- Thierry Spanjaard
Will the smart card peak happen in 2020?
For a few years already, we are experiencing an evolution towards less cards and more online solution for all kind of needs. This phenomenon is present in every smart card segment, but one may wonder if it already affects significantly the smart card volumes. In other terms, have we passed the smart card peak or are we going to pass it in 2020?
The telecom market has been for long the cash cow of our industry. However, the combined effects of decreasing margins and lack of anticipable growth are driving leaders out of this market. Subscriber authentication is evolving from the detachable SIM to the embedded SIM, a change that will not only account for a lot less volumes but also totally change the value chain. However, most analysts will agree that the evolution from detachable to embedded SIM has not been as fast as expected. Detachable SIMs still represent huge volumes; however, the Tier 1 vendors no longer enjoy the dominant position they may have had in the past, benefitting many Tier 2 vendors.
In the banking card segment, alternative solutions to smart cards are increasingly present: online transactions, Pay apps based on NFC in a part of the world and on QR codes in another part and all kinds of Fintech innovations make our smart cards look a bit bland. But in the field of payment, the total replacement of one type of payment means by another type had never been experienced: we still use barter trade and gold. Pay apps, regardless whether they are NFC-based or QR-code based generally come as a combination with payment cards. At the same time, the payment card business is always becoming more complex, with the growth of heavy cards and metal cards with additional features. These factors together mean the demand in smart payment cards is not bound to weaken this year
The ID segment is more project-driven than evolving along a smooth and anticipable curve. Projects have never been so numerous! Many countries are finally combining their traditional plastic based ID with Digital ID leading to issuing more smart ID documents than ever.
The transport segment is bound by a huge infrastructure cost and low expense flexibility to invest in payment systems. Consequently, it is just reaching the conclusion of a past era with the end of magstripe tickets in their last major markets New York and Paris. In transport too, apps are bringing new flexibly and new features, but smart cards and smart tickets are still on their way to a brilliant future.
There is no doubt that in the long term, online apps and alternative technologies will threaten the smart card, but this will probably not happen in 2020!