Smart Card Market growing at a CAGR of 7.4% from 2021 to 2027
Description
Theglobal smart card market was valued at USD 9,824.0 million in 2020 to USD 15,568.6 million by 2027, at a CAGR of 6.2% from 2021 to 2027. A smart card is a physical card that contains either an embedded memory or a microcontroller included in a contact pad. It connects to a reader either by short-range wireless connectivity or through direct physical contact standards such as near-field communication (NFC) or radio-frequency identification (RFID). Smart cards use encryption to provide safety for in-memory information and are generally designed to be tamper-resistant. Smart cards with microcontroller chips can accomplish on-card processing functions and can manipulate data in the chip's memory.
Smart cards are used in many applications, such as credit cards and other payment cards. These cards are usually used in applications that must deliver secure, fast transactions and protect individual data such as credit cards, different payment cards, government identification & corporate cards, and transit fare payment cards. It is also sometimes used as a legal document such as e-passports and visas. A Subscriber Identity Module (SIM) card is also a form of microcontroller-based smart card widely used in mobile phones and other devices.
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The global smart card market is anticipated to witness significant growth over the forecast period. Factors such as rapid digitalization, the surge in cashless transactions, and the rise in demand from the healthcare sector drive the development of the smart card market. However, high set-up costs and data theft & security concerns are a significant restraint to the global smart card industry. In addition, a new model of information security of users enabled by blockchain is expected to create opportunities for the smart card industry. Smart cards can efficiently manage cryptographic keys, thereby enabling secure & efficient transactions in blockchain applications.
Global Smart Card Market Dynamics
Drivers: Surge in demand for contactless smart card
Contactless intelligent card analysis shows that contactless transmission has created multiple opportunities globally. These are now coming in the form of soft-tokens, UPI, or QR cards, which help in contactless and secured money transfers. Many big companies, such as PayPal, Google Pay, Amazon Pay, are racing to win globally for money transfers. Since the last 10 years, all the banks have replaced the generally used debit and credits cards with microchips, which have led to wireless transfer. All the latest tech devices now have chips embedded in them, which also help to keep track of packages using the storage data. E-passports are the newest addition in terms of contactless innovative card products.
Restraints: High costs of incorporating chip cards
Smart cards have generated a great deal of interest among consumers in recent years, owing to their advantages. However, their cost is one of the factors that restrain the growth of the smart card market. The initial capital investments required for setting up smart cards for access control and other applications are high. Smart cards need readers to read encryptions and obtain the information to provide physical or logical access. The deployment of these readers involves additional purchase costs. Costs of these cards increase with the use of chips that have high capacity and offer highly sophisticated capabilities. Therefore, equipping these smart cards is expected to require more initial investments than conventional cards, which may hamper the market growth.
Opportunities: High demand from the Asia-Pacific region
China is one of the pioneers in introducing contactless payments, leading to the introduction of digital cards. In November 2019, Alipay, China’s leading payment platform, served more than 1.2 billion customers. China’s ID cards feature an embedded chip and digital encryption. Emerging economies across Asia-Pacific are set to offer potential opportunities for the growth of the smart card market, owing to the development of a robust financial system that is getting increasingly digitized and pushed by the government agencies to incorporate smart chip-based systems for better monitoring of processes.
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Scope of the Report
The study categorizes the smart card market based on type, end user, and regions.
By Type Outlook (Revenue, 2017-2027, USD Million)
- Contact
- Contactless
- Dual Interface
By End User Outlook (Revenue, 2017-2027, USD Million)
- Telecommunication
- Healthcare
- Government
- Transportation
- BFSI
- Others
By Region Outlook (Revenue, 2017-2027, USD Million)
- North America (US, Canada, Mexico)
- South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
- Europe (Germany, Italy, France, UK, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, the Netherlands, Norway, Sweden, Denmark, Rest of Europe)
- Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Singapore, Australia & New Zealand, Rest of Asia Pacific)
- The Middle East & Africa (Saudi Arabia, UAE, South Africa, Northern Africa, Rest of MEA)
Dual Interface, by type, is estimated to be the fastest-growing segment during the forecast period
By type, the global smart card market is divided into contact, contactless, and dual interface. During the forecast period 2021-2027, the dual interface is the fastest segment with a CAGR of 7.4% and a market revenue share of 22.62% in 2020. In contrast, contactless has the highest revenue share of the market, which is 40.32% in 2020.
Dual interface cards are equipped with both contactless and contact interfaces. This type of card enables secure access to the smart card's chip with either the contactless or contact smart card interfaces. Dual interface smart cards find applications in industries such as telecommunication, BFSI, retail marketing, and others. Advancements in the semiconductor industry and focus toward innovation have boosted the already increasing popularity of dual interface smart cards.
Asia Pacific accounts for the highest CAGR during the forecast period in the smart card market.
Based on region, the global smart card market has been segmented into North America, Europe, Asia Pacific, South America, and the Middle East & Africa. The Asia Pacific has a growth rate of 7.4% globally during the forecast period. The Asia-Pacific smart card market is analyzed across Japan, China, India, Australia, and the rest of Asia-Pacific. High economic growth in Asia-Pacific can be attributed to the rising demand for smart card products from fast-developing countries like China and India.
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On the basis of type, the Asia-Pacific smart card market was valued at USD 3,137.9 million in 2020 and is projected to reach USD 5,170.3 million by 2027, growing at a CAGR of 7.4% from 2021 to 2027. The contactless segment was the highest contributor, with USD 1,260.7 million in 2020, and is estimated to reach USD 2,124.8 million by 2027, registering a CAGR of 7.8%. The dual interface segment is estimated to reach USD 1,212.1 million by 2027 at a CAGR of 8.0%. The contactless and contact segments collectively accounted for around 77.7% share in 2020, with the former constituting approximately 40.0% share. The dual interface and contactless segments are expected to witness significant CAGRs of 8.0% and 7.8%, respectively, during the forecast period. The cumulative share of these two segments was 62.4% in 2020 and is anticipated to reach 64.5% by 2027.
Key Market Players
The global smart card market is fragmented into a few major players and other local, small, and mid-sized manufacturers/providers. Some key players are Thales, NXP Semiconductors NV, Giesecke+Devrient GmbH, Infineon Technologies AG, IDEMIA, CPI Card Group Inc., Identiv, Inc., Watchdata Technologies, CardLogix Corporation, and Alioth LLC. These market players are adopting growth strategies to strengthen their position in the market. Product launches and partnerships are the key growth strategies adopted by different key players in the market.
Recent Developments
- In May 2020, CPI Card Group collaborated with Oxygen, a digital banking platform, to develop personal and business debit cards.
- In April 2021, IDEMIA collaborated with Cembra and IKEA Switzerland to supply entirely eco-friendly credit cards, the first credit card in the world that has a card body made entirely from recycled plastic (rPVC) sourced from production waste of the European packaging and printing industry.
- In August 2020, Infineon collaborated with Fingerprint Cards AB, a leading biometrics company, to develop next-generation biometric cards.
- In June 2019, CardLogix expanded its multi-model biometric smart card issuance with the Trunkey solution. Its instant biometric smart card issuance system (IDBX) streamlines multi-model biometric enrollment and smart card issuance at the desktop.
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Key Issues Addressed
- What is the market size by various segmentation of the smart card by region and its respective countries?
- What are the customer buying behavior, key takeaways, and Porter's 5 forces of the smart card market?
- What are the key opportunities and trends for manufacturers involved in the smart card supply chain?
- What are the fundamental dynamics (drivers, restraints, opportunities, and challenges) of the market?
- What and how regulations, schemes, patents, and policies are impacting the growth of the market?
- What are the upcoming technological solutions influencing market trends? How will existing companies adapt to the new change in technology?
- The market player positioning, top winning strategies by years, company product developments, and launches will be?
- How has COVID-19 impacted the demand and sales of a smart cards in the global market? Also, the expected BPS drop or rise count of the market and market predicted recovery period.
- Detailed analysis of the competitors and their latest launch, and what are the prominent startups introduced in the target market? Also, detailed company profiling of 25+ leading and prominent companies in the market.
