Smart Card Market To Reach USD 26.2 Billion By 2032

The surge in popularity of contactless payments has emerged as a significant driver in the smart card market. According to a report by the European Central Bank, the number of contactless card payments initiated at physical electronic points of sale rose by 24.3% compared to the first half of 2022, reaching 20.9 billion transactions, with a corresponding total value increase of 25.9% to €0.5 trillion.

Moreover, governments and financial institutions worldwide actively promote contactless payments, further boosting the demand for smart cards in the coming years. For instance, the U.S. Department of the Treasury has endorsed the use of contactless payments as a means to curb the spread of viruses.

The Internet of Things (IoT) rapid expansion has brought new avenues for the smart card market. Smart cards play a vital role in enhancing the security of IoT devices and networks through robust authentication and encryption features. With the global IoT market projected to reach USD 1.1 trillion by 2024, encompassing over 55 billion connected devices, the demand for secure smart card solutions is anticipated to rise. As IoT applications proliferate across diverse sectors such as healthcare, manufacturing, and transportation, smart cards can be employed for secure device provisioning, firmware updates, and data protection, ensuring IoT ecosystems' integrity and confidentiality.

In 2023, the contactless smart card sub-segment held the largest market share. The widespread adoption of contactless payment solutions, driven by the COVID-19 pandemic and the increasing popularity of touch-free transactions, has significantly contributed to the dominance of contactless smart card.

The banking segment is expected to hold the largest market share. The increasing adoption of smart card for secure financial transactions, such as credit and debit card, has significantly driven the growth of the sub-segment.