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Escalating Security Threats Driving Demand for Smart Cards

Article Description

Industries and companies that traditionally used machine-readable card technologies such as barcodes and magnetic stripes are gradually switching to smart cards. There has been an alarming rise in data security threats and fraudulent activities owing to the surge in online payments and smart cards, which offer better reliability and security, resulting in the shift in security technologies used by a number of companies.

The global smart cards market is driven by several factors such as the rising penetration of smartphones and mobile phones in general, the declining tariff rates in the telecom industry, and the declining cost of SIM cards.

Browse the full Global Smart Cards Market report at

Security and Convenience Most Valued Features of Smart Cards

Smart cards are plastic, pocket-sized devices with embedded integrated circuits that store data in a digital format. The embedded chip is either a microcontroller/microprocessor or a memory chip; microcontroller-based smart cards are used to store valuable credential information, while memory-based smart cards are the least secure form of smart cards. The demand for smart cards has risen in recent times owing to some of their key features such as convenience and security. The adoption of smart cards across a wide range of applications is also driven by their speed and ease of use.

The rise in fraudulent activities and security threats has resulted in the introduction of four main types of smart cards: contact-based, dual-interface, contactless, and hybrid. Contact-based smart cards are mostly used in low-end SIM cards in the telecom sector and are powered by the reader. Contactless smart cards offer better security than contact smart cards and are self-powered devices. Dual-interface smart cards, a combination of contactless and contact cards, are used mainly in the government and banking sectors in government IDs and credit/debit cards. Hybrid cards are multifunction cards that comprise more than one chip cards with no interface with each other.

Rising Adoption of SIMs Driving Global Smart Cards Market

The global smart cards market comprises five geographical segments: Europe, the Middle East and Africa, North America, Latin America, and Asia Pacific. Accounting for a 47.40% share in the global smart cards market in 2014, Asia Pacific is the largest regional segment in terms of revenue. The growth of this regional smart card market can be attributed to the rising adoption of electronic IDs (e-IDs) in transportation and government applications and the surge in the adoption of EMV cards in the financial and banking sector. A major factor that is also fueling the demand for smart cards is the soaring adoption of cellular subscriber identity modules (SIMs) in the telecommunication sector.

Regions that are anticipated to register strong growth in the coming years are the Middle East and Africa and Latin America. The promising expected trajectory of these regions is mainly due to the presence of a number of government initiatives encouraging the issuance of personal ID cards and the rising demand for SIMs from the telecom industry.

Benefitting from the healthy pace of the global smart cards market are its leading players: Infineon Technologies AG, Atos SE, American Express Company, Gemalto NV, Texas Instruments, Inc., INSIDE Secure SA, Giesecke & Devrient GmbH, and NXP Semiconductors NV. Of these, Giesecke & Devrient, Gemalto, and Oberthur Technologies accounted for a share of over 50% in 2014 in the total market revenue.