The Smart Card Market size is estimated to be USD 13.9 billion in 2021 and projected to reach USD 16.9 billion by 2026, at a CAGR of 4.0% during the forecast period.

Increase in the demand for contactless card (tap-and-pay) payments amid COVID-19, proliferation of smart cards in healthcare, transportation, and BFSI verticals; and increased penetration of smart cards in access control and personal identification applications. These factors will drive market growth through the end of the forecast period. Moreover, surged benefits offered by smart cards in form of multifunctionality and flexibility; and easy access to e-government services and risen demand for online shopping and banking will drive the demand of smart cards in the near future.

A few of the key players in the smart card market are Include Thales Group (France), IDEMIA (France), Giesecke + Devrient GmBH (Germany), CPI Card Group (US), HID Global Corporation (US), Watchdata (China), Eastcompeace (China), Inteligensa (US), ABCorp (US), and CardLogix (US) are among the major players in the smart card market.

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The contactless segment to account largest market share during the forecast period owing to rising need for tamper-resistant systems.

In order to communicate with readers, a contactless smart card incorporates a smart card secure microcontroller or equivalent intelligence, internal memory, and a small antenna. Near-field communication (NFC) or radio frequency identification (RFID) are primarily used for contactless smart cards. As a result of COVID-19, the World Health Organization (WHO) and many governments around the world are advocating the use of contactless smart cards for a variety of purposes to ensure social distancing to contain the spread of the disease. Users benefit from the ease, speed, and convenience of contactless smart cards. Due to its ability to facilitate safe and secure transactions without physical contact, the contactless interface has become highly relevant in the current COVID-19 environment, especially for payment applications.

Telecommunications segment likely to hold largest share in the smart card market during the forecast period due to Increasing penetration of high-end SIM card technologies

Microcontroller-based smart cards such as subscriber identity modules (SIMs), are used in mobile phones and other devices that require identification. In a wireless cell phone network, a SIM identifies and authenticates subscribers. The telecommunications segment dominated the smart card market in 2020 with highest market share. Mobile networks are expanding globally and their infrastructure is improving, boosting market growth. In addition, COVID-19 led to a higher demand for connectivity. During the current economic crisis, the trend of digitalizing business and private communication has gained momentum, along with the generalization of digital conferences. The growth of the mobile SIM card market in the coming years is expected to be boosted by the penetration of high-end SIM card technologies, such as LTE, 5G, M2M, and SWP.

Europe to account for the second largest share of the smart card market by 2026

Europe has witnessed rapid adoption of state-owned healthcare and health insurance systems than the most developed countries across the world. The European Commission has mandated the use of cards as a replacement to E- 111 paper forms for cross-border healthcare services, which has led to the growth of the smart card market in Europe. The region comprises economically and technologically advanced countries, such as the UK and Germany. The UK, France, and Germany are the major markets for smart cards in Europe. The increasing circulation of smart cards and terminals by card companies, such as Visa and MasterCard, has led to a growth in total spending in these countries.

Government initiatives for electronic identity (e-ID) card schemes are expected to propel the Government and Healthcare vertical to grow at the highest CAGR in the coming years in Europe. Due to a rise in identity fraud cases, European governments have mandated the use of National Identity Card for citizens. For instance, in the UK, in 2019, identity fraud cases reached 223,163. Therefore, it is expected to increase the adoption of smart cards in the coming years in Europe.