2021: 4.35 bn SIMs and 2.6 bn payment cards – Crisis? What crisis?
While the economic world is increasingly talking about recession, while inflation is on everyone's lips, while increase of base rates is frightening the business community, while shortages impact our activities, our industry seems to be continuing to thrive in spite of the adverse economic conditions.
Trusted Connectivity Alliance (TCA), which has been replacing SIMalliance already for a few years, has just published its market data for 2021. According to the industry association, the total available SIM market globally in 2021 was 4.35 billion units, but volumes have been affected by the ongoing chip shortage. At the same time, TCA points out that the transition to eSIM is ongoing, as 337 million eSIM have been shipped by TCA members in 2021. Also, eSIM profile transactions, i.e. the number of times a mobile network operator profile was downloaded to a device, rose by 54% in 2021. According to TCA, Automotive and IoT use-cases are the key markets driving eSIM adoption and eSIM platforms are now operational at all major Tier 1 and Tier 2 operators.
On the other main segment of the industry, Smart Payment Association (SPA) just released its figures for 2021. According to SPA, the smart payment cards market keeps on growing with 2.63 billion smart payment cards and modules delivered in 2021, a 5% growth vs. 2020. Contactless cards accounted for 76% of all shipments (vs. 69% in 2020 and 59% in 2019) hitting the 2 billion threshold for the first time. SPA also mentions that almost 100 million eco-friendly cards were shipped in 2021.
Also, focusing on payment, EMVCo reports that at the end of 2021, 12 billion EMV chip cards were in circulation globally, representing a 1.1 billion increase compared to 2020. According to the industry association, 68% of all issued cards are EMV-enabled. EMVCo also reports that 90% of all card-present transactions conducted globally used EMV chip technology, and provides a regional breakdown that shows that regions lagging behind on this aspect are the United States with only 82% of EMV card-present transactions and Asia Pacific with 83%. Unsurprisingly, these are also the regions where EMV adoption rate remains low with 63% in the US and 63% in Asia Pacific.
However, our industry is suffering from shortages in semiconductors and other components. According to The Nilson Report, card prices have been rising by 5% in 2021, a trend that is expected to continue in 2022, with a forecasted 20% increase. According to Payments Dive, an August 2021 ABI Research report said that as many as 1 billion payments cards were at risk of not being made over an 18-month period because of chip shortages.
So while new technologies including iSIM in telecoms and alternative payment methods such as bank transfers, digital wallets and BNPL (Buy Now Pay Later) are gaining significant ground on the market, our card industry is still doing well. New conditions of the period include chip shortages that are, to a certain extent, compensated by price increases. We will all wait eagerly for the results of year 2022 to see how this translates into balance sheets and income statements for secure transaction industry players.