Global Contact Smart Card and Security Chip Market

MARKET SCOPE:

The global Contact Smart Card and Security Chip market is projected to grow significantly, registering a CAGR of 6.3% during the forecast period (2024 – 2032).

A contact smart card is a type of plastic card embedded with an integrated circuit (IC) chip and metal contacts. The IC chip, often referred to as a security chip, contains data and processing capabilities, allowing the card to store and process information securely. The metal contacts on the surface of the card facilitate communication between the chip and a card reader when the card is physically inserted into the reader. This physical contact provides a secure means of data transfer and authentication. The increasing emphasis on data security and the need for secure authentication methods in various industries drive the demand for contact smart cards. The embedded security chip enhances the overall security of transactions and access control systems. The adoption of EMV (Europay, Mastercard, Visa) technology in payment systems has led to a widespread demand for contact smart cards. These cards with security chips provide a more secure alternative to traditional magnetic stripe cards.

MARKET OVERVIEW:

Driver: Transition to EMV technology is driving the market growth.

The global shift towards EMV (Europay, Mastercard, Visa) technology in payment cards has driven the demand for contact smart cards. The embedded security chips in EMV cards enhance transaction security by generating unique codes for each transaction, reducing the risk of counterfeit card fraud. EMV technology significantly improves transaction security by replacing traditional magnetic stripe cards with contact smart cards. The embedded security chip in EMV cards generates dynamic authentication codes for each transaction. This dynamic authentication makes it challenging for fraudsters to clone cards and conduct counterfeit transactions. One of the primary objectives of transitioning to EMV technology is to combat counterfeit card fraud. The static data stored on magnetic stripes is susceptible to skimming and cloning, allowing criminals to create duplicate cards. The dynamic authentication codes generated by the security chip in contact smart cards mitigate this risk, making it more difficult for fraudsters to replicate cards.

Opportunities: Growing emphasis on security is anticipated for the market growth in the upcoming years.

Growing concerns about data security and identity theft have led to an increased emphasis on secure authentication methods. Contact smart cards, equipped with security chips, provide a reliable and secure means of accessing sensitive information, making them essential in industries such as finance, healthcare, and government. With the rise in cyber threats, data breaches, and identity theft incidents, organizations across industries prioritize robust security measures. Contact smart cards with embedded security chips offer a high level of protection against unauthorized access and data compromise. In industries where verifying and safeguarding personal identity is critical, such as finance, healthcare, and government, contact smart cards play a vital role. The combination of physical authentication (card insertion) and secure chip technology enhances the reliability of identity verification processes. The financial sector faces constant threats from fraud and cybercrime. Contact smart cards, particularly those adhering to EMV standards, provide secure means for conducting financial transactions. The security chip generates dynamic authentication codes for each transaction, reducing the risk of card cloning and fraudulent activities.

COVID IMPACT:

The pandemic has accelerated the adoption of contactless technologies, including contactless smart cards and mobile payments. The desire to minimize physical contact and promote hygienic practices has led to increased interest in contactless payment methods, potentially affecting the demand for traditional contact smart cards. With a heightened focus on touchless transactions, there has been a surge in the use of mobile payments and digital wallets. While these technologies may not directly replace contact smart cards, they contribute to the broader trend of reducing physical contact during transactions. The use of contact smart cards in payment transactions has been affected by changes in consumer behavior and preferences. Some individuals may be more inclined to use contactless payment methods over traditional card-insertion methods to minimize the risk of surface contact. Like many industries, the smart card and semiconductor sectors have faced challenges related to global supply chain disruptions during the pandemic. Delays in manufacturing, transportation, and logistics could impact the availability of components, including security chips. The increased adoption of remote work during the pandemic has highlighted the importance of secure access control. Security chips and smart cards play a role in secure authentication for remote access systems. The emphasis on cybersecurity and secure remote access may influence demand for related technologies.

SEGMENTATION ANALYSIS:

Contact segment is anticipated to grow significantly during the forecast period

In contact smart cards, the contact segment plays a vital role in facilitating communication with card readers. When the card is inserted into a reader, the contacts on the card make a physical connection with the contacts in the reader, enabling the transfer of data. The physical contact between the smart card and the reader ensures a secure and reliable data transmission process. This method of communication helps prevent unauthorized access and enhances the overall security of the card-based system. Contact smart cards are commonly used in payment transactions, especially those involving EMV (Europay, Mastercard, Visa) technology. During a payment transaction, the cardholder inserts the card into a point-of-sale (POS) terminal, and the contact segment establishes a secure connection for processing the transaction.

BFSI segment is anticipated to grow significantly during the forecast period

In the Banking, Financial Services, and Insurance (BFSI) sector, the use of contact smart cards and security chips has become integral for enhancing security, protecting sensitive data, and preventing fraud. These technologies play a crucial role in various applications within the BFSI industry. One of the primary applications of contact smart cards in BFSI is in payment cards, such as credit and debit cards. The implementation of EMV (Europay, Mastercard, Visa) technology, which involves embedding a security chip in the card, has significantly enhanced payment security by replacing magnetic stripe technology. EMV cards require a chip-and-PIN or chip-and-signature authentication method, making transactions more secure. Contact smart cards with security chips are widely used for secure access control within BFSI institutions. This includes physical access to buildings, data centers, and secure areas. Employees often use smart cards with embedded security chips for secure identification and access.

REGIONAL ANALYSIS:

The North America region is set to witness significant growth during the forecast period.

Smart cards are commonly used in government-issued identification cards, driver's licenses, and secure access cards. In the financial sector, contact smart cards play a crucial role in payment systems, with many credit and debit cards incorporating chip technology for enhanced security. The adoption of global technology standards, such as EMV (Europay, Mastercard, Visa) for payment cards, has driven the widespread use of contact smart cards in North America. The shift to EMV technology has enhanced security by replacing magnetic stripe cards with chip-enabled cards. Contact smart cards are prevalent in access control systems for buildings, campuses, and secure facilities. They are also used for employee identification, ensuring secure access to sensitive areas. The healthcare sector in North America may utilize contact smart cards for patient identification, secure access to medical records, and other healthcare-related applications. Security chips are not limited to smart cards; they are also integrated into various devices and systems for enhanced security. This includes embedded security chips in electronic devices, SIM cards, and other applications where secure data storage and processing are essential.

COMPETITIVE ANALYSIS

The global Contact Smart Card and Security Chip market is reasonably competitive with mergers, acquisitions, and Type launches. See some of the major key players in the market.

Infenion

In 2021, A platform for biometric smart cards with exceptional performance and scalable, affordable manufacturing is announced by Infineon and IDEX Biometrics.

Gemalto NV

In 2019, A scalable, reasonably priced biometric smart card platform has been announced by Infineon and IDEX Biometrics. The world leader in digital security, Gemalto (Euronext NL0000400653 GTO), has been chosen by Bank of Cyprus to provide the first EMV biometric dual interface payment card in history that supports contactless and chip payments. The card is compatible with the nation's already-installed payment terminals and uses fingerprint recognition technology rather than a PIN number to authenticate the cardholder. Customers' fingerprints are scanned and compared to the reference biometric data safely stored in the card when they place their fingerprints on the sensor.

NXP Semiconductors

Samsung

STMicroelectronics

Shanghai Fudan Microelectronics Group Co., Ltd.

Unigroup Guoxin Microelectronics Co., Ltd.

HED

Microchip

Datang Telecom Technology Co.,Ltd.

Nations Technologies Inc.

Giantec Semiconductor Corporation

SCOPE OF THE REPORT

By Type

Contact

Contactless

By Application

BFSI

Government and Utilities

Transportation

Others

By Region

North America (the United States & Canada)

Europe (Germany, UK, France, Spain, Italy, and the Rest of Europe)

Asia Pacific (China, Japan, India, and Rest of Asia Pacific)

Rest of the World (the Middle East & Africa, and Latin America)

KEY REASONS TO PURCHASE THIS REPORT

It provides a technological development map over time to understand the industry’s growth rate and indicates how the Contact Smart Card and Security Chip market is evolving.

The report offers a dynamic method to various factors that drive or restrain the growth of the market and specifies which Contact Smart Card and Security Chip submarket will be the main driver of the overall market from 2024 to 2032.

It renders a definite analysis of changing competitive dynamics and stipulates the leading players and what are their prospects over the forecast period.

It builds a nine-year estimate based on how the market is predicted to grow and shows what will market shares of the global region change by 2032 and which country will lead the market in 2032."
Show more