Attention focus is sometimes different from the reality. While most of the secure transactions industry analysts keep on dreaming about NFC payments, talking about invisible payments, elaborating on enrolment solutions, anticipating embedded SIMs for consumers, focusing on dematerialization, … smart card sales are still making the bread and butter of our industry.
In its latest forecast publication, Eurosmart, the Voice of the Digital Security Industry, anticipates smart card shipments for 2018 to pass the 10 billion units mark for the first time in history.
In 2017, shipments grew 3.6% but with an uneven growth rate across segments. SIM cards and payment cards still account for more than 85% of total shipments. For SIM cards, Eurosmart records a 2.75% growth 2017 vs. 2016 but anticipates the market to be flat in 2018. Contrarily, payment cards have grown 3.45% in 2017 vs. 2016 and are expected to keep growing 5% for 2018 vs. 2017.
The “device manufacturers” segment, which Eurosmart defines as “Original Equipment Manufacturers of mobile phones, tablets, navigation devices and other connected devices without SIM application (Embedded Secure Element without SIM application)” is the only one going through a double-digit growth, from 330 million units in 2016 to 400 million units in 2017 and to 470 million in 2018 forecast. The combination of the anticipated flat market for SIM cards with the fast growth in embedded secure elements is the best indication of the ongoing change in the telecom market and a shift to embedded security functions. Stefane Mouille, Eurosmart Chairman says, “embedded secure elements (…) now represent the 5% of the global market.”
Eurosmart insists the shift to contactless in payment, transit and eID cards is a major evolution in the smart card market. Already 2 billion units were shipped in 2017 and the industry association anticipates a 5% growth for 2018 to 2.1 billion. More specifically, thanks to Visa and Mastercard dual interface mandates in various regions, the part of global contactless payments is expected to amount to 47,6% (1.5 billion units) of the total market of financial services in 2018, according to Eurosmart.
Even if the market is more competitive than before, with a larger number of card vendors driving down margins, the smart card market remains at the center of the secure transactions industry. The current positioning of the three market leaders Gemalto, Idemia and G+D is a delicate balance between industrial activities focused on delivering billions of secure objects for the best possible price with a strong marketing focusing on all new developments in the industry, including secure digital ID, biometrics, subscription management, identity management, or still emerging features such as Motion Code.