NanoMarkets Issues New Report on Powered Smart Cards Market, Sees $1.5 billion market in 2017

Industry: Market Research

Report includes eight-year forecasts both in volume and value terms, as well as market forecasts for powered smart cards by application and by region.

Glen Allen, VA (PRUnderground) December 2nd, 2014

The total market for powered smart cards will rapidly expand from slightly under $300 million today to more than $1.5 billion by 2017, $4.6 billion by 2019, and more than $13 billion by 2021, according to a new report from industry analyst firm NanoMarkets. Details of the new report, “Powered Smart Card Markets 2015-2022” including a downloadable excerpt, are available at: http://nanomarkets.net/market_reports/report/powered-smart-card-markets-2015-2022

About the Report:

Powered smart cards are designed to deliver new functionalities, or combinations of existing ones, that conventional smart cards cannot fulfill that necessitate an onboard thin-film or printed battery to accomplish. Usually (though not always) this means a display, and potentially other capabilities such as biometric sensing, lights, and sound.

This report identifies the main ways that money will be made in the powered smart card business over the next decade, and profiles the key trends in this sector over the past two years and projecting over the next eight years (to 2021). We explore the pull for powered smartcards for various end-use cases, which continue be mostly focused on one-time password (OTP) verification for consumer financial transactions, with some improvements in features and customizations. We also discuss the development of components, especially displays and batteries. We include eight-year forecasts of all these items, both in volume and value terms, as well as market forecasts for powered smart cards by application and by region.

Companies discussed in this report include:  American Express, Blue Spark, Bundesdruckerei, China UnionPay, Coin, ComCard, Cymbet, Dynamics, E Ink, FlexEl, Gemalto, Hierstar, Imprint Energy, Infineon Technologies, Jinco, MasterCard, Morphos, Mt. Gox/Bitcoin, Oberthur/NagraID, Omne, PayPal/eBay, Plastc, Powered Card Solutions, Stratos/Protean, Rocket Electric, SmartDisplayer, Solicore, STMicroelectronics, Visa, and X-Core Technologies.

Highlights from the Report:

Almost exclusively powered smart cards have been targeted at one-time password (OTP) functionality to provide an extra security layer during consumer financial transactions, and that has been the envisioned golden goose for this technology. Other potential applications such as secure identification (public and private sectors) and medical information continue to tantalize, but have yet to approach anything that would present significant alternative markets.

What we are now seeing is a growing realization that while “EMV” smart-card chip/PIN standardization (named for the widely adopted Europay-MasterCard-Visa standard for credit and debit payment cards) has largely been effective at that, it has also led to a shift in fraudulent activity toward “card-not-present” transactions, mainly e-commerce. Here is where we see the arrival of proposed new solutions that swing wide open the doors for powered smart card adoption.

Below are six key trends we highlight in our new report:

–  Beyond EMV:  Powered smart cards that can generate a secure password are gaining favor. The newest example receiving market acclaim: a dynamic card verification value (CVV), seen as the next evolution of OTP.

U.S. and China coming on strong:  Roughly 80 countries are in various stages of EMV chip migration, but the U.S. is about to shift to an EMV infrastructure by late 2015, which could prove a shot in the arm for powered smart cards. Meanwhile, China has seen very little EMV penetration but represents a huge market, especially with the clout of state-backed China UnionPay which dwarfs the other major global issuers.

Costs within market grasp:  Manufacturing costs are reported to be quite close to the perceived magical number of $5-$7 per card, which is supposedly what card issuers would be willing to pay to convert from cheaper smartcards, weighed against security risks and liabilities.

Moment of validation:  We believe the recent acquisition of NagraID by Oberthur could represent the tipping point for other powered smart card suppliers, indicating that the market is now ready to ramp up. Furthermore, many new powered smart-card entrants are said to be close to finalizing certification with major banks and issuers in the U.S.

Smartphones and OTP:  Arguably the use of mobile phones for OTP, in which secure passwords are sent to a user’s mobile device — often as a free service — represents potentially a significant competitive threat to powered smart cards. However, we now believe these fears may be overblown due to security concerns and a lack of visibility in true costs.

Technology updates:  On the battery side, this is still largely a one-player market led by Solicore whose technology combines some of the virtues of both printing and coating, though other firms appear to be pursuing this market. On the display side, E Ink and e-paper continue to be invoked. We also are hearing more about we once thought weren’t as viable options for this application: LCD and LED displays.

 

About NanoMarkets

NanoMarkets tracks and analyzes emerging markets in energy, electronics and other area created by developments in advanced materials. Visit www.nanomarkets.net for a full listing of NanoMarkets’ reports and other services.

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