Impact Analysis of Covid-19
The complete version of the Report will include the impact of the COVID-19, and anticipated change on the future outlook of the industry, by taking into the account the political, economic, social, and technological parameters.
Market Insight- Global Powered Smart Card Market
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. Contact less smart cards are self-powered devices, offering enhanced security over contact smart cards. Furthermore, dual smart cards are a combination of contact and contactless smart cards, while hybrid cards are multifunction cards.
The global powered smart card market was estimated to account for US$ 4,406.1 Mn in terms of value by the end of 2019
Market Dynamics- Driver
- Increasing demand for secure and reliable payment transaction platforms across BFSI and retail sectors is expected to drive growth of the global powered smart cards market during the forecast period
Internet access has become convenient and usage has increased the sustainability due to increasing demand for online banking & shopping experience and rising access to e-government services. Increasing adoption of e-commerce services has increased the frequency of online payments globally in the recent past. According to Coherent Markets Insights Analysis, mobile payments are expected to reach US$ 617 Bn in terms of transaction value by 2016 end. Growth is anticipated to be mainly driven by increasing adoption of NFC77 technology in the U.S. and the global consumer market. Moreover, security risks associated with online payment options have increased the demand for secured payment options. Powered smart cards can enhance security, reduce fraud, and allow utilization of value-added services to consumers. Therefore, these factors are expected to boost growth of the global powered smart card market during the forecast period.
- Growing mobile phone connection subscribers around the globe are expected to propel the global powered smart card market growth over the forecast period
SIM cards used in the telecommunication industry are smart cards that are based on memory chips. Growing penetration of smartphones worldwide has increased the demand for SIM cards. This, in turn, is expected to propel the global powered smart card market over the forecast period, as the telecom industry majorly contributes in terms of service. Moreover, SIM cards enabled with NFC technology and supporting contactless payments are rapidly gaining global traction. For instance, in March 2015, Vodafone announced that its customers will be able to perform contactless payments, which will require a Vodafone NFC-enabled SIM card and be supported by various Android devices.
Asia Pacific region dominated the global powered smart card market in 2019, accounting for 44.7% share in terms of value, followed by Europe, and Middle East and Africa respectively
Source: Coherent Market Insights
Market Dynamics- Restraints
- Technically challenges faced by organizations are expected to restrain growth of the global powered smart card market during the forecast period
There are certain challenges enterprises may face while implementing powered smart cards at workplace such as interoperability issues, design and implementation of a public infrastructure key, and integrating different systems. Moreover, low literacy rates and low penetration of next-generation technology in emerging economies have dwindled the acceptance of smart cards. Hence, these factors are expected to restrain growth of the global powered smart card market during the forecast period.
- High cost associated with migration to powered smartcard is expected to restrain the global powered smart card market growth over the forecast period
Reluctance in adoption of capital intensive PoS terminals that accept powered smart cards because of cost required for its deployment is hampering PoS adoption at merchant stores. For instance, In order to increase the security of card payments, major credit card issuers in the U.S. such as Visa Inc. gave merchants a deadline of 1 October, 2015, after which responsibility of any fraud related to card payments would be bored by whichever party is lesser EMV-compliant. Therefore, these factors are expected to hamper the market growth in the near future.
- Providing complete solutions with inclusion of software and services related to powered smart cards are expected to present major growth opportunities
Entering into mergers and acquisitions can aid market players to enhance their market presence. This would also help them to gain access to advanced technology to offset price pressures. Moreover, Moreover, increasing card payment transactions are expected to open up untapped opportunities for the powered smart card industry. The total transactions using card payments were valued at US$ 10 trillion (As of 2013). This accounted for around one-third of all payments worldwide. On the contrary, contactless payment using wearable devices and smartphones is witnessing a significantly high rate of growth. For instance, in 2013 for instance, Standard Chartered Bank was seeking a superior facility for both e-Banking and card payment for its customers, while ensuring enhanced security and convenience. Gemalto NV offered Standard Chartered Bank an innovative two-in-one card that featured a small LCD display and combined EMV payment with a one-time password and transaction signing for e-Banking.
- Advent of high-end SIMs in terms of NFC capability and LTE providers is expected to provide lucrative growth opportunity
Technological evolution from 3G to 4G or LTE has introduced various high-end SIM cards in the market. SIMs embedded with advanced technology for mobile communications are expected to be commercialized in the near future. This major shift from physical SIM cards to embedded SIMs is expected to pose major growth opportunities for market players. For instance in February 2019, Gemalto NV introduced SIM cards and Universal Integrated Circuit Cards (UICC) embedded with secure operating systems authenticates each user and then allows access to mobile services.
Source: Coherent Market Insights
Global powered smart card market, by type segment, contactless sub-segment was accounted for 56.3% market share in 2019 and is expected to grow at a CAGR of 11.2% between 2019 and 2027.
Source: Coherent Market Insights
- Convergence of power smart cards
Currently, there are different types of payment functionality available in the market that are linked to various identity credentials such as social security/welfare cards and healthcare and national IDs. However, there is steady trend of convergence in the market. The trend is not limited to the government ID and payment applications though convergence of driver's licenses, healthcare cards, national IDs, passports, and voter's cards with the payment networks is expected to take place in the near future.
- Additional offerings such as software solutions and services
Currently, the market is dominated by some of the key players such as Gemalto NV, Giesecke & Devrient, Oberthur Technologies, and Morpho S.A. Increasing completion from local or regional players has led to decrease in powered smart card prices. Moreover, highly competitive market environment and advent of smart wearable devices powered by smart cards vendors are expected to shift their focus on providing additional software solutions and services related to powered smart cards in order to expand their consumer base and gain competitive advantage in the market.
Value Chain Analysis
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.
- Key companies in the market are focused on partnerships and collaborations, in order to gain competitive edge in the market. For instance, in June 2017, Safran Identity and Security partnered with IDEX to commercialize the first mass deployable biometric smart card.
- Major market players are involved in partnerships and collaborations, in order to enhance their market presence. For instance, in June 2016, Gemalto NV entered into a multi-year partnership with Bank of Aland Plc, a Scandinavian bank, to supply the latter with bio-sourced contactless cards made from corn-based PLA material. This is done to support ‘The Baltic Sea Project’, an environmental initiative started by the bank.