BIOMETRIC CARD MARKET ANALYSIS

Biometric Card Market Size and Trends

The Biometric Card Market is estimated to be valued at US$ 0.57 billion in 2024 and is expected to reach US$ 34.81 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 79.9% from 2024 to 2031. Increasing demand for secure and reliable identification solutions is driving the growth of the biometric card market. Biometric cards offer two-factor authentication by verifying fingerprints, face, iris, or voice along with security chips. This provides robust security for identification and access to buildings, computer networks, and IT systems.

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The market is witnessing high demand from government organizations as biometric cards help in identifying individuals easily and securely. Governments across countries are undertaking digital identity programs and issuing biometric enabled ID cards and passports to citizens. With growing security breaches and increasing instances of document fraud, organizations across industries are adopting biometric cards to authenticate employees and customers, which is further propelling the demand for biometric cards.

Increasing adoption of digital payments

Biometric cards are expected to see greater adoption as digital payments continue to grow in popularity globally. Over the past decade, there has been a significant shift away from cash payments towards contactless payments using cards, mobile wallets, and other digital means. This trend was further accelerated during the COVID-19 pandemic as consumers sought safer payment options that minimize physical contact.

The growing market for contactless payments and rise of new technologies like mobile wallets have compelled retailers to upgrade their point-of-sale systems as well. Modern payment terminals now support tap-and-pay along with card authentication modes beyond chip-and-PIN. This interoperable infrastructure allows biometric cards to be accepted across merchants smoothy. Major banking institutions believe biometric verification presents a logical next step in the evolution of secure and seamless digital transactions. Wider distribution of biometric payment cards depends on overcoming technology challenges and gaining user confidence in handling biometric data securely. But with digital becoming the default choice for most consumers, biometric cards are well-positioned for significant pick up in coming years.

For instance, Fingerprint Cards AB a biometrics company, predicts that by 2026, approximately 6 billion payment devices will be shipped annually, with nearly all of them being contactless. Additionally, the company estimates the potential Total Addressable Market (TAM) for biometric sensor modules and software in the payment sector to be about 3 billion units per year.

Market Concentration and Competitive Landscape

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Increasing demand for multifactor authentication

As financial fraud and digital criminal activities become more sophisticated, the need for robust authentication solutions goes beyond simple passwords and PINs. Traditional methods are vulnerable to hacking techniques like phishing, keylogging, and brute force attacks. Criminals develop elaborate schemes to trick users into revealing login credentials or circumvent security measures entirely. This has led to significant financial losses and reputational damage for both individuals and organizations.

In response to these evolving security threats, the biometric card market is experiencing a surge in demand for multi-factor authentication (MFA).

For instance, in May 2022, IDEX and Verisoft collaborated to bring biometric card solutions to the market at reduced prices for issuers and personalization bureaus, enhancing their position in the ecosystem. IDEX expressed enthusiasm about partnering with Verisoft to deliver a comprehensive and agile approach to biometric solution standards, ensuring seamless customer payment experiences.

Key Takeaways from Analyst:

The biometric card market has strong growth potential driven by increasing demand for contactless payments and digital identification globally. Governments adopting digital ID programs will boost adoption rates. The need for secure and accurate authentication is a key driver with biometric cards providing multi-layered authentication with fingerprint, facial, or iris recognition. North America and Europe currently dominate due to stringent identification laws but high smartphone penetration may reduce opportunities. Asia Pacific will see fastest growth as countries issue biometric national ID cards to large populations seeking digital ID solutions.

One challenge is the higher costs of biometric cards compared to traditional smart cards which may hamper widespread usage, though prices are expected to decline over time. Interoperability between different biometric technologies remains a challenge due to lack of standards. Privacy and security of biometric data stored on cards is a concern that could slow demand if not properly addressed through use of encryption and access control. Alternative authentication methods from smartphones may capture some opportunity in mass market consumer applications.

The introduction of contactless EMV chip technology integration on biometric cards will drive transaction volumes. Partnerships between payment networks, card manufacturers, and governments are opportunities for embedded payments and ID on single platforms. Developing nations lack integrated ecosystem support which restraints market potential until biometric programs achieve scale.

Market Challenges: Incompatibility between Systems

Biometric cards leverage a variety of technologies to verify user identity, including fingerprint scanners, iris scanners, and facial recognition. However, a major hurdle to widespread adoption is the current lack of interoperability between these systems. Imagine a situation where a bank issues a credit card equipped with a fingerprint scanner, but ATMs or retail point-of-sale systems might only have readers compatible with facial recognition.

Market Opportunities: Enhanced Security and Reduced Fraud

Biometric authentication adds a powerful layer of security compared to traditional methods like PINs or passwords. Fingerprint, iris scan, or facial recognition verification significantly reduce the risk of identity theft, financial fraud, and security breaches. This fosters trust in digital transactions for both consumers and businesses, leading to wider adoption of biometric cards.

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Insights, By Application: Growing digital payments drive the payments application segment growth

The payments application segment is estimated to hold the highest share of 64.1% in 2024, owing to the rising demand for contactless and digital payment methods. As consumers increasingly adopt cashless payment modes for convenience and safety, biometric verification provides strengthened security for financial transactions over traditional PIN or signature-based cards. The integration of fingerprint or facial recognition technology allows cardholders to authenticate transactions with a simple touch or scan, removing the need to enter passcodes repeatedly.

This enhanced user experience streamlines the payments process, encouraging greater usage of cards for small ticket purchases that were previously cash-only. Retailers are also incentivized to upgrade their point-of-sale systems to accept biometric cards, knowing it will increase spend volumes per customer via frictionless checkout. With secure biometrics replacing less reliable security layers like CVC codes, merchants face reduced chargeback fraud from online payments as well.

As digital wallets and peer-to-peer funds transfer see rising adoption, the ability to access account balances and make transfers with biometric verification on a single card form factor is driving demand. Younger consumers especially value this kind of convenience and speed over traditional payment methods. Cybercriminals' increasing exploitation of stolen financial data has also boosted end-user confidence in biometric authentication technology, helping to accelerate the shift away from signature-based cards in the payments segment. 

Insights, By Industry Vertical: Private sector sees opportunity in using biometric cards for staff ID and access control in growing BFSI industry

The highest share of 51.28% the biometric card market is captured by the BFSI industry vertical in 2024. Within this segment, private financial institutions and banks have a pressing need to securely manage large employee bases and streamline internal processes with biometric identification solutions. Integrating employee authentication via fingerprint onto an existing staff ID card removes vulnerabilities from passwords or token-based systems.

Staff can be verified for building entry, accessing sensitive databases, or authorizing financial transactions in a seamless, contactless manner. This enhances both convenience and security versus carrying separate physical and electronic IDs. Biometric cards also enable new remote working policies to be implemented safely, with employees securely logging into digital systems from any location. Overall operational efficiencies are realized through a single credential performing multiple identification and access control functions.

As the BFSI industry continues broad-based digital transformation, security concerns over identity theft and fraud are paramount. Biometric cards address these issues through reliable one-to-one user verification. Large banks see this as a worthwhile investment that streamlines the user experience for personnel while strengthening resilience against the growing sophistication of cyberthreats. The ability to future-proof identification infrastructure with upgradeable biometric cards is another factor driving their adoption in this segment.

Regional Insights

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North America is estimated to be the dominant region in the biometric card market in 2024 with the overall market share of 39.61%. The presence of major biometric card manufacturers such as IDEMIA, Idex Biometrics, and Thales Group has helped establish North America as an important hub for biometric card technology innovation and production. These companies continue to invest heavily in R&D to develop newer and more secure card formats.

From a demand perspective, the region has been at the forefront of adopting biometric identity verification systems for critical infrastructure protection as well as commercial applications. Several government agencies and private enterprises have mandated the use of biometric cards for controlling physical access to high security areas and facilities. For instance, many airport workers, defense personnel, and government employees now rely on biometric access cards for their day-to-day operations. Banks have also started issuing biometric debit and credit cards to enhance transaction security for customers.

Moving forward, the Asia Pacific region is projected to be the fastest growing market for biometric cards during the forecast period of 2024-2031, exhibiting a CAGR of 98.16%. Countries such as India, China, and South Korea are investing aggressively in modernizing their ID systems. They aim to transition from traditional ID cards to secure digital formats such as biometric smart cards. This will be a massive driver of biometric card demand in the coming years. Additionally, demand from travel and tourism is surging as several countries plan to roll out biometric passports and visa cards for easier identification of foreigners at ports of entry.

A burgeoning middle class with increasing spend on fintech solutions is also expanding the Asia Pacific market. Financial institutions are leveraging biometric authentication as a way to target new customer segments. They want to offer contactless, convenient payment options while meeting stringent security needs. With a majority of the global population and several emerging economies, Asia Pacific presents immense opportunities for growth that manufacturers are keen to tap into. As biometric card usage rises across government and commercial applications, Asia Pacific is poised to become a dominant force in the worldwide biometric card landscape.

Market Report Scope

Biometric Card Industry News

• In April 2022, IDEX Biometrics ASA announced its partnership with E-Kart, a leading card manufacturer in Europe, to commercialize biometric payment solutions in Eastern Europe. Also, in April 2022, Fingerprint Cards AB, a global biometrics company, revealed that its technology would be part of at least two new commercial biometric payment card launches in Morocco. These trends are expected to support the growth of the biometric payment market during the forecast period.
• According to the Japan Consumer Credit Association, the number of credit cards issued in Japan reached 295.31 million as of March 2021, marking a 0.8 percent increase from the previous year.
• Furthermore, in 2020, Fingerprint Cards reported that 57.0% of all in-store payments in the U.K. were contactless, driving the adoption of biometric payment cards.

*Definition: The biometric card market involves the research and development, manufacturing, and sale of smart cards that incorporate biometric technology. Biometric cards use fingerprint scanning, facial recognition, iris scanning or other biometric identifiers to authenticate the identity of an individual. These advanced identity cards are used for security applications such as ID management, access control, e-passports, national IDs, driver's licenses and more. The biometric card market has seen significant growth as governments and organizations aim to enhance security through multi-factor authentication.

Market Segmentation

• Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Payments
  • Access Control
  • Government ID and Financial Inclusion
  • Other Applications (IoT-based applications, etc.)
•  Industry Vertical Insights (Revenue, USD Bn, 2019 - 2031)
  • BFSI
  • Retail
  • Government
  • Healthcare
  • Commercial Entities
  • Other
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
  • Rest of Asia Pacific
    • Middle East & Africa
    • South Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • Bio-idz
  • BNP Paribas
  • Ethernom Inc.
  • Fingerprint Cards AB
  • Goldpac Fintech
  • IDEMIA Group
  • IDEX Biometrics ASA
  • Infineon Technologies AG
  • Mastercard Incorporated
  • NXP Semiconductors
  • Samsung's System LSI Business
  • Seshaasai Business Forms (P) Ltd
  • Shanghai Fudan Microelectronics Group Co. Ltd
  • ST Microelectronics NV
  • Thales Group
  • Visa Inc.
  • Zwipe AS