Gemplus delivers world's first new generation of MasterCard payment smart cards

Gemplus continues to drive EMV Migration around the globe, delivering the world's first EMV smart cards compliant with MasterCard M/Chip™ 4 standard to one of the leading retail banks in Russia.

Luxemburg and Moscow, 17 May 2004 - Gemplus International S.A. (Euronext: LU0121706294 - GEM and NASDAQ: GEMP), the world's leading provider of smart card solutions, announces that the company has delivered the new generation of MasterCard payment smart cards to a leading retail bank in Russia, Russian Standard Bank.

This was the first worldwide delivery of MasterCard M/Chip™ version 4 (M/Chip 4(1)), a highly flexible smart card application for credit and debit cards. The new smart cards were delivered in association with long term partners like IVK Systems, which provided the personalization solution and TietoEnator, which provided the host system.

Added value for customers

Russian Standard will be able to add value for existing customers and attract new business by building extra applications onto these payment cards. These new cards will handle point of sale debit or credit, as well as pre-authorized debit payments, which enable secure offline debit transactions.

With the new Gemplus GemShare (M/Chip™ 4) smart cards, Gemplus has significantly invested in these new MasterCard specifications, enabling Russian banks to migrate to the international EMV(2) standard, which provide worldwide interoperability.

The delivered solution consists of M/Chip™ 4 compliant smart cards, and the complete personalization, including data preparation, key management system and electrical personalization.

"Thanks to the unique expertise and experience of Gemplus and IVK Systems in the EMV smart card technology, it was possible to issue these new cards very fast", says Sergei IVANOV, Vice-President of Russian Standard Bank." We are proud to be the world's first bank to issue the new generation of MasterCard payment card - a cost effective solution, which provides worldwide interoperability and can be extended by various different applications."

"We are pleased to work with a leading retail bank in the Russian banking market and to be the first company to deliver smart cards that comply with MasterCard M/Chip™ 4 specifications", says Stéphane PAOLI, Gemplus Manager for Financial Services Business Unit in CIS & Mongolia. "This first delivery confirms Gemplus' commitment to the Russian smart card market and is a great signal for Gemplus with clients and Partners in our territories."

"We are glad to announce that works on implementation of new EMV-compliant cards have been successfully completed. We feel we must point to the excellent information support from Gemplus we have been enjoying, the mutual understanding and cooperation we have been experiencing when working with Tieto Enator, and creative and business-professional approach of the customer, one of the largest Russian banks, Russian Standard. Thanks to these positive factors, the aim of improving payment smart-card technologies has been achieved on the highest possible level! All in all -cards from Gemplus together with DataCard personalization technology and a software developed by Tieto Enator and IVK Systems- is a solid foundation for progressive EMV-migration in a modern retail banking institution", says Yury TOVB, IVK Systems' Managing Director.

Editors Notes:

1) Mastercard M/ChipTM 4 is the most recent specification for debit and credit applications for smart cards set by MasterCard. This new version contains a range of features designed to tackle many of the industry's most pressing needs and takes full advantage of the benefits brought by EMV 2000. 
2) EMV: Smart card standard created in 1996 by Europay, MasterCard and Visa, guaranteeing worldwide interoperability and security for debit and credit smart cards.

About Gemplus 

Gemplus International S.A.(Euronext: LU0121706294 - GEM and NASDAQ: GEMP) is the world's leading player in the smart card industry in both revenue and total shipments (source 2002: Gartner Dataquest, Frost & Sullivan, Datamonitor.) It has the largest R&D team, unrivalled experience, and an outstanding track record of technological innovation.

Gemplus offers an exceptional range of portable, personalized solutions that bring security and convenience to people's lives. These include Mobile Telecommunications, Public Telephony, Banking, Retail, Transport, Identity, WLAN, Pay-TV, e-government, access control, and a wealth of other applications.

Gemplus' revenue in 2003 was 749 million Euros.

www.gemplus.com

About Russian Standard Bank 

Russian Standard Bank is a dynamically developing independent financial institution of high degree of reliability offering world-level services, oriented at the maximally broad clients range. Realization of the clearly-aimed business-strategy, high quality of banking products and implemented technologies allowed Russian Standard Bank to in short terms creating a new for Russia market of consumer lending and becoming its leader. 

Currently the Bank occupies the first place among private banks of the country in terms of population's financing volumes and owns unique experience in forming clients' credit history using the scoring-system. For 4 years of operating of the Russian Standard Bank's retail financing program more than 2 million people became the Bank's clients. The sum of the issued credits exceeds 840 million USD. 

By the end of 2003 the Bank realized its credit programs for population in 14 regions of the country: the Bank's representations are opened in Moscow, Saint-Petersburg, Kazan, Volgograd, Ekaterinburg, Novosibirsk, Omsk, Samara, Cheljabinsk, Rostov-on-Don, Barnaul, Ufa, Perm and Nizhni Novgorod. The program of the regional development of the Russian Standard Bank's business has being realized since 2001. 

Lending through the Bank's credit cards was actively developed in 2003: by January 1, 2004 the Bank issued more than 460 thousand credit cards, having increased the volume of emission in 3.5 times in comparison with the analogous period of 2002. The volume of means attracted on card accounts as of January 01, 2004 made 114 million rubles vs. 35 million of the previous year.

About IVK Systems 

IVK Systems is a VAR of Gemplus in Russia and the exclusive distributor of DataCard in Russia and some countries of CIS. At present, almost all EMV cards in Russia are personalized by means of DataCard personalization equipment distributed and technically supported by IVK Systems. Among the company's main activities is developing software for versatile IT-applications including those for payment and ID card systems: IVK Systems has successfully created a full personalization software solution for EMV cards (including data preparation process, control and management of personalization process and data input on the entire range of DataCard personalization devices, card applications testing and support of crypto-devices). This solution - either entirely or partially - is used for EMV cards personalization in Russia in more than 85% cases.

About TietoEnator 

TietoEnator is one of the leading architects in building a more efficient information society and the largest IT services company in the Nordic countries. TietoEnator specializes in consulting, developing and hosting its customers' business operations in the digital economy. The Group's services are based on a combination of deep industry-specific expertise and latest information technology. TietoEnator has close to 14,000 experts in more than 20 countries. 
www.tietoenator.com 

For more information, contact:

Christian Heizmann
Gemplus PR
Tel: +49 (0)89 96116 - 535
E-Mail: Christian.Heizmann@gemplus.com

©2004 Gemplus. All rights reserved. Gemplus, the Gemplus logo, are trademarks and service marks of Gemplus S.A. and are registered in certain countries. All other trademarks and service marks, whether registered or not in specific countries, are the property of their respective owners.

Some of the statements contained in this release constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance, or achievements expressed or implied by such forward-looking statements. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this release include, but are not limited to: trends in wireless communication and mobile commerce markets; our ability to develop new technology, and the effects of competing technologies developed and expected intense competition generally in our main markets; profitability of our expansion strategy; challenges to or loss of our intellectual property rights; our ability to establish and maintain strategic relationships in our major businesses; our ability to develop and take advantage of new software and services; and the effect of future acquisitions and investments on our share price. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this release speak only as of this release. We are under no duty to update any of the forward-looking statements after this date to conform such statements to actual results or to reflect the occurrence of anticipated results.