going after that market as well, and we expect to see more and more there.
On the corporate side, we've had one launch with Manager.one through our partner IDEMIA, and again, this is a bank that specializes in corporate expense management, et cetera. Having the biometric card is a great way to control employees and corporate expense use of payment cards. There's a market for special needs, so people that may struggle to remember their PIN or perhaps they're blind and struggle to be able to even enter a PIN on a POS terminal. There's several applications for this that are great applications and pretty good volumes, but a great leverage of the technology to help people that maybe have some disabilities. Third quarter highlights. We already talked about the major bank in the UAE launch. That was fantastic news for us.
We did announce a Turkish bank earlier this year, and that Turkish bank is working closely with our partner E-KART to launch. We did talk about a launch with a U.K. issuer, and that U.K. issuer will be helping us generate other bank launches across Europe, so not just in the U.K. Stay tuned. More to come there. We announced a partnership with another one of the tier one secure element providers. There, again, in this industry, for it to take off, it's so big, all of the card manufacturers work with multiple semiconductor companies for secure elements, and they will work with multiple sensor providers. IDEX is really one of only two that are addressing the market today.
We are also working with all of the major secure element provider players out there, and we'll eventually have full solutions with all the majors. In digital authentication, as I said, this was a market we didn't even talk much about during my first year here. We've had multiple announcements for new products being launched using our biometrics and digital authentication applications. U.S.-based company Sentry Enterprises has launched their SentryCard based on IDEX, and this is a legacy card that's already in the market and getting very good traction. They have fantastic technology there. They're able to manufacture a card that has multiple radios in it so that it works with Bluetooth, it works with NFC, so connectivity is not an issue.
This is really a fantastic platform and we anticipate seeing others building apps that can be added on to this platform, and a great partnership there with Sentry. We announced Realtime, again, another player that's been in this space for quite some time, very expert at digital authentication and Web3 applications. Another partnership there that was announced. A company called eSignus, which is a smaller earlier stage company with fantastic expertise in digital authentication, and we're working very closely with them on a combination digital authentication device and crypto wallet. Then most recently, we just announced a partnership with TrustSEC, bringing biometric solutions and crypto wallets out.
Today we just announced again a new one, İnnova, in Turkey, also with a great client list and focused on that market space and now adding biometrics to their smart card solutions. Great traction in the market in the last quarter. Going into Q3 financials. Here it's a. Let's go through the major points here. For the first time since I've been at IDEX, our revenues were down on a quarter-to-quarter basis slightly. We talked last quarter that may happen because our manufacturer of our sensor where we do our assembly is in Shanghai, and that manufacturer was shut down for more than 12 weeks. After a shutdown like that, they also don't just ramp up again overnight. That supply chain was shut down for 12 weeks.
We managed our customer expectations and order book to make sure that we didn't leave people high and dry, but it did impact our revenues a little bit in the quarter. We did see improvement on our margins, which was anticipated. That margin improvement came mostly by product mix and some price increases we were able to pass on to customers in the market space. I should comment here as well, we anticipate margins will continue to increase, right? I've been in the semiconductor industry for over 30 years, and it's always a cyclical business, but this last two years has been an unprecedented market situation where prices not only increased, but stayed high for a very long time.
Now, what typically happens is, we're seeing the turn there, is semiconductor companies started investing two years ago to increase their capacity. At the same time, customers have been overbooking orders to make sure they get supply. As the market starts to turn, you start to see prices come down quickly. I'm not a semiconductor market analyst, but I do have a lot of experience here. We do anticipate that prices will start to recover, costs will recover, and our margins will improve as a result. The other thing we wanna note here on the financial results is that we mentioned last quarter that we started taking some actions to decrease our overall OpEx. Clearly we need to acknowledge that the market has taken longer to develop than we anticipated.
As a result, you know, we need to lower our cash burn while we're ramping up the business and growing the business. We took some actions earlier at the last quarter, and we've taken more actions in this quarter. In total, we've now taken our total spend. Our biggest number that we spend every quarter is really, like most tech companies, it's on our payroll. We've taken actions now to reduce our overall payroll by about $1 million a quarter on a run rate business, on a run rate basis as well. We've also then balanced things out. When we were a pure development company, when I arrived in 2020, we were still developing products.
Most of our expense and most of our headcount was totally focused on R&D and engineering and development. We've now re-reduced our payroll in that area by 22%, while we've done some hiring on the commercial side. Again, the total net is we're reducing our overall expense burn for payroll by about $1 million a quarter. We'll continue to take actions there as needed to make sure that we control expenses in every aspect of the company. If we go forward and talk about the operating model long term, again, we see a huge market, so there's an opportunity here for extraordinary growth when we start.
We anticipate that we're launching more and more banks, and of course, behind that orders will come, and this can ramp up very quickly. Our supply chain is very solid right now, so we can react very quickly to a ramp-up. It's been nice. We've already seen some loosening on the availability of semiconductor wafers. Our assembly and manufacturing test has plenty of supply available for us, so we can react very quickly. Long term, you know, our target operating model has not changed. We're a fabless semiconductor model. We continue to grow, and when we get to the big scale, we'll be at our 50% gross margin point again, consistent with the fabless model.
By being able to add the card operating system and applets on top, that helps us retain our margins 'cause we're adding more value for our customers. We have long-term goal of 30% operating margins, and again, we don't need to grow our company to scale. We already have the product. We have a solid commercial team, so we don't have to scale the number of heads and the size of the company to address this market. It's a very concentrated customer base, and we can grow very quickly with the company at the scale of about what we are now. Therefore, we'll scale and have sustainable positive cash flow once we really hit the volumes, and we'll continue to keep that OpEx down.
In summary, IDEX is really enabling the next generation of payment and authentication and crypto wallets and the other apps that we still anticipate to come. It's a multi-billion market, a multi-billion dollar market opportunity, multi-billion units. We have the industry-leading customer experience. We've by far the best performance in the industry right now. We have a disruptive technology solution, a very unique approach that's patented, protected, and we're really capturing the market at inflection point, and we'll see more and more of the bank announcements to back that up. With that summary, I'd like to thank everybody for tuning in, and thanks again for all your support for IDEX Biometrics.