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Smart cards are generally made up of plastic-based cards with the electronic chip 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.
Key Market Driver -
Rising information security needs related to user credentials is expected to drive the market growth.
Key Market Restraint -
Wide availability of alternatives is anticipated to limit the growth of the market.
The key players associated with the global smart card market are, 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, and others.
The global smart card market is segmented based on product type, applications, and geography.
By product type, the market is segmented into contact cards, contactless cards, hybrid cards, and others. The contact smart card segment is expected to hold a major share of the market owing to the wide availability of the cost-effective contact smart card readers at the various places such as banks, ATM’s, and others. This results in the large consumption of contact smart cards across the globe.
Based on applications, the global market is segmented into banking & financial services, government & security systems, transportation, schools, healthcare, and others. The banking and financial services segment is anticipated to hold a major share of the market owing to the large consumption of the smart cards among the people to avail the banking services. According to the report ‘The 2019 Survey of Consumer Payment Choice: Summary Results’, published by the Federal Reserve Bank of Atlanta, in 2019, nearly 82.5% of the U.S. population preferred to use smart debit cards for their daily financial transactions.
By geography, the global smart card market is segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa.
The largest share of the Asia Pacific region for the global smart card market is attributed to the large presence of the prominent smart card manufacturers such as Gemplus International S.A., Siepmann’s Card Systems Pvt. Ltd., Shanghai Fudan Microelectronics Group Co. Ltd., and others in the countries such as China, and India which is likely to support the market growth in the region.
Additionally, positive governmental support regarding the development of the commercial infrastructural facilities such as transportation, government, banking, and financial sector and others in the region is likely to support the demand for the smart cards. For instance, in October 2019, The National Payments Corporation of India, launched FASTag smart cards so that users can digitally pay fares at toll plazas and the cards are applicable all over India.
The European region is anticipated to grow at a considerable rate for the market owing to the increasing number of transactions with the help of smart debit and credit cards in countries such as the U.K., and France which give rise to the demand for the smart cards in the region. According to the report ‘UK Payment Markets Summary 2019’, presented by the UK Finance Organisation, in the U.K., about 15,000 million payments were made by the people with the help of smart debit cards in 2018 up from 10,000 million in 2015. Additionally, the presence of a large number of the higher income group of the population coupled with their spending for smart gadgets is likely to support the market growth in the region.
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