This work considers full and reduced-order observer design for rectangular descriptor systems with application to secure communications. The output of the system is assumed to have a nonlinear term coupled with the linear part, a case that is often overlooked in the literature. The observer design is feasible under some algebraic conditions and the feasibility of a linear matrix inequality. The results are showcased through the application of secure communications, for the safe transmission and estimation of an information signal and also an encrypted image. Also, a microcontroller implementation of the master system is performed, which is the first step towards a full realisation of the design.