We all were hands and then corona happened. 2019 not just brought the deadly coronavirus, but it laid quite a few rules for the world to follow. Social distancing was one of them and so, going digital became the call of the nations. Together, they have upsurge the use of smart cards across industry. The major growth drivers being the surging demand for contactless card (tap-and-pay) payments, and proliferation of smart cards in healthcare, transportation, and BFSI verticals. A 2020 Fiserv survey conducted by Harris Poll, revealed that nearly 42% of consumers considered tap-and-pay credit cards the safest in preventing the spread of the virus. The report also highlighted that the general perception of tap-and-pay cards being the most secured, preferred, convenient and fastest payment method expanded since 2019.
There is also an increase in the penetration of smart cards in access control and personal identification applications. On the other hand, easy access to e-government services and rising demand for online shopping and banking have all together pushed the global smart card market.
According to MarketsandMarkets, the global smart card market will reach $16.9 billion by 2026, up from $13.9 billion in 2021, growing at a CAGR of 4% from 2021 to 2026. However, Allied Market Research predicts this growth to be at $15.56 billion by 2027, growing at a CAGR of 6.2% from 2020 to 2027. APAC will continue to be the major growth contribution to is, region-wise. The high demand in the region is estimated to open lucrative opportunities for the market players in the future.
Banking smart card market will contribute an annual average of 3% during 2021-2027 (Orion Market Report). The report says that the recent trends in the banking sector are changing the current market and industry, and includes banking and payment smart cards. These smart cards have introduced a new standard for electronically purchasing good and services. In addition, the embossed numbering system has been replaced by the key hold on the smart card embedded chip.
Alongside, partnerships, contracts and product launches would offer lucrative opportunities to market players in the next five years. Also, smart cards can be used to effectively manage cryptographic keys. This will enable efficient and secure transaction in blockchain applications, which is emerging as a sunrise industry. Yes, blockchain is a revolutionary technology helping businesses develop fast and secure applications to meet their stringent security requirements. And smart cards act as vault for storing cryptographic keys, which when connected to the internet through POS readers, keys stored in them can be matched with the online libraries. If the keys match, voila! Users are authenticated. Banks and other ecosystem players can leverage this technology to secure and authenticate the identity of users in an improved manner, which will further reduce any cyber thefts.
The benefits of smart cards are unprecedented and we have begun realizing its usability across industries. While the technology to make smart cards are easily available, it will benefit not just large but smaller economies too who want to develop their own smart cards and go digital in a more secure way.
