Smart Card Shipments Could Rise 17% in 2012: Eurosmart

Vendors’ smart card shipments could reach 7 billion next year, up 16.7% from 6 billion this year, fueled primarily by strong smart card growth in Latin America and China, vendor trade group Eurosmart announced today at the Cartes & IDentification conference in Paris.

If present trends driving development of Near Field Communication technology in payment and transportation channels continue, as much as 25% of all bankcards shipped worldwide in 2012 are likely to have a dual contact or contactless interface, Marc Bertin, chairman of Brussels-based Eurosmart, said in a press release.

NFC growth is on track to be “strong” next year, but significant market expansion will depend on banks and multinational organizations “aggressively marketing” NFC applications and leading handset manufacturers including NFC in all new smartphones, Bertin said.

Total NFC device shipments will rise 50% next year, to 120 million from 80 million this year, Eurosmart predicts.

India is poised to be “the next big country” to migrate to the EMV smart card standard for payments and “potentially the U.S. in the long term,” Bertin said, alluding to recent U.S. smart card market activity. Visa Inc. in August announced incentives for merchants that adopt contactless payment. Several large U.S. banks this year also began issuing EMV cards to its cardholders who travel abroad.

Banking and retail smart card applications next year will reach 1.2 billion, up 20% from 1 billion this year, propelled by robust growth in China and Asia, Bertin forecast.

The proportion of contactless cards within the smart card segment will continue rising next year, Bertin said. Contactless card shipments in 2012 will increase 26.1%, to 580 million from 460 million this year, he predicted.

The smart card industry is closely watching “multiapplication success” stories as bellwethers for future growth, Bertin said. So far, the most promising of such applications combines payments and transportation services, or they combine payments with access to offices or hotel rooms, he said. Moreover, in the smart card industry there is now “a clear trend of multiapplication contactless cards combining two or more” features such payment, transportation services, identification and social benefits, Bertin said.

Security is a growing concern in smart card applications, forcing recognition that devices equipped with microchips and NFC functions are personal objects containing personal data. As such, they are open and subject to attacks, malicious applications and viruses. The devices also are executing a growing number of sensitive services.

Despite those challenges, improvements in security “should not come at the expense of convenience” to continue driving further industry development, Bertin warned.

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