International. A new report on the smart card market that includes the impacts of Covid-19, by analyst Marketsandmarkets, estimates that this sector will reach US$16.9 billion by 2026 from US$13.9 billion in 2021, with CAGR growth of 4% from 2021 to 2026.
The major drivers of market growth are the increasing demand for contactless card payments (touch and pay) amid Covid-19, the proliferation of smart cards in the health, transportation and BFSI, transportation, and BFSI applications verticals; increased penetration of smart cards in access control and personal identification applications; and easy access to e-government services and increased demand for online shopping and banking. In addition, new blockchain-enabled user information security modes and the adoption of smart cards in APAC-populated countries act as growth opportunities for smart card developers.
No contact, projected sector with the largest market share
Radio frequency identification (RFID) or near field communication (NFC) communication technologies are primarily used for contactless smart card applications. Covid-19 has a positive impact on the contactless smart card market, as the World Health Organization (WHO) and governments around the world are advocating for the use of these cards for various purposes and thus ensuring social distancing to contain the spread of the virus.
Telecommunications, stronger vertical
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 telecom segment accounted for the maximum share with 42% of the smart card market in 2020. The expansion of the global mobile network and improvements in its infrastructure are driving the growth of the market. In addition, Covid-19 generated an increased demand for connectivity, and the researchers found that the current crisis drove the trend towards the digitization of business and private communication with cellular technology, along with the generalization of digital conferencing. In addition, the penetration of high-end SIM card technologies, such as LTE, 5G, M2M, eSIM, and SWP, is expected to increase the growth of the market in the coming years.
Geographical bastion
Analysts suggest that the APAC region is the largest smart card market and is expected to lead the way for a few years. The robust financial system that is increasingly being digitized and government agencies incorporating smart chip-based systems for better process monitoring are driving several APAC countries to adopt smart card solutions due to growing demand, specifically in transportation, BFSI, retail, government, and healthcare sectors. Smart cards are used to buy tickets on subways, buses, and ferries, among others, in several APAC countries. China is projected to witness increased demand for smart cards in the region with its large consumer base and the presence of several smart card manufacturers.
Smart cards implemented correctly in all sectors have proven to be very effective in the fight against theft and fraud. Government projects, such as the Aadhar card in India, drive the demand for smart cards for use in various sectors. In addition, security concerns, particularly in the public sphere, are also expected to drive the growth of the smart card market in APAC.
