According to a research report "Smart Card Market with COVID-19 Impact by Interface (Contact, Contactless, Dual), Type (Memory, MPU Microprocessor), Functionality (Transaction, Communication, Security and Access Control), Offering, Vertical, and Region - Global Forecast to 2026" published by MarketsandMarkets, the smart card market is projected to reach $16.9 billion by 2026 from $13.9 billion in 2021; it is expected to grow at a CAGR of 4% 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, the proliferation of smart cards in healthcare, transportation, and BFSI verticals, transportation, and BFSI applications; 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.
Moreover, a new mode of information security of users enabled by blockchain and adoption of smart cards in populated countries of APAC act as growth opportunities for developers of smart cards.
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.
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 the global mobile network and improvements in its infrastructure are boosting the growth of the market.
Also, 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 APAC region is the largest market for smart cards and is expected to lead the market for a few years.
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 several 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 several sectors. Moreover, security concerns, particularly within the public sphere, are also expected to fuel the growth of the smart card market in APAC.
