Report: World smart card market boom coming

Apr 3, 2006 3:36 PM

Successful projects around the world, such as transit and ID programs, along with advances in the U.S. payments market, are stirring up world interest in the contactless smart card market, research firm Frost and Sullivan reports.
Lessons learned and flourishing use of contactless cards in some countries are also giving confidence to other regions to follow suit.
In March 2005, MasterCard International and Visa International announced that they had reached an agreement to use a common communications protocol for contactless payment cards and devices. This is expected to increase and ensure interoperability between contactless payment cards and devices. The use of a common protocol for conducting contactless payments will enable vendors to streamline product development and testing, leading to reduced implementation costs and faster time to market for financial institutions and merchants. With a common protocol in place, merchants are expected to have the assurance that a single point of sale terminal may support multiple payment brands, and would require less time for terminal programming and testing.
In 2004, the total unit shipment for the world contactless smart card market was 150.56 million units. Frost and Sullivan predicts that number to reach 1.17 billion units by 2010.
"As the dominant areas of use in contactless smart cards become more established areas such as banking, government, telecommunications and security, people will realize that the benefits of contactless are far reaching," says Frost and Sullivan research analyst Michelle Foong. "Other areas like medical, gaming and emergency services are starting to look into the use of smart cards to fill the need for security, volume and speed in their sectors.
"For example, in healthcare and emergency services, medical personnel need to be identified in an instant to ensure an efficient flow of medical services," Foong adds.
National IDs and passports are areas of massive implementations, where places such as the United States, China and Europe have sufficiently large populations to generate demand for contactless technology.
Other agencies relating to defense, transit and government services are pushing for contactless rollouts to cope with security and efficiency needs.
Progress in national IDs and passports in countries that were previously not as technologically advanced as first world countries are showing that the educational barriers have come down significantly in places such as China, Brazil, Macedonia, Malaysia and Thailand. Unlike other technological advances, some of the more advanced countries are learning from the experiences and successes of these countries before they take the leap themselves.
"Consumer rights groups and privacy concerns in more advanced countries continue to slow down the growth in some areas," Foong says. "Especially with national ID cards involving the government and the use of biometric features for security needs, this area needs to be addressed to prevent potential lawsuits and human/consumer rights violations."
To order "World Contactless Smart Card Markets," visit www.frost.com/.

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