Hello everybody, this is Vince Graziani, CEO of IDEX Biometrics. Thank you for joining our third quarter presentation, and welcome. Before I go into the details of the quarterly results, etc. I wanted to go through an overall presentation and tell the IDEX story, and update it for some of the recent achievements. For those of you that are new and even know that some of you know the company quite well, there's been quite a few achievements during 2021 that we want to talk about.
When we introduce the company, we like to say IDEX Biometrics is enabling the next generation of smart cards or payment cards for multiple applications. Those of you that are old enough will understand what we mean by that. There's been many generations. When payment cards first came out, they were just plastic cards with account numbers embossed.
Came the addition of the magstripe, which had all your account information and enabled the dawn of the ATM machines, etc. That technology was very susceptible to fraud. The banking industry and card industry introduced chip and PIN technology, which added an encryption processor to everybody's card and dramatically reduced fraud to near zero. Multiple years went by, and there was a demand in the customer base and consumer base to have more convenient forms of payment. The contactless card was introduced, where the card doesn't even need to be plugged into a reader. You can just hold it over a POS terminal. It harvests energy from the near-field communication in the terminal, powers up, gets your account information, and approves the transaction, just simple tap-and-go transaction. That was very convenient. Once again, fraud crept back into the system.
In order to protect that, banks were limiting the size of a transaction that you could do with a contactless transaction, in most cases in the range of EUR 25 or EUR 30 or similar in dollars. Now enter COVID, and there was a huge demand from the consumer that they want to be able to use contactless mode, but for any size transaction. Once again, everybody is exposed to fraud. In comes the biometric card, where you put your finger on the card, hold it over the terminal. The exact same POS terminal powers up the card. First thing it does is take your fingerprint, compare it to a fingerprint stored on the card, verify that, in fact, Vince is there, and then approve the transaction.
All this with the modern technology from IDEX can happen in about one-half of a second, full transaction with biometric validation, end-to-end, a half a second. It's really game-changing performance, and I think it's really going to drive adoption of these cards. That's what we do here at IDEX Biometrics. We're going to go into a lot of more detail on all of this here as we go through the slides. I should, first of all, just mention the normal disclaimers for any financial presentation like this and acknowledge that, for the sake of our attorneys and compliance folks, that we all took a moment to read the disclaimers. Now let's go forward. I'm having trouble moving my, oh, here we go. Back to what I talked about, the next generation of payment cards.
What are we going to talk about for the rest of this presentation? We're addressing a multibillion-dollar opportunity, and we're going to talk about how we're addressing that with our IDEX Biometrics TrustedBio solution and really a superior biometric performance at a very disruptive cost point. We're capturing the market right as it's at an inflection point. Our timing of some of those recent announcements couldn't be better to just right now, when the market's about to take off, having our biggest customer, IDEMIA, getting certified by both Mastercard and Visa, very big achievements and very well-timed. Let's talk a little bit about the management team. Here, it also reflects a little bit the story and where the company is in our history. Back in late 2017, Stan Swearingen was advising the board of directors at IDEX.
Through his experience at prior employers at both Synaptics and Atmel, Stan was aware that there was a big opportunity for biometric payment cards, very large volume opportunity. Nobody was attacking that space from a technology solution point of view. IDEX had all the right building blocks. The board of directors agreed to do a purpose-built solution all in on the payment card or biometric smart card market. The team on the lower level here of the org chart is really the technology team that came together, understand, and since late 2017, developed multiple generations of our biometric technology to arrive at our latest gen, which is our TrustedBio solution, by far the most advanced purpose-built solution in the industry. Now, the top level of this org chart reflects the newer members of the team.
I was brought in about a year and a half ago when the company was getting ready to shift into commercial mode. At that point, Stan had made it clear that he would be happy to lead the company through development mode, but he didn't want to be the CEO when commercial time came. I joined. I had first come to know the company when I was at Infineon Technologies, and I was actually part of the Infineon team that were brokering a partnership with IDEX that we've recently announced last summer. As a matter of fact, coincidentally, at the same time as I was in that process, I was approached about the CEO role at IDEX, and I had come to know the company and just thought it was too great of an opportunity. It was something I couldn't pass up. I joined.
I made a graceful transition from Infineon, and here I am. Two other recent hires on the commercial side include Catharina Eklöf. Cath has a deep background in both security and payments that is a great blend for IDEX. Catharina had worked 12 years for Mastercard in their payment cards industry. She actually launched the co-branded payment card program for Mastercard.
She was in the New York office for them for 12 years. Since that time, she's had other senior-level management roles, notably Securitas, which was doing digital security. She was heading that up. Her background in both security and in the payments and card industry is a great blend for IDEX. Cath is now in the process, and we've had some recent hires of building out a high-level executive commercial team that will help with our go-to-market. I talk more about that later.
We also brought on this year Jamie Simms as a new CFO. Jamie was at another U.S. semiconductor that was listed on the NASDAQ called Vicor, and he had been CFO there from 2008 until earlier this spring when he decided to retire. I met Jamie, and when he heard about the IDEX opportunity, he joined the team as well and felt, again, similar to me, it was an opportunity too good to pass up.
With Jamie, we wanted to bring on board a CFO that had experience with publicly traded tech companies like IDEX and at Vicor. During his tenure there, this is also a semiconductor company. They went from $5 a share on the NASDAQ to well over $100 a share. We wanted a CFO that understood how to manage a growth like that for IDEX because that's our plan here as well.
The case for biometric cards, what is it that we do here? What are the challenges, and how do we solve them? We look at challenges, and these challenges face banks and issuers. They face retailers and also challenges to consumers. All are affected by fraud. All are concerned about security and identity protection and data breaches. All want consumer convenience. Again, card economics are very important. It's one thing to add security, but if you can also show banks and issuers how to make money, then you're really giving them a value proposition.
The biometric card really solves all of these challenges. Fraud reduction is an obvious one, same fast and convenient transaction as a contactless card, but infinitely more secure. Identity protection is a big deal right now. People are worried about having their biometrics stored on the cloud. You probably heard that Facebook is no longer supporting facial recognition because of identity protection concerns. People don't want their fingerprint biometrics stored out on the cloud either because then your biometrics could be susceptible to a data breach along with other personal information.
The biometric card from IDEX and others, you enroll your fingerprint only at home or in your own privacy, and that fingerprint is encrypted and stored only on the card. Very important to understand that storing that only on the card. It's very good for identity protection. It's sitting in your wallet. It's not constantly connected to the cloud like your phone. Again, a very secure and safe environment. Simple and easy to use. You just tap and go like a contactless card today. Again, with IDEX, we enable a tap-and-go transaction in a half a second.
It's a truly seamless user experience. There's economic benefits to the banks. Consumers want to have this highly protected technology, and it differentiates banks, so they get new customer acquisition. There's also a top-of-wallet effect. All of us carry multiple cards. If one of your cards has the biometrics, it's likely to be the card you use most frequently. Direct monetization. Consumers have demonstrated that they're willing to pay for the added security and convenience of a biometric card. There are direct benefits to the banks where they can profit just from charging additional fees for the biometric cards. Let's talk about the market opportunity. As I mentioned earlier, the market opportunity for cards is just a massive opportunity. There are 5 billion new smart cards issued every year.
The vast majority of those, more than 3 billion, are for payment cards, credit and debit. IDEX is directly servicing the contactless payment card market. Contactless payment cards are now the mainstream, most often issued cards and growing rapidly. There's 1.9 billion contactless cards now issued every year, and that's growing at about an 8% growth rate per year. Biometric card penetration rate is even growing faster than contactless adoption. Biometric cards are starting to ramp up growth. We are forecasting 18% market penetration of biometric cards by 2025. This would represent an opportunity for us to address around 500 million cards. It's just a huge opportunity. There are really only two players out there addressing this opportunity today. The incumbent in place, FPC, is out there already.
With our latest certifications from Visa and Mastercard, we're out there now in full force as the second player with a superior technology. Then there's also something to note about this market. It's very defensible. When you think about markets like this, they often commoditize, and lower-cost Asian manufacturers will come in when a market is this size of an opportunity. In this market opportunity, at least here in the West, we have somewhat of a protective moat because there's almost no chance that Western banks are going to be issuing payment cards that are based on technology manufactured at low-cost Chinese semiconductor makers. We definitely have an opportunity to protect the market here as well. Where is the activation of the biometric card? We talked about this. We really think that the market is at an inflection point.
I think several of the analysts that are tracking us, including Kristian at Arctic, are also feeling that the market is hitting this inflection point. When you think about the history of new technology and payment cards, most recent new technology introduced was contactless cards. It took about 8 years for contactless cards to go from 0 to 1 billion cards per year. The main reason holding that back was when contactless cards were introduced, it required a complete upgrade of the point-of-sale infrastructure.
Every point-of-sale terminal had to be changed in order to accept contactless cards. With biometric contactless cards, we don't have that barrier for entry. We can work on the very same POS terminals that exist today. If I were to hand anybody a prepaid contactless card that was biometric, you could walk into your local Starbucks and make purchases and transactions immediately.
No barrier there. Visa and Mastercard have driven the standards and the certification processes. To ensure that the cards are secure and behave on their network with a seamless user experience. Banks and issuers are really starting to launch, and we're seeing growing momentum there. It started with BNP Paribas, was the first to offer to all their customers. We're anticipating several Swedish banks to be launching in 2022. We expect 2022 to be really the year of the launch where we're expecting a solid double-digit number of banks launching globally. The Visa and Mastercard certifications this week will really just help accelerate that because that is the key to unlock being able to the card manufacturers to go to banks and assure them this card is ready for prime time.
The other major opportunity that could actually double our served market is this digital currency initiative in China. IDEX has been working for more than a year and a half with several other card manufacturers in China who are targeting this digital currency initiative. Until recently, a lot of this was all done under NDA. Now word of this overall digital currency initiative in China is really out there in the open. I think most people now know that China wants to be the first major economy globally to have an all-digital currency, the e-RMB or e-CNY initiative. When you think about that, there are some repercussions. If you're going to go all digital, you need to find a way to bring all people into the banking system who currently are using cash.
In China, that means there's over 400 million people who today are either living just on cash and don't have banking accounts or just have no access to a smartphone. A lot of the very earliest trials on this digital currency in China were done with smartphone applications. Those will continue to exist, but they need a payment method for the rest of the population. Even people with smartphones will want to have an alternative payment method. Enter the hardware wallet, which is basically for those of us in the West, we would see this and it would look very much like a payment card. The difference is that you can actually store digital currency on this card. Many of the early trials, it was a card that was just a standard payment card.
The difference is the software enabled the storing of the e-RMB, the digital RMB on the card. To entice people to carry the card and use it and make it standard, many of the banks were running multiple-use cards. This card that's demonstrated here with Postal Savings Bank of China was not only a digital hardware wallet, but was also being able to use for access to the Chinese healthcare system. It became your Chinese healthcare card as well. When you think about the idea of actually storing currency on the card, then you can quickly understand why it's important to protect that currency with fingerprint biometrics. If the cards were lost or stolen and there's actual active currency on the card, then somebody could pick up that card and spend that cash right away.
Therefore, with the biometrics, only the owner of that currency has access. IDEX has already partnered with all of the major banks, the six regional banks in China through our card-making partners in China. We've announced two trials so far. We expect more to come. The biggest trial will be coming up at the Winter Olympics 2022. Again, this is a big upside opportunity that really can leverage all of the technology that was purpose-built for this card environment into a new and very large market opportunity for IDEX. Beyond that, when you think about the digital currency opportunity, you also can think about other opportunities for the card. At IDEX, we aim to enable all of these. In many cases, it will just be new apps on your same card.
You might have a card that is a debit card and a credit card that runs on the Visa or Mastercard brand. You could also have the ability to add new apps to that card that says, "Okay, I want to add crypto keys to protect my digital currency wallet on my smartphone." Many of you may have heard of the recent hacks people experienced here in the U.S. on their Coinbase accounts. Folks that had digital currency accounts with Coinbase could access and control those accounts via apps on their smartphone. Hackers were able to penetrate the security walls on the smartphone via implanting malware via text message. Several Coinbase accounts were totally drained of their funds. Now there's a growing awareness that maybe the phone isn't smart and isn't secure enough.
If your phone is always connected to the cloud and always on, we might need an auxiliary security device to protect that. Again, your biometric card can serve that purpose. You can have an app on your card that stores crypto keys. If you do a transaction on your Bitcoin app on your phone, you can then tap your card as the last step, last added security to say, "Yes, that's Vince present because that's his fingerprint, and he is tapping that card against the phone. I can therefore transfer these funds. It's not some nefarious hacker." We're seeing emerging companies going after those applications. In many cases, as I said, it will be just the same card you already have and be able to add some more value to that card by adding new apps.
There's a broad applications there. We have one partner in China who is doing a payment card that's also going to be used to access the public transport system there. If you think about the way it works today in the public transport, you have to show an ID and a ticket. With the card, you can have your fingerprint as your ID and the ticket stored electronically on the card. You can just tap and go and move right through a turnstile. You can imagine multiple use cases for the same card. Those will all just drive up value and drive volumes on the biometric cards. The IDEX competitive advantage. For those of you that know our story, you know we've talked about this a lot.
We're the only company that looked at the payment card and said, "We're going to do a solution that is optimized for that from the ground up." What we have come up with is our TrustedBio architecture, which is a very disruptive technology. We'll talk about the details of that. It drives a disruptive cost point. We have performance leadership. Again, full transaction end-to-end, including biometric match in half a second. We have versatile enrollment options, which we can offer to the banks and issuers. A flexible and comprehensive solution where we can add apps to that to address other opportunities as well. We'll talk about that differentiation here a little bit in detail. When you think about the incumbent technologies, most of the players in fingerprint biometrics were doing fingerprints for the mobile phone space.
That is a space that was a great value, grew rapidly. The base technology was to use a CMOS image sensor as the fingerprint sensor. When you think about that, now your silicon CMOS sensor has to be of a certain size because the size of the human finger is what determines the size of the sensor. If you've ever invested in semiconductor before, many of you probably are Nordic Semi investors or invested in other semiconductor companies. The name of the game in semiconductor is to shrink the die size. That lowers the cost. You follow the trend of ever-shrinking process nodes in the semiconductor industry and lower your cost. In the fingerprint world, you can't do that because you can only shrink the sensor so small before you're not capturing enough fingerprint to get a match.
At IDEX, our team of technologists said, "We have to break that paradigm. That's really how you optimize for the card." We came up with a way to build the sensor in a much lower-cost way. We build a capacitive sensor, which is essentially a wire mesh that is bonded down to a printed circuit board technology and then covered with a polymer plastic. By taking that approach, we can make the sensor itself in a very, very low-cost way. It's very much the same way that a standard multi-chip module is manufactured today in high volumes. Once we take that approach, then we can build our own ASIC to manage the whole biometric processes and transaction.
Our TrustedBio ASIC takes advantage of 40-nanometer mixed signal technology from TSMC. We are then able to integrate a microcontroller, microprocessor unit for the biometric matching. We integrate the power management unit. We also integrate some specialized hardware that accelerates our matching algorithm. This is how we get that very high performance. Even with all of that integration, because we're able to use an advanced technology node, we do that in a very tiny 9 sq mm die, which really helps drive the cost down.
We just mount that die on the backside of our sensor in our module. What ends up happening there, what that turns into is an all-passive inlay for card manufacturers, which has much better yield, much easier, and lower-cost manufacturing. There's only two active components, the IDEX sensor and the secure element device on the back of the contact plate. With other solutions, you have to have multiple active components. The manufacturing becomes more complex. The yields go down and the overall card costs go up.
With IDEX, we're really hitting a price point that can really enable the market. Let's talk a little bit more about our Infineon partnership. Together with Infineon, we partnered to put out a complete solution that has industry-leading performance. If you've read any of the announcements, we have done a full integration of our technology with Infineon's latest generation SLC38 device. What we've come up with and been able to demonstrate for many customers now is a fully integrated solution that enables low cost, rapid time to market, and biometric processing times and total transaction times that are leading in the industry. We're the only ones that have been able to demonstrate for customers live that you can do a full transaction, including biometric match, in about a half a second. That's really game-changing performance.
For the consumer, that means it's truly a seamless transaction. We still exceed all of the false rejection rates and other biometric performance metrics, which was actually recently demonstrated by our Mastercard and Visa certifications as well. Also, from a go-to-market standpoint, it's worth noting Infineon is the market share leader globally for secure element devices. We're happy to have them as a partner. Which leads into this, it's a good overview of our overall go-to-market strategy and sales strategy. At IDEX, we work across the whole payments value chain.
We don't take the approach that, "Oh, we're a component technology, so we will just sell to the card makers." What we are is an enabling technology, and we need to educate the whole ecosystem on biometric cards and the benefits and show all the players in the ecosystem how they can make money, what's the benefit to them with biometric cards. Our commercial team works together with our partners on the technology side, Infineon and other secure element partners like Tongxin. We directly call on card makers. Then once the card manufacturers are using our technology, they also become partners. We work very closely with them. Together, we call on banks and issuers and personal bureaus and processors to create demand.
We may be out on sales calls at a very high level, calling directly on banks, educating them on the benefits of biometric cards. Once the bank decides they really want to do a pilot, then we can bring them together with one of our other partners on the card-making side, so an IDEMIA or one of the other card makers or our partner Zwipe. We can fulfill the demand from the banks through multiple partnerships. This is a benefit to us in multiple ways. We don't have to build out a large go-to-market organization. We get a lot of leverage because the partners we're working with already have large market shares and are established players in the industry. Through our partnerships, we're actually addressing well over 70% of the total card market end-to-end in the value chain.
It's very valuable to us to work through these partnerships. You'll see more announcements coming on other partners as well as we expand this going forward. Now let's talk about 2021. It really has been an exciting and pivotal year for commercialization for IDEX. Many of you that know the story have been waiting to see this for some time, and now it feels like everything is happening at once. Our partner IDEMIA is gaining significant market traction out there. They have the best in the industry solution today. They're building order backlog with their customers. They're signing on multiple banks per month for new trials, etc. As a result, they placed a large order onto IDEX just this morning, we announced. That was in addition to other large production orders we already had on the books from IDEMIA.
Things are really at that tipping point, and we're really starting to go commercial together with IDEMIA. Largely, a lot of that was driven by the recent Visa and Mastercard certifications. I really want to take a moment to note how important these certifications are. Each one of them individually is very important. Because we coincidentally announced them on the same day, I think it's easy for the investor to perhaps jump to the conclusion that that's all one achievement, when in fact, that's not the case. Excuse me. Apologies. Both Visa and Mastercard have their own rigorous certification processes. They run very independently. They have their own specs. They're very rigorous. Achieving a Visa certification is a major accomplishment by itself. Or a Mastercard certification is a major accomplishment by itself.
It was only a coincidence that both happened to come in right at the same time. Therefore, we announced them at the same day. Both of these certifications really give IDEMIA the green light and tell the banks that this technology is really ready to go to market. Banks and issuers should be announcing shortly behind there. Our partner IDEMIA has been working in the background with many banks and issuers to get them signed up. We're hoping to see many announcements coming forward and many over the year in 2022. As I mentioned earlier, our partnership with Infineon is very important to us. As the leading supplier of secure element chips, we work together with them directly calling on customers as well. Not only is this a big technology partnership, but we are jointly calling on customers.
It's also a very beneficial commercial partnership for us. It was important enough for Infineon that their CEO, Reinhard Ploss, actually mentioned the IDEX partnership with Infineon as a highlight in his second quarter results conference call. I'm taking a moment here to mention it as well and return the favor and say thank you to Dr. Ploss for giving us the plug in your last quarter results mention. Further, we're continuing to make progress in unlocking the potential of this digital currency initiative in China. Those that track the company have seen many announcements from us for hardware wallets with partners there. We expect to be announcing more bank trials. Stay tuned. That opportunity will continue to grow. I view the 2022 Olympics as a very large trial.
There's anticipation, and you can read articles that shortly thereafter, the digital currency will really roll out more in the mainstream in China. That's a big opportunity that will be growing through 2022. On the technology front, we continue to announce new products and technology. Our TrustedBio Max is really the most advanced solution in the industry and keeping us ahead of the competition. It really has been a big pivotal year for IDEX. For me personally, I've been waiting for this to happen, and it seems like everything is happening at once now.
Financials. Let's talk a little bit about Q3 results. Basically, everything was as expected. On the revenue line, we grew slightly from the prior quarter. We're growing as a percentage, the amount of shipments into the payment space. We're continuing to ship into our lead customer for data access. As I mentioned earlier, we're going to leverage this overall card application in other cybersecurity and data access type applications. Expenses were under control.
Right now, the change in expenses, we're just reflecting the organization's pivot over to sales and marketing. We're starting to see a little bit of travel happening again. I was happy to be able to come to Europe for the first time about a month ago and looking forward to traveling again more regularly. Our R&D expenses are still focused and remain focused. Probably as an overall percentage, we intended to reduce the spend on R&D. We now have a product and a technology that's a leader in the market. We just need to keep our foot on the gas there and come out with innovations to stay ahead of the competition.
We don't need to go into that heavy development mode as we were leading up from late 2017 till now. We've reduced our reliance on third-party services that will definitely help on the expense line. We're expecting SG&A to decline as a percentage of sales as sales grow. As I said, we don't need to grow a big sales organization. We have a very concentrated customer base, and we have go-to-market partners that will help us there.
The cash balance was about NOK 13 million at the end of the quarter as opposed to about NOK 20 million at the end of the last quarter. To remind people on our operating model, we're a fabless semiconductor model, so very similar to Nordic Semiconductor, NVIDIA, Broadcom, another one that comes to mind. We don't need a lot of cash for capital expenses.
We outsource all our manufacturing for semiconductor to TSMC. All our assembly and test is done by the largest assembly and test company for the semiconductor industry globally, Amkor. Our CapEx lines are very low. We anticipate, which is very traditional in this space, 50%+ gross margins and 30% operating margins. Delivering software and apps as part of our solution is really going to help us even add value and increase those margins. That's a page out of the playbook of people like NVIDIA and Broadcom as well. In summary, we have a massive addressable market opportunity in payment cards, digital currency, cybersecurity, and other adjacent markets. It seems like every day there's just a new market opportunity for us to address.
We have the best solution, best biometric performance that's really enabling that seamless user experience, which we think will cause the industry to really hit the tipping point. We have a disruptive system cost and enable people to get cards out there at a cost point where the business case makes real sense.
There's a way to really profit off of this. We're really capturing the market right now at its inflection point. It's a big year. It's a big time for IDEX, and we're really excited to see what comes next. Thank you very much. At this point, I will pause and thank you. I was thinking we might be doing Q&A, but I think in this format, we weren't set up for Q&A. Thank you very much for attending. Look forward to addressing everybody next quarter as well. More news to come.