Smart cards are IC-based cards that accumulate and retrieve information using various computer systems. Smart cards consist of central processing units and memory units. Smart cards primarily act as a cost-effective way to store, manage, and maintain credentials for their users. This makes these products highly convenient for different applications. In addition, the portability of smart cards enables their extensive adoption across different applications. Currently, smart cards are widely used across sectors such as telecommunications, BFSI, and government. Due to the numerous advantages they offer, smart cards are increasingly used in the healthcare, government IDs (e-passports), and retail sectors. Thus, strong ongoing adoption of smart cards across different sectors is estimated to substantially spur the market’s growth in the coming years.
The research study titled “Smart Cards Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2016 - 2023” provides in-depth analysis of the market and related sub-segments. The report strategically focuses on market segments including different types of smart cards and components. In addition, this report provides market insights and forecasts of the size and growth of each segment across each of the geographic regions. The report includes detailed analysis of prevalent market trends and profiles of key players. In order to provide better understanding of competition in the market, the report offers ecosystem analysis and competitive landscape. The study on the global smart cards market has been conducted with the objective of providing thorough coverage of the underlying technological and socio-economic factors driving the market.
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Improved Security Emerges as Most Wanted Smart Card Feature in BFSI and Retail Industry
Conventional magnetic strip smart cards are currently extremely vulnerable to data theft threats due to the absence of proper encryption codes between the hacker and a user’s personal financial data. This is easily negated by smart cards, where the EMV chip-on-chip feature adds a high level of security to the user’s data.
Additionally, the advent of NFC, IoT, net banking, and ecommerce have all contributed to the growing preference of smart cards across the world. The use of NFC and IoT is contributing vastly to the more efficient implementation of smart cards, while the booming ecommerce industry is making it imperative for banks to employ stronger security measures against data theft.
EMV chips are rapidly becoming the global standard for user financial access and transactions. They offer a safer way for users to perform all transactions in the modern scenario of possible threats to data and the protective measures that can be taken.
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High Adoption Cost Continues to Make Vendors Hesitate from Smart Card Tech
“A large percentage of consumers still use magnetic strip cards for their daily transactions,” states a TMR analyst. “The U.S., for instance, had delayed their nationwide adoption of EMV smart cards, allowing a longer window of time for hackers and fraudsters to gain access to all the information stored in a user’s magnetic strip card.” Currently, about 130 countries are officially implementing the use of smart cards and replacing magnetic strip cards.
The problem that applies especially to traders and banks in developing nations is the high implementation cost associated with smart card technologies. From the perspective of traders and vendors, the high initial cost of installing EMV terminals is not worth it until they receive a confirmation from major banks over the use of smart cards on a large scale. Until then, they will stick to magnetic strip card terminals. At the same time, banks were pushing the responsibility on to the vendors, claiming that they cannot distribute smart cards until there are enough terminals for users.
Most of these complications are being addressed currently, such as shifting the liability of adoption from banks to vendors and lowering the cost of terminals and cards through government incentives and using efficient production means. However, nations from Asia Pacific and Latin America still have large percentages of consumers using magnetic strip cards, still maintaining the risk of theft at a high level.
Contact Smart Cards Will Retain Leading Market Revenue Share
The global smart cards revenue generation is expected to expand at a CAGR of 7.4% within a forecast period from 2016 to 2023. This market is expected to be valued at US$8.5 bn by the end of 2016 and US$14.1 bn by the end of 2023.
Contactless smart cards are expected to expand at a CAGR of 11.5% from 2016 to 2023 in terms of revenue. They form the fastest-growing segment in terms of type. Contact smart cards will still manage to be the top grossing segment for the same forecast period, and is expected to reach US$7.7 bn by 2023.
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