The growth of the mobile commerce (mCommerce) and eCommerce industries is fueling the global smart card industry, which is expected to grow at a compound annual growth rate (CAGR) of 8 percent through 2020, according to a new research report.
“The growth of mCommerce and eCommerce have accelerated the demand for secure payment options and improved the demand for smart cards,” according to the report by Technavio. “Loyalty cards offered by retail stores contain the information of customers and points earned by them through purchases. All such factors are expected to drive the market during the forecast period.”
The report breaks the smart card market into the following segments: telecom, which breaks down to 61.06 percent of the total market; payment card manufacturers, which account for 20.25 percent of the market; government at 4.43 percent; device manufacturers at 3.83 percent; and transportation at 2.26 percent.
“Many of the American users are shifting from magnetic stripe cards to EMV chip-enabled cards because of growth of the mCommerce industry,” according to Sunil Kumar Singh, a lead analyst at Technavio. “To remain competitive, vendors need to penetrate unfamiliar markets, meet changing customer needs and respond to changing market scenarios. These factors are responsible for the rise in eCommerce websites.”
According to the report, emerging markets, like China and India, are fueling the growth in mobile and online commerce, which is expected to increase at a CAGR of 10.4 percent through 2020.
Payment card manufacturers are expected to grow at a CAGR of 8.87 percent over the same period, with consumers embracing the adoption of smart cards because they are more durable than magnetic stripe cards, less prone to damage and more secure than magnetic stripe cards that can be hacked remotely.