Consumer preferences have changed over the years with the shift from cash-based transactions to cashless or electronic transactions. The major issue with electronic transaction is the increased security threats. Also, unlike any other market, the transactions market also has to move forward with induction of new technologies resulting in the development and application of smart cards across the globe. The global smart card market is projected to rise from US$7.90 bn in the year 2015 to the value of US$15.1 bn at the end of the forecast period of 2016 up to 2024 rising at a healthy 8.4% CAGR.
Increasing Security Threats Driving Global Smart Cards Market
Rise in the number of online transactions has a major security risk associated to it which could lead to data theft. The repercussions of such an attack could be corrupt, leading to major financial losses of the consumers. Smart cards from service providers such as Europay, Visa, and MasterCard offer top notch security to the clients in terms of online transactions and payments on swipe. The rise in cell phone usage and the demand for SIMs is also driving the global smart cards market owing to the new payment options being launched by service providers using cell phones, especially in the developing markets.
Development of Alternate Technologies Restraining Global Smart Cards Market
New technologies have been launched by solution providers in the form of near field communication (NFC). This allows users to simply make payments using their NFC devices or cell phones without the use of smart cards. Adoption of such technologies would diminish the demand for smart cards in the global market leading to hampering the market.
Adoption of smart cards for vendors is a costly affair as it needs the overhauling of the point of sale (PoS) devices. Vendors are hesitant about making the switch owing to the concern about financial institutions adopting smart cards and providing them to the consumers. This is resulting in major loss for the global smart cards market and is a major restraint.
Asia Pacific Fastest Growing Smart Cards Market
Asia Pacific is expected to dominate the global smart cards market owing to the developing economy in the region and rising spending of the people using online transactions and credit/debit cards. The Asia Pacific market is dominating the smart cards market globally with estimations of the market accounting for 49.3% volume share contribution. The sale of logical access cards in the region is expected to clock 10,223 units by the end of the forecast period. The market is expected to rise at a healthy CAGR of 9.5%.
Major players in the global smart cards market include Insidesecure SA, Watchdata Technologies, Morpho SA, Gemalto N.V., NXP Semiconductors N.V., Infineon Technologies AG, CPI Card Group Inc., Giesecke and Devrient GmbH, and Oberthur Technologies. Apart from its application in SIMs, companies in the market are looking towards expanding the use of smart cards to identity cards such as driving license, social security cards, and transportation cashless cards among others.
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