The Smart card market size is projected to reach USD 16.9 billion by 2026, growing at a compound annual growth rate (CAGR) of 4.0% during the forecast period.


The smart cards market is projected to reach a value of USD 16.9 billion by 2026 due to the demand for increasing contactless payments, government schemes for national ID cards, and rising e-commerce shopping.


Driver: Surged demand for contactless (tap-and-play) payments amid COVID-19


The consumer awareness about the benefits of tap-and-pay cards and the use of these cards was already trending upward before the pandemic. However, with the outbreak and the spread of the COVID-19, the use of contactless payments grew quickly. Amid the pandemic, which obligates limited contact and social distancing, people buy groceries, household items, etc., using contactless payment options. Consumers aim to limit their exposure during transactions. According to research carried out by Fiserv (US) in May 2020, people consider contactless (tap-and-pay) cards as the fastest and the safest way to pay.


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Opportunity: New mode of information security of users enabled by blockchain


Blockchain is a revolutionary technology that helps businesses develop fast and secure applications that fulfill stringent security requirements. Smart cards can effectively manage cryptographic keys, thereby enabling efficient and secure transactions in blockchain applications. They act as vaults for storing cryptographic keys. When smart cards are connected to the Internet through POS readers, the keys stored in them can be matched with keys stored in online libraries. If the match is successful, users are authenticated. This is expected to help banks and other ecosystem players secure and authenticate the identity of users in an improved manner, thereby reducing instances of cyber thefts.


Challenge: Risen proliferation of digital identity cards


Digital identity cards are the electronic equivalent of identity cards. Unlike paper-based identity cards such as driving licenses and passports, digital identity cards can be authenticated remotely over digital channels. This results in unlocking their access to banking services, government schemes, educational facilities, etc. It is expected that in the next three to four years, mobile devices will serve as digital identity cards to access enterprise services and data.


The technology required by digital identity cards is not only easily available but is also more affordable than ever, making it possible for emerging economies to skip paper-based approaches for identification. There is a growing demand for digital identity cards across the world as governments of different countries are adopting this technology to identify their population and cater to their requirements.