Prism (www.prism.co.za), which has its head office located in Johannesburg, was founded in 1994 following a management buy-out of certain assets of the then Linkdata. The new company, as established, had its roots in bank and retail transaction handling, with many of its key people having played an integral role in the development of southern Africa's earliest electronic banking and electronic payment transaction networks. Besides Johannesburg, Prism has regional offices in Durban, Cape Town and Springs, with its Asia-based office being located in Kuala Lumpur, Malaysia.
During 1998 Prism acquired the chip card manufacturing plant from TEMSA (Telephone Manufacturers of South Africa) and today, this locally-based personalisation, milling and embedding facility handles the production of Prism's GSM SIM cards as well as prepaid telephone cards. The Prism card plant is VISA security certified for chip embedding. Prism TranSwitch Services (PTSS), the company's transaction switching subsidiary was acquired during 1999. Through PTSS, Prism has extensive intellectual capital and broad experience in the areas of electronic funds transfer (EFT), third-party value-added services, and reconciliation and settlement processing. PTSS is now known as EasyPay.
Prism was listed on the JSE in October 1999, and in January 2001 the company acquired the Security Module Group Division of the specialist company Nanoteq, through its then owner, Comparex. This acquisition further enhanced the company's capabilities in the area of hardware cryptographic modules, extended the Prism Incognito security range and added to the company's expertise in adapting existing card payment terminals for new card types. It was also in 2001 that Prism expanded operations into the Asia Pacific region. Today, the company's Kuala Lumpur subsidiary has a local management, sales and support team, for securing and servicing the company's dollar-based business. In the 2005 Annual Company Report this business accounted for 26% of revenue. During 2003, Prism concluded a BEE deal with Gijima Technologies that resulted in the latter acquiring 25,1% of PTSS.
Prism is a world leader in SIM card technology and here it won the Department of Science and Technology's Technology Top 100 Award. With its intellectual property (IP) and other products, a significant percentage of its annual revenue is based on licensing models, and in the case of SIM cards, international SIM and chip manufacturers license Prism's technology. Using this they produce their own SIM cards based on this technology. Note that Prism, through its licensing agreements and local business, holds approximately 5% of the world market for GSM SIM cards. The first third-generation cards have now been sold and the company is hoping to achieve similar market share for these.
In terms of the banking market, offerings include smartcards, transaction security modules, servers and trusted centres, pin encryption devices, point-of-sale frameworks, applications and solutions and electronic funds transfer (EFT) across debit, credit and fleet cards. In retail, offerings include expertise in the areas of payment and prepayment protocols, transaction security modules and servers, integrated PoS payment solutions, EFT transaction processing across multiple acquirers and issuers, with full EFT reconciliation and settlement service (South Africa only), together with other options including a prepaid electricity option. For the telecommunications industry the IP extends from the SIM range to back-end application gateway servers and is underpinned by cryptographic capabilities and technologies that ensure stringent end-to-end bank-level security as required by financial institutions, global card associations and the consumer.
The Prism chip card manufacturing facility located in South Africa, incorporates the latest card milling, embedding and personalisation technology and is VISA security certified. Using this plant Prism fulfils supply agreements with operators in South Africa, Africa and the Far East. In terms of petrol and oil, Prism's IP and service offering is focused on achieving retail automation across the forecourt. Products include PoS terminals, outside payment terminals (OPT), forecourt controllers and end-to-end transaction security systems.
During 2004, Prism signed a 10 year agreement with the NYSE-listed Radiant Systems. Radiant is one of the world's largest suppliers of store technology for the food service, petroleum and convenience stores. Radiant has incorporated Prism's OPT (including the OPT 4000 Series device) into its suite of petroleum forecourt solutions. Prism has also developed OPTs to form an integral part of an advanced forecourt solution for a major Asian petroleum company.
In terms of utilities, Prism has played a pioneering role in enabling the industry to offer secure vending of prepaid electricity tokens. Through EasyPay, it has forged strong relationships with local municipalities across the country. Using EasyPay, payment transactions for more than 200 organisations, including major local authorities, traffic departments and utilities are processed. The EasyPay system was developed in 1992 to facilitate the payment of Cape Town's municipal accounts for water, electricity accounts at Pick 'n Pay outlets. The suite has been extended to include the vending of prepaid electricity for Eskom on a national basis.
The customer base of Prism is very enlightening and shows how they influence the general public. In banking, virtually every major bank is a client and the list includes ABSA, Barclays, First National Bank, Nedcor and Standard Bank. Telecoms clients include the MTN Group, Telcom and Vodacom. In retail it is Clicks, Edgars, Makro, Pick 'n Pay and Shoprite, while in petrol and oil it includes BP, Caltex and Total. In utilities, clients include Eskom and various SA local authorities, while other clients include the SA Post Office and the SABC.
In terms of card technology, Prism offers a full suite of products including second and third (USIM) generation SIM cards (of varying capacities from 16K to 256K), financial smartcards, secure access module (SAM) product range for upgrading PoS payment terminals and devices for advanced cryptographic functionality, advanced SIM and USIM cryptographic options for mobile commerce, over the air (OTA) application management, and SIM Toolkit (STK) applications and SIM browsers.
It would be impossible within the space available to cover all of Prism's hardware systems but the Incognito TSM410 is a good example. This is a secure cryptographic co-processor that offers high-performance, high security services targeted at EFT. There is a range of 410 models offering different performance levels, and each model is installed into a Windows-based server as a PCI peripheral.
The TSM410 is a tamper-resistant security module that complies with all international requirements. It is available in a number of speed variants ranging from 20 transactions per minute to more than 600. All TSM410 modules are upgradeable at the customer's premises. All keys handled by the device are encrypted and only the Storage Master Key is stored internally. All the other keys are encrypted and stored by application software that provides easy backup and disaster recovery.
In terms of financial and banking PIN Block Formats, the TM410 supports ISO-0 and ISO-3. It also supports translation from other proprietary formats including IBM and VISA. A serial port is provided for the key component entry device and a second general-purpose serial port has been installed to support smartcard readers for example.
Prism was under pressure especially in 2002 when it had a loss of some R97 million, attributed to foreign exchange losses due to the strengthening rand. Financial results were positive in the following years and the company declared its maiden dividend in August 2005. During the past year the company spent some R32 million on R&D directed towards the continued enhancement of its IP.
As of March this year there were two offers on the table to buy Prism out and de-list the company. One of these offers is certain to go through as it is at a significant premium to the share value that Prism was trading at.
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