Forecast
Period
|
2024-2028
|
Market
Size (2022)
|
USD
9.58 Billion
|
CAGR
(2023-2028)
|
12.44%
|
Fastest
Growing Segment
|
BFSI
|
Largest
Market
|
Asia
Pacific
|
Market Overview
Global
Smart Cards Market was valued at USD 9.58 Billion in 2022 and is anticipated to
project robust growth in the forecast period with a CAGR of 12.44% through 2028. Smart cards provide methods to securely identify and
authenticate the cardholder and third parties who want access to the card. For
instance, a cardholder can use a PIN code or biometric data for authentication.
Smart cards also provide a way to securely store data on the card and protect
communications with encryption. During the COVID-19 pandemic, the business for
smart cards specific to telecommunications and healthcare was less affected
than other verticals. The upsurge of healthcare data brings up new challenges
in providing efficient patient care and privacy. Smart cards solved both
challenges by providing secure storage (dramatically more than 150 bytes that
can be stored on a magnetic stripe card) and easy data distribution. Increasing
healthcare expenditure is anticipated to propel the use of smart cards in the
healthcare market.
For instance, according to the Centers
for Medicare & Medicaid Services, US health spending is projected to reach
nearly USD 6 trillion by 2027. Moreover, the emergence of COVID-19 has prompted
several nations to develop vaccination-proofing plans, which are also
anticipated to aid market growth. Digital credentials are expected to play a
major role in managing the pandemic.
Key Market Drivers
Smart
cards are generally made up of plastic-based cards with electronic chips
inserted in it and are widely used for information transfer related to the
payments, user identification, and control. IC chips embedded in such cards are
available in different types that are based on various applications such as
meal vouchers and employee benefits, payment gateways, gaming, etc.
Companies
are largely introducing technology-based smart cards to provide secure
financial solutions to users. For instance, in November 2019, Innovatrics, a
Slovakian biometric firm partnered with Japanese tech-firm, MoriX Co. Ltd. to
launch a world-first bio-metric smart card that can be authenticated with the
fingerprint detection.
Rising
information security needs related to the user credentials is expected to drive
the consumer demand for the highly secured smart cards. The increasing
availability of the small-sized IC chips with better functionality embedded
into it is likely to help the companies to provide technology-enabled smart
cards to their customers. Besides this, growing consumer demand for smart
gadgets is likely to drive the demand for smart cards. Moreover, the rising
number of online shoppers, as well as the e-commerce penetration across the
globe, results in the large consumption of the smart cards among the people to
make secure transaction activities during product purchases. Additionally,
growing transportation facilities such as airplanes, railways, and buses are
likely to fuel the demand for smart cards for user identification purposes. For
instance, in August 2020, the Government of Delhi, India provided smart cards
to the daily metro commutes for user authentication purposes. Such cards can be
connected with the mobile application ‘Autope’ so that users can easily pay
ticket fares of the metro. However, the wide availability of the other
financial payment methods such as bank drafts, cheques, internet banking is
anticipated to limit the demand for smart payment cards.
Increasing
Digitalization and E-Government Initiatives
One
of the significant drivers for the smart card market is the increasing trend
toward digitalization. Governments around the world are adopting e-government
initiatives to provide more efficient and convenient services to citizens.
Smart cards are at the forefront of this digital transformation, enabling
secure identification, access control, and the secure storage of personal data.
They play a crucial role in e-passports, national ID cards, and other
government-issued documents.
Rising
Concerns About Cybersecurity
With
the growing volume of sensitive data being exchanged electronically, there is
an increased focus on cybersecurity. Smart cards provide a high level of
security, making them an ideal choice for protecting personal and financial
information. They offer secure authentication methods, data encryption, and
protection against various types of cyber threats, such as phishing and data
breaches.
Contactless
Payment Adoption
The
adoption of contactless payment methods, including contactless smart cards and
mobile wallets, has been on the rise. Consumers appreciate the convenience and
speed of contactless payments, and smart cards play a vital role in enabling
this technology. Smart cards used for payment applications, such as EMV
(Europay, Mastercard, Visa) cards, are embedded with a microprocessor chip that
enhances transaction security, reducing the risk of fraud.
Growing
Use in Healthcare
Smart
cards are increasingly being used in the healthcare industry to securely store
and manage patient information. Electronic health records (EHRs) and smart
healthcare cards help improve patient care, reduce errors, and enhance data
security. The need for efficient healthcare systems and the growing aging
population are driving the adoption of smart cards in healthcare. Smart cards
are widely used in transportation systems, such as contactless ticketing for
buses, trains, and subways. They also play a significant role in access control
and security systems, including building access, employee identification, and
event ticketing. As urbanization continues to grow, the demand for efficient
transportation and security systems will fuel the smart card market. The
integration of smart cards with mobile devices and the Internet of Things (IoT)
is expanding their use cases. Smart cards can be used to secure IoT devices,
authenticate users on mobile apps, and facilitate secure connections between
devices. This convergence of technologies is creating new opportunities for
smart card applications.
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Key Market
Challenges
The
smart card market is undoubtedly experiencing significant growth and adoption
across various industries, as discussed in the previous section. However, like
any thriving industry, it also faces a set of challenges that need to be
addressed for sustained development and innovation. In this section, we will
delve into some of the key challenges faced by the smart card market:
Security
Threats:
While
smart cards are known for their high level of security, they are not immune to
evolving cybersecurity threats. Hackers continually seek new vulnerabilities
and attack vectors, necessitating constant updates and improvements in security
measures. Protecting against advanced threats like side-channel attacks,
hardware tampering, and data breaches remains an ongoing challenge.
Standardization
and Compatibility:
The
smart card industry relies on various standards and protocols, and
interoperability can be a challenge when different systems and technologies are
involved. Ensuring compatibility between different smart card readers,
operating systems, and applications is crucial for seamless user experiences.
Cost
Constraints:
Smart
cards, especially those with advanced security features and capabilities, can
be relatively expensive to produce. Cost constraints can limit their adoption,
particularly in regions or industries with tight budgets. Finding ways to
reduce production costs while maintaining security standards is a constant
challenge.
Integration
Complexity:
Integrating
smart card technology into existing systems and processes can be complex and
time-consuming. Organizations often face challenges when retrofitting smart
card solutions into legacy systems or coordinating the rollout of new systems
across multiple departments.
User
Education and Acceptance:
Users
may be unfamiliar with smart card technology, leading to resistance or
confusion during the adoption process. Educating users about the benefits and
proper usage of smart cards is crucial for their successful implementation.
Physical
Durability:
Smart
cards are expected to withstand physical wear and tear, especially in
applications like access control and transportation where cards are frequently
used. Ensuring the durability of smart cards to maintain functionality over
time can be a challenge.
Environmental
Concerns:
While
smart cards are generally more durable and eco-friendly than traditional
paper-based cards, there is still a need to address environmental concerns
related to the production and disposal of smart cards. Reducing the
environmental footprint of smart card manufacturing and disposal is an ongoing
challenge.
Counterfeit
and Cloning:
Counterfeit
smart cards and cloning attempts are persistent challenges in the market.
Criminals attempt to replicate or clone legitimate smart cards for fraudulent
purposes, necessitating continuous improvements in anti-counterfeiting
measures.
Regulatory
Compliance:
Adhering
to evolving data protection and privacy regulations, such as the General Data
Protection Regulation (GDPR) in Europe, can be challenging for organizations
using smart card technology. Compliance with these regulations is essential and
requires ongoing efforts to adapt to changing requirements.
Technological
Advancements:
While
technological advancements are a driver for the smart card market, they can
also pose challenges. As technology evolves, older smart card systems may
become obsolete, requiring organizations to invest in upgrades or migrations to
newer technology platforms.
Maintenance
and Support:
Maintaining
a fleet of smart cards, especially in large-scale deployments, can be
challenging. Organizations need to provide ongoing support, updates, and
replacements for lost or damaged cards to ensure uninterrupted operations.
Supply
Chain Risks:
The
global supply chain disruptions, as witnessed during events like the COVID-19
pandemic, can impact the availability of critical components required for smart
card production. Ensuring a resilient supply chain is a challenge for
manufacturers and providers.
Competition
and Innovation:
The
smart card market is highly competitive, with numerous players offering a wide
range of solutions. To stay competitive, companies must continually innovate,
offering new features and capabilities while maintaining cost-effectiveness.
Cross-Border
Data Transfer:
In
an increasingly globalized world, cross-border data transfer is a concern,
especially when smart cards store personal or sensitive information. Navigating
data transfer regulations and ensuring data security during international
transactions can be challenging.
Evolving
Payment Landscape:
In
the realm of payment cards, the smart card market faces competition from
alternative payment methods, including mobile wallets and digital currencies.
Adapting to the evolving payment landscape and staying relevant is a challenge.
To
address these challenges, the smart card industry must remain vigilant,
adaptive, and committed to innovation. Collaboration between industry
stakeholders, including manufacturers, software developers, regulatory bodies,
and end-users, is essential to overcome these obstacles and continue reaping
the benefits of smart card technology in various sectors. While challenges
exist, the smart card market is poised for growth as long as it can effectively
address these issues and leverage emerging opportunities.
Key Market Trends
Global
Adoption of EMV Standards:
The
global adoption of EMV standards for payment cards has been a significant
driver for the smart card market. EMV cards, which are equipped with embedded
chips, have become the industry standard for payment cards due to their
enhanced security features. Many countries have mandated the transition to EMV,
driving the demand for smart card issuance and infrastructure upgrades.
Biometric
Integration:
Smart
cards are increasingly integrated with biometric authentication methods, such
as fingerprint recognition or facial recognition. This combination of
biometrics and smart cards enhances security and helps prevent identity theft.
It is particularly relevant in applications like national ID cards and access
control systems.
Emerging
Markets:
The
smart card market is seeing robust growth in emerging markets, particularly in
Asia, Africa, and Latin America. These regions are witnessing increased
government initiatives, financial inclusion efforts, and infrastructure
development, which are driving the adoption of smart cards for various
applications.
Environmental
Concerns:
In
an era of growing environmental awareness, the durability and recyclability of
smart cards are becoming more attractive to organizations looking to reduce
their carbon footprint. Smart cards are generally more durable and long-lasting
compared to traditional paper-based cards, reducing the need for frequent
reissuance.
Technological
Advancements:
Continuous
technological advancements in the smart card industry, including improvements
in chip technology, card manufacturing processes, and security features, are
driving market growth. These innovations enhance the capabilities and security
of smart cards, making them more appealing for various applications.
Regulatory
Compliance:
Regulatory
requirements related to data security and privacy are prompting organizations
to invest in secure solutions like smart cards to ensure compliance.
Regulations such as the General Data Protection Regulation (GDPR) in Europe and
various data protection laws globally have contributed to the demand for secure
authentication and data protection solutions. In conclusion, the global smart
card market is experiencing sustained growth driven by factors such as
digitalization, cybersecurity concerns, contactless payments, healthcare
adoption, transportation needs, mobile connectivity, global standards,
biometric integration, emerging markets, environmental considerations,
technological advancements, and regulatory compliance. As technology continues
to evolve and the demand for secure and efficient data management grows, smart
cards are poised to play an increasingly vital role across various industries,
further expanding their market presence in the coming years.
Segmental Insights
End-User
Industrial Insights
Smart card use
in the BFSI industry has many advantages, including secure data transfers and
the security of private information. Smart cards are also used as payment
authentication cards, access control cards, and credit or debit cards in the
banking, financial services, and insurance (BFSI) industry. By loading the
smart card with money that can be transferred using cryptographic protocols to
a vending machine or an account, they can be used as electronic wallets.
The banking
sector has long recognized the advantages of magnetic stripe card technology
and has transitioned to memory chip or microprocessor-on card technology.
However, the necessity for smart cards for protected payments has grown over
the past decade due to a rise in fraud rates.
The expansion of
neo-banks and the field of digital financial technology has had a direct impact
on the market under study globally. India is one example of a developing nation
that has embraced cashless transactions. Government agencies have supported them
in promoting the use of cards and other cashless payment methods, fueling a
supplementary market for smart cards.
The market's
expansion has been further aided by financial institutions' use of smart card technology
and different collaboration agreements. For instance, ICICI Bank declared last
year that it partnered with Greater Chennai Corporation and Chennai Smart City
Limited to launch the Namma Chennai Smart Card, which aims to offer the people
of Chenna, India, a uniform solution for a variety of payments..
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Regional Insights
Asia Pacific plays a significant role in
the global Smart Cards market. Since smart cards are more widely used in the Asia Pacific
area, demand from the BFSI, healthcare, retail, and government sectors is
likely to dominate the market.
A
big consumer base and the presence of major smart card manufacturers in China
are expected to result in a strong demand for smart cards in the region. Smart
cards were adopted by a number of banking institutions, which helped the market
expand.
For
instance, China Construction Bank (CCB) declared last year that they are
testing a biometric 'hard wallet' smart card that enables users to store
digital yuan and confirm payments made using the central bank's digital
currency with their fingerprints. With the help of cutting-edge fingerprint
authentication and recognition, the stored value on the card is further
protected.
To
establish various types of smart cards in the nation, several banks operating
in the region have partnered with smart card creators. Axis Bank, ICICI Bank,
and SBM Bank are a few Indian banks that released smart cards in the latter or
first quarter of the previous year.
In
addition, MoriX Co., a Tokyo-based electronics company, collaborated with
Fingerprint Cards AB last year to develop and introduce biometric payment cards
using the T-Shape module from Fingerprints. These cards are anticipated to be
integrated with payment cards using conventional automated manufacturing
techniques.
To
support market expansion, new initiatives, and developments are encouraging
other end users to use smart cards. Transit cards were recently offered for
users of public transportation in more than 300 Chinese cities by Octopus, one
of the smart card operators in Hong Kong. Users of Octopus transit cards will
be able to pay for public transportation in mainland China's buses, trains, and
ferries as part of the company's offshore development plan. The maximum top-up
amount for the Octopus card will initially be HKD 3,000 (USD 386), with the
option to convert to digital Octopus cards in a phase two launch.
Recent Developments
- April
2022: IDEX Biometrics ASA announced its collaboration with E-kart, a smart card
technology company, to commercialize biometric payment solutions in Eastern
Europe. Through this partnership, banks and other payment card users in Turkey
and around the world will gain access to biometric smart cards that offer
improved performance and cost efficiency.
- January
2023: To enhance the convenience of passengers, the Delhi Metro has
collaborated with Airtel Payments Bank, offering an additional smart card
top-up facility. Customers' Internet banking details will be securely stored
within the app, ensuring the utmost safety for all transactions. Taking
advantage of this feature for recharging purposes will be both swift and
effortless, providing a seamless experience for commuters.
Key Market Players
- Samsung Electronics Co. Ltd.
- Sony Corporation
- CPI Card Company
- Square Inc.
- Francisco Partners
- Inteligensa Group
- Infineon Technologies AG
- NXP Semiconductors N.V.
- CARD Corporation
- Giesecke & Devrient (G&D) GmbH
- Ingenico
By Type
|
By End-User Industrial
|
By Region
|
|
- Contact-based
- Contact-Less
|
- BFSI
- IT & Telecommunication
- Government
- Transportation
- Other End-User Industries
|
- North America
- Europe
- Latin America
- Middle East & Africa
- Asia Pacific
|
|
Report
Scope:
In
this report, the Global Smart Cards Market has been segmented into the following
categories, in addition to the industry trends which have also been detailed
below:
- Global
Smart Cards Market, By Type:
o
Contact-based
o Contact-Less
- Global
Smart Cards Market, By End-User Industries:
o
BFSI
o
IT
& Telecommunication
o
Government
o
Transportation
o Other End-User Industries
- Global Smart Cards Market, By
Region:
o North America
§ United States
§ Canada
§ Mexico
o Asia-Pacific
§ China
§ India
§ Japan
§ South Korea
§ Indonesia
o Europe
§ Germany
§ United Kingdom
§ France
§ Russia
§ Spain
o South America
§ Brazil
§ Argentina
o Middle East & Africa
§ Saudi Arabia
§ South Africa
§ Egypt
§ UAE
§ Israel
Competitive
Landscape
Company
Profiles: Detailed
analysis of the major companies presents in the Global Smart Cards Market.
Available
Customizations:
Global
Smart Cards Market report with the given market data, Tech Sci Research offers
customizations according to a company's specific needs. The following
customization options are available for the report:
Company
Information
- Detailed analysis and profiling of
additional market players (up to five).
Global Smart Cards Market
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