Smart Cards Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028F

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.

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..

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.

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:

• Contact-based
• Contact-Less

Global Smart Cards Market, By End-User Industries:

• BFSI
• IT & Telecommunication
• Government
• Transportation
• Other End-User Industries

Global Smart Cards Market, By Region:

• North America
• United States
• Canada
• Mexico
• Asia-Pacific
• China
• India
• Japan
• South Korea
• Indonesia
• Europe
• Germany
• United Kingdom
• France
• Russia
• Spain
• South America
• Brazil
• Argentina
• 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, the publisher offers customizations according to a company's specific needs.


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