Published: June 2023 | Report Code: 12645 | Available Format: PDF | Pages: 210
The smart card IC market size stood at USD 2,841.2 million in 2022, and it is expected to grow at a compound annual growth rate of 7.1% during 2022–2030, to reach USD 4,929.8 million by 2030. This will be due to the rising usage of financial cards and other secure payment solutions. Additionally, the adoption of smart IDs in educational institutions and e-governance projects is contributing to the growth.
Due to the rising usage of credit/debit cards globally, the demand for integrated circuits in these payment gateways is also growing at a high pace. Their usage has seen an instant growth since the outbreak of the COVID-19 pandemic, as they played a vital role as both a source of credit in emergencies and a payment method, with more transactions than ever occurring online. This was because people were not able to move out of their homes; hence, a lot more consumers applied for new financial cards in 2020 than the year prior for making smooth transactions from home.
Due to the pandemic, the demand for contactless cards also increased as a way to prevent COVID-19 spread. This move was also backed by various financial organizations, such as VISA and American Express. Consumers can pay for things with just a tap, by touching the card on any reader in a hygienic way, without any actual physical contact.
The rising demand for secure payment solutions is one of the key factors due to which the market is growing at a high rate. As the number of e-commerce transactions is increasing, so is the number of frauds and scams. To avoid being a victim of these frauds, more-secure solutions are required, and smart cards are one of these solutions, as they offer more security and confidentiality than other financial information storage or transaction solutions.
They include a tamper-resistant microprocessor, which has a substantial processing power, to protect the information and encrypt and execute instructions from specific programs. They are a safe place to store valuable information, such as private keys, account numbers, passwords, and personal information, which can be verified offline. Smart cards also provide security when a person has to divulge information that they do not want exposed to everyone, such as when using a public or private key.
These instruments also provide secure transactions to visually impaired people, who can become a victim of fraud easily while paying for goods or services. Some smart cards provide voice payment features to give them greater control and make each payment more secure and trusted. They can be paired with smartphones, which can vocalize the transaction details for the impaired person with just one tap.
Report Attribute | Details |
Historical Years |
2017-2022 |
Forecast Years |
2023-2030 |
Market Size in 2022 |
USD 2,841.2 Million |
Revenue Forecast in 2030 |
USD 4,929.8 Million |
Growth Rate |
7.1% CAGR |
Report Scope |
Market Trends, Drivers, and Restraints; Revenue Estimation and Forecast; Segmentation Analysis; Impact of COVID-19; Companies’ Strategic Developments; Market Share Analysis of Key Players; Company Profiling |
Segments Covered |
By Type; By Application; By Architecture; By Interface; By End User; By Region |
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In the end user segment, the telecommunications category held the largest share in 2022. This is due to the use of integrated circuits in subscriber identity modules, driven by the rising smartphone adoption. Companies are not only providing prepaid and postpaid SIMs but also the pay-as-you-go variants with little paperwork, which makes it easier for consumers to access these cards. Further, various initiatives are being taken by the government of different countries to connect people in rural areas with the internet or mobile phones.
The government category in the end user segment is expected to grow at a significant rate in the forecast period. This is due to the increasing usage of smart cards in various documentation equipment, such as chip-embedded IDs, passports, and driver’s license. This is because they are more secure due to the usage of various encryption algorithms in their security systems. Various countries, such as the U.S., are identifying these cards as an appropriate technology for identity applications that must meet critical security requirements. The Federal Government is also specifying smart cards in new identity programs for citizens and transportation workers. Because of this successful implementation of smart cards in the U.S., other countries, including India, Singapore, Jamaica, Barbados, and The Bahamas, are also looking at them as an identity proof, health card, and other platforms.
In the interface segment, the contactless category is growing at a high rate. This is due to the increasing usage of these cards in various organizations and educational institutions as an access control device. They are used in biometric systems as they transmit data from only one direction and do not require the internet to process. Moreover, due to the COVID-19 pandemic, many organizations shifted to contactless smart cards, as they are a more-hygienic option compared to touch-based biometric technologies, such as palm geometry and fingerprint recognition.
These devices are also being used in financial applications as vendors are providing credit/debit cards with the one-touch payment facility, in which the user just has to tap the card on a screen or any other device to make the payment. Following the tap, the transaction and other information needed to complete the transaction are authenticated automatically.
The contact-based category held the largest share in the market in 2022. This is due to the burgeoning usage of ICs in smart SIMs, financial cards, and many more such instruments. These devices help in the identification and authentication of the user with the help of the contact-based technology, which reads the data encrypted in these cards. Contact-based debit and credit cards are already widely popular, with many large BFSI companies, such as Visa, Mastercard, American Express, and UnionPay, providing them for secure and fast transactions.
APAC is expected to advance at a high rate in the forecast period, due to the rapid urbanization and industrialization in the region. Additionally, the rapid adoption of new technologies in the telecommunications, BFSI, and healthcare sectors is propelling the integration of integrated circuits in smart cards. In addition, the number of SIMs being used in the region is increasing at a high rate, which will contribute to the industry’s growth.
Moreover, since the COVID-19 pandemic, people in the region have understood the importance of online or cashless transactions, due to which the demand for smart financial cards is increasing. Essentially, due to the presence of many major players, the APAC region contributes the highest revenue to the global market.
The region will be dominated by China, followed by South Korea, Australia, Japan, and India. In developing countries, including India and Malaysia, governments are implementing many policies for increasing the usage of connected infrastructure, the internet, and online/cashless transactions. Due to such initiatives, the number of online transactions continues to surge, which impacts the smart card IC market in a positive way.
On the basis of type, the microcontroller category held the largest share in 2022, and it is expected to lead the market in the forecast period, as these chips offer greater memory storage and security to data compared to the traditional magnetic-stripe cards. Moreover, these chips allow for improved cryptographic security and extended usability. In this regard, the increasing use of financial and biometric ID cards globally is contributing to the dominant share of the microcontroller category in the market.
There are various standards implemented by governments to encourage the usage of smart cards. In the U.S., for instance, the Health Insurance Portability and Accountability Act (HIPAA) includes standards for implementing a secure electronic health transaction system. Smart cards are governed by the requirements of the HIPAA pertaining to data security and patient privacy.
Moreover, the International Organization for Standardization has implemented several standards for such products, such as ISO/IEC 14443, which relates to the contactless smart cards used in transit, financial, and access control applications, electronic passports, and in the FIPS 201 PIV card. Due to these standards, the regulations for the design and usage of these integrated circuit-based instruments are becoming standardized, which is driving the demand for these cards globally.
This fully customizable report gives a detailed analysis of the smart card IC industry from 2017 to 2030, based on all the relevant segments and geographies.
Based on Type
Based on Architecture
Based on Interface
Based on Application
Based on End User
Geographical Analysis
The market for smart card ICs valued USD 2,841.2 million in 2022.
Contactless payment solutions are a key opportunity in the smart card IC industry.
ID cards are growing as an application in the market for smart card ICs.
The interface segment of the smart card IC industry is dominated by the contact-based bifurcation.
The APAC market for smart card ICs is growing rapidly.
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