In the wake of softening growth in other primary smart card areas, most
notably SIM cards, payment card issuance continues its upward growth
trajectory. Despite near ubiquitous global uptake of the EMV standard,
several factors are stimulating the payment cards market such as new
banking clients, increasing wealth in developing areas, and contactless
migration. Other factors include new innovations in card form factors,
such as metal cards, and powered payment cards that incorporate
biometric sensor technology. The net effect is driving EMV payment card
issuance from 3.18 billion in 2019 to over 3.75 billion by 2023,
according to ABI Research, a market-foresight advisory firm
providing strategic guidance on the most compelling transformative
technologies.
Interestingly, between 2017 and 2018, there was a significant slowdown
in contactless migration, driven by stagnation in the key contactless
market, China. However, other regional markets are set to reverse the
decline in 2019.
“A significant push by the Reserve Bank of India, such as the release of
contactless tokenization guidelines, and India’s Finance Ministry
advising banks and financial institutions to begin issuing
contactless-enabled credit and debit cards have already paid dividends.
The Indian market reacted well, particularly in Q4 2018, where it was
estimated that near 10 percent of all cards issued were of the
contactless variety,” explained Phil Sealy, Research Director at ABI
Research.
For the United States, the “Chase effect” (referring to other issuers
following Chase’s lead in contactless migration) is now in full swing.
This momentum is expected to continue, with U.S. issuers likely adopting
a targeted migration approach by selecting parts of their respective
portfolios for contactless migration and/or adopting a regional approach
heavily linked to cities. For instance, in New York, contactless card
marketing is being timed with transit system migration accepting
open-loop payment credentials.
ABI Research forecasts that contactless issuance in the United States
and India combined will grow from 200 million in 2019 to 609 million in
2023. “Despite the positivity’s of ongoing migration to contactless
cards, continued ASP degradation in the traditional market is hitting
vendor bottom lines. This is causing a shift in strategy toward the
development of higher-value propositions to help counter reducing
margins,” Sealy said. Leading ecosystem players including Gemalto,
IDEMIA, G+D, CompoSecure, Fingerprint Cards, IDEX, Kona, Linxens, NXP,
Infineon, STMicro, Precise Biometrics, and Next Biometrics already have
solutions and products in place to take advantage of this
next-generation revenue/margin opportunity.
Metal cards and biometric payment cards continue to gain momentum. Metal
cards are already shipping in the millions within the U.S and the Middle
East. The announcement by Fingerprint Cards’ in March 2019 for its first
large-scale order of a few hundred thousand flexible sensors is another
sign supporting continued biometric card growth. “Form factor innovation
is just one example of card supplier strategies pivoting from market
share maintenance/growth towards the supply of high- value cards to help
improve otherwise declining margins,” Sealy concluded.
These findings are from ABI Research’s Payment
& Banking Card Technologies market data report and Payment
& Banking Card Secure IC Technologies market data report. These
reports are part of the company’s Digital
Security research service, which includes research, data, and
Executive Foresights. Market
Data spreadsheets are composed of deep data, market share analysis,
and highly segmented, service-specific forecasts to provide detailed
insight where opportunities lie.
About ABI Research
ABI Research provides strategic guidance for visionaries needing market
foresight on the most compelling transformative technologies, which
reshape workforces, identify holes in a market, create new business
models and drive new revenue streams. ABI’s own research visionaries
take stances early on those technologies, publishing groundbreaking
studies often years ahead of other technology advisory firms. ABI
analysts deliver their conclusions and recommendations in easily and
quickly absorbed formats to ensure proper context. Our analysts
strategically guide visionaries to take action now and inspire their
business to realize a bigger picture. For more information about
subscribing to ABI’s Research Services as well as Industrial and Custom
Solutions, visionaries can contact us at +1.516.624.2500 in the
Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific or
visit www.abiresearch.com.
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