The smart card market is projected to reach USD 16.9 billion by 2026 from USD 13.9 billion in 2021; it is expected to grow at a CAGR of 4.0% from 2021 to 2026. Major drivers for the growth of the market are surged demand for contactless card (tap-and-pay) payments amid COVID-19, proliferation of smart cards in healthcare, transportation, and BFSI verticals; increased penetration of smart cards in access control and personal identification applications; and easy access to e-government services and risen demand for online shopping and banking.
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Based on vertical, the
telecommunications segment held the largest share of the smart card market in
2020.
A subscriber identity module (SIM) card is a type of
microcontroller-based smart card used in mobile phones and other devices. A SIM
identifies and authenticates a subscriber to a wireless cell phone network. The
telecommunications segment accounted for the maximum share of 42% of the smart
card market in 2020. Expanding global mobile network and improvements in its
infrastructure are boosting the growth of the market. In addition, COVID-19 led
to an increased demand for connectivity. The current crisis provided a push to
the trend of digitalization of business and private communication with cellular
technology, along with the generalization of digital conferences. Moreover, the
penetration of high-end SIM card technologies, such as LTE, 5G, M2M, eSIM, and
SWP, is expected to augment the market growth in the coming years.
The contactless segment
projected to account for largest size of the smart card market during the
forecast period.
A contactless smart card includes an embedded smart card secure
microcontroller or equivalent intelligence, internal memory, and a small
antenna; it communicates with readers through a contactless radio frequency
(RF) interface. Radio-frequency identification (RFID) or near-field
communication (NFC) communication technologies are primarily used for
contactless smart card applications. COVID-19 is positively impacting the
contactless smart card market as the World Health Organization (WHO) and
governments across the world are advocating the use of contactless smart cards
for various purposes to ensure social distancing to contain the spread of the
virus. Contactless smart cards provide ease, speed, and convenience to users.
The contactless interface has become highly relevant in the current COVID-19
situation, especially for payment applications, as it facilitates safe and
secure transactions without physical contact.
APAC estimated to account for the largest size of the smart card market in 2020.
Asia Pacific (APAC) is the largest market for smart
cards. The robust financial system that is being increasingly digitized and
government agencies incorporating smart chip-based systems for better
monitoring of processes are propelling several APAC countries to adopt smart
card solutions owing to increasing demand, specifically in the transportation,
BFSI, retail, government, and healthcare sectors. Smart cards are used to
purchase tickets in metros, buses, and ferries, among others, in several
countries in APAC. China is projected to witness the highest demand for smart
cards in the region owing to a large consumer base and the presence of a number
of smart card manufacturers.
Properly implemented smart cards in all sectors have
proven highly effective in combating thefts and fraud. Government projects,
such as the Aadhar card in India, drive the demand for smart cards for use in a
number of sectors. Moreover, security concerns, particularly within the public
sphere, are also expected to fuel the growth of the smart card market in APAC.
Key Market Players
Thales Group (France), IDEMIA (France), Giesecke + Devrient GmBH
(Germany), CPI Card Group (US), HID Global Corporation (US), Watchdata (China),
Eastcompeace (China), Inteligensa (US), ABCorp (US), and CardLogix (US) are a
few major players in the smart card market.
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