POWERED SMART CARD MARKET ANALYSIS

The global powered smart card market was valued at US$ 12.21 Billion in 2022, exhibiting a Compound Annual Growth Rate (CAGR) of 4.25% from 2023 to 2030.

The global powered smart card market refers to the industry involved in the manufacturing, development, and distribution of smart cards with embedded microprocessors or chips. These smart cards, also known as chip cards or integrated Circuit Cards (IC), are designed to store and process data securely. They find applications in various sectors including finance, government, healthcare, transportation, retail, and others.

Power Smart Cards differ from traditional magnetic stripe cards as they possess advanced functionalities and security features. They can process and store information, enabling them to perform secure transactions, authenticate users, store sensitive data, and provide access control in various applications.

Global Powered Smart Card Market- Regional Insights

The global powered smart card market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa.

The regional insights into the global powered smart card market reveal variations in adoption and growth patterns across different geographical regions. North America, being one of the early adopters of smart card technology, has maintained a substantial market share due to its robust financial infrastructure and widespread acceptance of contactless payments. The region's emphasis on data security and stringent regulations has also contributed to the strong adoption of powered smart cards in various sectors including government, healthcare, and transportation.

In Europe, the global powered smart card market has been driven by the implementation of government initiatives such as e-passports and national ID programs. The region's focus on enhancing security measures and integrating smart card technology into public services and transportation systems has further bolstered the market growth. Moreover, European countries have witnessed significant growth in contactless payments, leading to the increased adoption of powered smart cards for secure and convenient transactions.

The Asia Pacific region has emerged as a key growth area for the global powered smart card market, primarily driven by the increasing adoption of mobile payments, digital wallets, and contactless technologies in countries such as China, India, and South Korea. Government initiatives promoting smart city development and digital transformation have also contributed to the market's expansion in this region.

Latin America and the Middle East and Africa have shown promising growth prospects for powered smart cards, with governments and businesses recognizing the benefits of enhanced security and convenience. As these regions continue to invest in modernizing their infrastructure and embracing digital payment solutions, the adoption of powered smart cards is expected to grow steadily.

Figure 1. Global Powered Smart Card Market Share (%), By Region, 2022

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Global Powered Smart Card Market- Impact of Coronavirus (COVID-19) Pandemic

The COVID-19 pandemic had a substantial impact on the global powered smart card market. As the outbreak spread across the world, governments and businesses implemented strict lockdown measures and social distancing protocols, leading to disruptions in economic activities and consumer behavior. The pandemic's effects were felt across various sectors, including finance, transportation, healthcare, and retail, which are significant areas of application for powered smart cards.

In the financial sector, the decline in consumer spending and a shift towards contactless and digital payment methods influenced the demand for powered smart cards. With people avoiding physical contact, the adoption of contactless payments using powered smart cards, mobile wallets, and digital payment platforms surged, leading to an accelerated shift in consumer behavior.

Moreover, the pandemic affected transportation systems, leading to reduced travel and changes in commuting patterns. Public transportation, which heavily relies on powered smart cards for fare payments and access control, experienced a decline in ridership during lockdowns. However, as restrictions eased and people started returning to work and travel, the demand for contactless ticketing solutions using smart cards witnessed a gradual recovery.

The healthcare sector also witnessed an impact on the adoption of powered smart cards. The pandemic highlighted the need for secure and efficient healthcare record management and patient identification, driving the adoption of smart cards in healthcare applications such as electronic health records and patient identification cards.

Supply chain disruptions and factory closures during the pandemic affected the production and distribution of powered smart cards, leading to temporary shortages in some regions. However, as the situation stabilized and manufacturing activities resumed, the market gradually recovered.

Global Powered Smart Card Market - Drivers

Increased Demand for Secure Transactions

Powered smart cards, such as Europay, Mastercard, and Visa (EMV) cards, offer enhanced security features compared to traditional magnetic stripe cards. As financial transactions become more digital and electronic payment methods gain popularity, there is a growing demand for secure payment solutions, which boosts the adoption of powered smart cards. For instance, in 2021, governments around the world continued to push forward with digitalization initiatives, aiming to improve public services, and streamline administrative processes. As part of these initiatives, powered smart card solutions were adopted in various government programs and services, contributing to the demand for secure and reliable payment transactions.

For example, in certain countries, the government implemented powered smart cards for social welfare programs such as distributing financial aid and benefits to citizens. Powered smart cards facilitated secure and efficient disbursement of funds to eligible recipients, reducing the risk of fraudulent activities and ensuring that payments reached the intended beneficiaries reliably.

Growing Adoption of Contactless Technology

Contactless payment methods have gained momentum due to their convenience and speed. Powered smart cards with contactless capabilities (e.g., Near Field Communication (NFC)) enable users to make swift and hassle-free transactions, driving their popularity among consumers and businesses alike. For instance, Gemalto (now part of Thales Group), a world leader in digital security and identification solutions, has been at the forefront of providing secure contactless smart card solutions for various industries including finance, government, and healthcare.

Infineon Technologies AG is a leading semiconductor manufacturer that produces secure microcontrollers and chips used in powered smart cards, including contactless payment cards.

G+D is a global provider of secure technology solutions including powered smart cards with contactless capabilities for banking, government, and telecommunications applications.

Visa Inc., a prominent global payments technology company, has been actively promoting contactless payment solutions, including powered smart cards, to its network of card issuers and consumers worldwide.

Global Powered Smart Card Market - Opportunities

Healthcare Applications

The healthcare sector presents significant opportunities for powered smart cards. Smart cards can be utilized for maintaining electronic health records, patient identification, and secure access to medical data. The adoption of powered smart cards in healthcare can enhance patient data security, streamline medical processes, implementation of Electronic Health Records (EHRs), and Electronic Medical Record (EMR) systems and improve patient care. Powered smart cards can securely store and carry patient health data such as medical history, allergies, prescriptions, and treatment plans. These cards enable healthcare professionals to access accurate and up-to-date patient information quickly, leading to improved diagnosis and more efficient treatment decisions.

Data Security Solutions

As cyber threats continue to evolve, the demand for robust data security solutions is increasing. Powered smart cards can provide secure data storage and encryption, making them suitable for applications that require safeguarding sensitive information. One of the primary drivers for data security solutions in the powered smart card market is the rising implementation of contactless payment systems. Contactless smart cards, enabled by Near Field Communication (NFC) technology, allow for quick and secure transactions. However, the widespread use of such payment methods also raises the risk of unauthorized access and data interception. As a result, there is a growing demand for data security solutions that can safeguard sensitive financial information and personal data transmitted between the card and the payment terminal.

Global Powered Smart Card Market - Trends

Contactless Payment Adoption

The trend of contactless payment methods is gaining momentum worldwide, with consumers increasingly opting for contactless transactions for their speed and convenience. Powered smart cards are equipped with Near Field Communication (NFC) technology, enabling users to make quick and secure payments by tapping their cards on POS terminals, thus accelerating the transition to contactless payments.

Integration with Mobile Wallets

The integration of powered smart cards with mobile wallets and digital payment platforms is on the rise. This trend allowed users to add their powered smart cards to their smartphones and make contactless payments through their mobile devices, further enhancing the ease of use and flexibility of smart card technology.

Enhanced Security Features

The focus on data security and fraud prevention led to the incorporation of advanced security features in powered smart cards. These features included chip-level encryption, biometric authentication, and tokenization, providing users with a higher level of protection against cyber threats and identity theft.

Biometric Integration

The combination of powered smart cards with biometric authentication is gaining traction. Biometric-powered smart cards provide enhanced identity verification and reduce the risk of fraud, making them appealing for access control and payment verification.

Global Powered Smart Card Market - Restraints

High Implementation Costs

The initial cost of implementing powered smart card infrastructure, including upgrading POS terminals and issuing new cards, can be relatively high for businesses and financial institutions. This cost factor might have deterred some organizations from adopting powered smart card solutions, especially for smaller businesses with limited budgets.

Existing Infrastructure Compatibility

Transitioning to powered smart card technology required compatibility with existing payment infrastructure such as POS terminals and payment networks. For businesses and industries with legacy systems, integrating powered smart card solutions could present challenges and require additional investments in infrastructure upgrades.

Security Concerns

While powered smart cards are designed to be more secure than traditional magnetic stripe cards, no technology is entirely immune to security breaches. High-profile cyber-attacks and data breaches could create skepticism about the safety of using smart cards, potentially affecting their adoption.

Figure 2. Global Powered Smart Card Market Share (%), By Type, 2022  

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Global Powered Smart Card Market- Segmentation

The global powered smart card market report is segmented into type, application, and region.

Based on type, the market is segmented into contactless cards, hybrid cards, and dual-interface cards.

Based on application, the market is segmented into government, healthcare, transportation, telecommunication, financial services, retail, and loyalty, pay TV, energy and utility (smart meters for electricity, water, and gas).

Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East and Africa.

Based on type, the contactless segment is expected to hold the largest market share. A contactless smart card consists of an embedded secure microcontroller or comparable intelligence, internal memory, and a tiny antenna that communicates with readers through a contactless Radio Frequency (RF) interface. For contactless smart card applications, Radio-frequency Identification (RFID) or Near-field Communication (NFC) communication technologies are commonly employed.

Global Powered Smart Card Market: Key Developments

In January 2021, IDEMIA, a provider of biometric identification services, enrollment, physical access control, monitoring, and secure identity credentials, signed a four-year agreement with Jyske Bank, the second-largest Denmark-owned bank, to introduce the first recycled plastic payment card in Denmark.

In June 2020, the Macao government issued contactless prepaid payment cards pre-loaded with credit to mitigate the economic impact of the COVID-19 pandemic and provide financial support to its citizens. The cards were produced by G+D Mobile Security, global mobile security technology

In January 2020, Confidex, a leading designer and supplier of short-range wireless identification solutions, entered into a partnership with Thales, manufactures electrical systems to develop a flexible smart media for Calypso-based systems. Confidex used Gemalto’s digital security company software solutions to create a new category of microprocessor-based smart media. These products include durable contactless paper cards embedded with a PET layer that reinforces the structure of the card. This makes the product resistant to harsh environments associated with transportation applications.

Global Powered Smart Card Market: Key Companies Insights

The key players operating in the global powered smart card market are Watchdata Technologies Ltd., Texas Instruments Incorporated, Safran Identity and Security (Morpho SA), Samsung, Oberthur Technologies, Shanghai Huahong Integrated Circuit Co., Ltd., Wuhan Tianyu Information Industry Co., Ltd., Gemalto NV, NXP Semiconductors N.V., Giesecke & Devrient GmbH, Infineon Technologies AG, Eastcompeace Technology Co., Ltd., and Datang Telecom Technology Co., Ltd.

*Definition: A smart card or chip card is an IC-based card, which accumulates and retrieves information using various computer systems. Smart cards are cost-effective device to store, manage, and maintain credentials for end users. Many smart cards include a pattern of metal contacts to electrically connect to the internal chip. Smart cards typically find applications in mobile phones, identification cards, computer security, healthcare, public transit, and schools. There are different types of smart cards used available in the market namely contactless smart cards, dual smart cards, and hybrid smart cards.