Smart card market is anticipated to grow at a considerable CAGR of 7.5% during the forecast period (2024-2031).A smart card is a small, portable computer that is about the size of a credit card. It contains a microprocessor, some memory, and a few applications. They can store large amounts of data, perform on-card functions, and interact with a smart card reader.The growing adoption of these cards owing to the faster transaction times and improved user experience is a key factor driving the global market. However, the high initial investment in smart cards may restrain its market growth. 

Market Dynamics

Emergence of Smart Cities to Drive Smart Card Market

The rising emergence of smart cities is a key factor driving the global market. The growing integration of smart cards in smart cities projects for payment, authentication, loyalty programs, and data storage has driven its global market growth. For instance, in May 2023, under Gujarat’s smart city initiative, the government has been integrating property smart cardsfor sustainable urban development. Property Smart Card is an innovative technology that integrates various services and utilities onto a single smart card. It can also be integrated with other smart city systems to provide valuable data on citizen behavior and usage patterns. Such initiatives are further contributing to the global market growth.

Increasing Deployment in Personal Identification and Access Control Applications

Smart cards with advanced microprocessors and secure elements offer an ideal solution for verifying identities and controlling access to sensitive areas or data. The growing trend of integrating biometrics such as fingerprint scanning, iris recognition, and facial recognition in smart cards has further promoted its demand for identification and access control applications. Smart cards with embedded biometric capabilities add an extra layer of security by binding the cardholder's biometric data to their identification, making it virtually impossible for imposters to gain access. 

Market Segmentation

Our in-depth analysis of the global smart card market includes the following segments by type and end-user industry:

• Based on product, the market is sub-segmented into contact-based and contactless

• Based on end-user industry, the market is sub-segmented intoBFSI, IT & telecom, government, and transportation

Contactless Cards to Exhibit Highest CAGR in the Global Market

Based on the type, the global smart cardmarket is sub-segmented into contact-based and contactless. Stronger onsite security, greater visibility & control, impactful identity management, upgradability and adaptability, and convenient key access are some of the key benefits of using a contactless smart card. The growing adoption of contactless cards owing to their offered benefits is a key factor driving the growth of this market segment. 

Regional Outlook

The global smart card market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia), and the Rest of the World (the Middle East & Africa, and Latin America). 

Favorable Government Initiatives to Promote the Asia-Pacific Smart Card Market

• StartupTN backed by the Tamil Nadu government has launched Smart Card and other new initiatives to meet the needs of aspiring entrepreneurs in the early stage of building their startup.

• Smart Card India, Smart Tag, Smart Card for Shakti scheme, and Smart Card for tourists are some of the key initiatives of the Indian government. 

Global Smart Card Market Growth by Region 2024-2031

North America Holds Major Market Share

Among all the regions, North America holds a significant share owing to the high adoption of smart cards across several end-user industrial verticals. Favorable government initiatives across the US have promoted the high adoption of smart cards across the region. For instance, the US Federal government has standardized smart cards for employee and contractor identification cards. It is also specifying smart cards in new identity programs for citizens, transportation workers, and first responders.

The increasing integration of smart cards in the military and defense sector is another propellant for high sales of smart cards in the US. For instance, the US Department of Defense (DoD) has adopted the Common Access Card (CAC). It is a smart card that serves as the DoD standard identification for active duty military personnel, selected reserve personnel, civilian employees, and eligible contractor personnel. A large consumer base and the presence of major smart card manufacturers in the US have resulted in a strong demand for smart cards in the region which has made a significant contribution to the regional market share.

Market Players Outlook

*Note: Major Players Sorted in No Particular Order.

The major companies serving the global smart card market include Bundesdruckerei GmbH, CardLogix Corp., Watchdata Technologies Pte Ltd., IntelCavTecnologia e Cartões, and Securakey, among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market. For instance, in January 2022, Nayax signed a “binding term sheet” to acquire On Track Innovations, a smart card technology company. This acquisition is a critical step in Nayax’s strategy to increase market share in targeted areas and accelerate its growth possibilities in countries like Japan.

The Report Covers

• Market value data analysis of 2023 and forecast to 2031.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global smart card market. Based on the availability of data, information related to new product launches, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.