- Thierry Spanjaard
The end is in sight
What we call now the Secure Transactions industry, which at the core of the ongoing Trsutech event in Paris Porte de Versailles, actually started being called the smart card industry, represented at the Cartes trade show. We have seen it evolve over years, and seen secure software solutions taking always more place than hardware. So shall we still have cards in twenty years from now?
In the mobile communication segment, the die has already been cast with the inception of the eSIM and now the upcoming iSIM wave. Already, SIM cards are only visible to end users when they insert them in their phones. Thus, they no longer significantly convey the brand image of the mobile network operators. With eSIMs and iSIMs, the operator brand image is just a logo on a screen seen once, or just a few times. In a broader sense, one must recognize that even if it overturns the business of many players in the value chain, eSIMs and iSIMs are way more convenient solution for end-users.
In the payment segment, smartphones and NFC will in the mid- and long-term become the most standard payment means at the expense of the traditional banking card. Smartphone equipment already reaches 6.6 billion worldwide, representing 83% of the world population, according to Ericsson & The Radicati Group. Already many issuers issue a payment app and a PAN before being able to deliver a physical card. The card is already useless in eCommerce and mCommerce, the generalization of payment by smart phone will make it redundant in physical commerce as well. NFC is not the only solution, QR codes are already the most standard form of payment in a large part of Asia, and instant payments may represent the best cardless solution for Europe and other parts of the world.
In the mass transit segment, regular cards have given way to a wide array of solutions. The most attractive is the open loop, which consists in using a payment card, or a payment card in the form of a handset app, to pay directly for transport without needing dedicated cards or tickets. Other solution include printed codes, SSM, or dedicated smartphone apps. Digitization leads to the disappearing of the fare media altogether.
The ID document segment requirements make the evolution more complex. As of now, ID documents include a series of physical security features that participate in the security of the system in conjunction with chip based security. However, digital ID projects abound and the dematerialization of some ID documents, at first driving licenses, healthcare cards, etc. Is well under way.
Let us think … If we had to set up solutions from scratch to pay for phone communication, general purchases or mass transit as of now, would we include a secure card in the scheme? If we had to set up a government ID scheme from scratch, would we use physical documents? I’m not sure we would do so now… Now, let’s ask us the same question in 2042… There is no doubt, mobile devices, either in the shape of handsets or with another shape, will bring the solution.
It has taken the industry more than three decades to reach the current production level, around 10 billion cards per year. If we consider we have reached the production peak, how long will it take for the smart card industry to become part of a past history?