Giesecke & Devrient

Giesecke & Devrient is a privately held, family-owned currency printer and producer of security technologies. Their different divisions handle banknote and securities printing, smart cards, cash handling systems, identification systems, and e-payment systems. They are the world’s second largest supplier of banknotes (number one is De La Rue), but the real focus of the company is now on its smart card production.

Origins: founded in 1852 by Hermann G. and Alphonse D., was a high-quality currency and security printer from the very beginning. They handled half of Germany’s currency production from 1958 (the other half was done by a state institution) up until the introduction of the Euro in Germany. As one of the 15 Euro printers (and the one that took care of the largest volume), they actually lost business, because the amount of printing they did for Germany was significantly larger than what they did for the EU.

Their technology is their cash cow now – in 1991, G&D produced the first SIM card, and they have been refining and diversifying that card technology ever since. Smart cards, chip passports, etc. They developed a bill that can be recognized and authenticated by a machine – and now they can sell both the machines and the special bills. The Fed bought 130 of these systems in the 1990s. Recently they have been at the forefront of contactless payment – their 2010 mobile device security platform makes more financial transactions possible in that way. The currency printing business is now only a subsidiary of the G&D parent company.

They’ve had quite a few scandals in their recent history, most of them centering around former owner/CEO Siegfried Otto, who married Devrient’s daughter and later divorced her. Besides the problems of tax evasion and scandalous disinheritances, there have been mechanical, legal, and ethical issues:

In 1995, G&D was accused of artificially inflating the price of their banknotes by making a dye (used in printing ink) 70% more expensive than it should have been. A partner company in Switzerland bought the dye from G&D, raised its price and then sold it back to the parent company, which then raised the price even more.

In 2000, there was a security feature misprint on their 100 euro note that was only caught after 325 million had been delivered to the Bundesbank. There was a big to-do about reprinting them, pulling faulty notes, cost of error, how it got past their quality controls, etc.

In 2009, G&D was criticized for supplying banknotes to Zimbabwe and basically making Mugabe’s hyperinflationary economic practices possible. The company stopped shipments of notes after an official request from the German government and widespread calls for UN and EU sanctions.

In 2012, a representative from the company was quoted as saying that they were much more concerned about sourcing the cotton necessary to make currency paper (in the face of a shortage from usual Indian suppliers) than the current Eurozone crisis. (Interesting when compared with De La Rue’s reactions to same questions).

8000 employees, 50 joint ventures and subsidiaries.

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Giesecke & Devrient: Its’s a Family Affair.”Globalsmart.com. 31 March 2008.

BBC News. “Fault makes millions of euros worthless.” BBC News Online. 11 July 2000.

Berreby, David. “Currency Printers: The Companies that Make Money from Making Money.” New York Times. 23 August 1992.

Bloomberg Business News, “German Inquiry On Mint’s Prices.” New York Times. 30 December 1995.

Brühl, Jannis. “Wo das Geld wächst.” Süddeutsche Zeitung. 04 May 2012.

Foster, Peter. “Money Pushers.” National Post. 09 May 2009.

Plumridge, Hester. “Finding Money in the Mobile Wallet.” Wall Street Journal (Online). 06 April 2012.

Also see: Giesecke & Devrient official website

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Comments
3 Responses to “Giesecke & Devrient”
  1. dem says:

    Do we know what led G&D to develop the SIM card? Or what I’m trying to ascertain is, what sub-branch of “securitized documents” led to SIM cards? Whose need were they trying to fill? I’m guessing it was the mobile phone companies’ need to be able to identify a specific user and keep certain information about them (account number, location, etc) secure? And then after that the other stuff (contact lists, text msgs, now mobile/contactless payment systems etc) got added on to the existing platform?

    • catemccrea says:

      I think I have a book that has this kind of information in detail, which I’ll find and post. For now, briefly, it seems that SIM cards were developed in response to the European Conference of Postal and Telecommunication Administration (CEPT)’s efforts to create a mobile phone standard (now known as GSM). “The role of the SIM card in GSM networks was and still is to authenticate users of GSM mobile networks.”

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