Vodafone Group PLC has reached a deal to use smart-chip maker Gemalto NV’s technology to manage a new mobile-phone payment product set for release next year, two people familiar with the plan said.

The agreement is for five years, said the people, who asked not to be identified ahead of a planned announcement as early as next week. Officials at Vodafone and Gemalto declined to comment. The pact was reported by the Wall Street Journal today.

The deal would give Gemalto access to 400 million new users, increasing the French company’s reach to 1.2 billion, said one of the people. Chief Executive Officer Olivier Piou is moving the company into new security technology that will let the Amsterdam-based company benefit from a rise in contactless mobile payments and machine-to-machine transmissions.

The contract, which doesn’t include Vodafone’s mobile-wallet joint venture, will initially be for Germany, the U.K., the Netherlands and Turkey, said one of the people. More than 1 billion people may use mobile payments with almost $1 trillion in transaction value by 2016, according to IE Market Research.

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