The scope and advantages of using smart cards in the current banking and finance industry are massive. The primary aim of implementing smart card technologies, especially in developed economies, is the introduction of stronger security measures against the growing counts of data theft. The retail and BFSI industries have shown a high demand for smart cards as a feasible security measure.
Contact Smart Cards Will Retain Leading Market Revenue Share
The global smart cards revenue generation is expected to expand at a CAGR of 7.4% within a forecast period from 2016 to 2023. This market is expected to be valued at US$8.5 bn by the end of 2016 and US$14.1 bn by the end of 2023.
Improved Security Emerges as Most Wanted Smart Card Feature in BFSI and Retail Industry
Conventional magnetic strip smart cards are currently extremely vulnerable to data theft threats due to the absence of proper encryption codes between the hacker and a user’s personal financial data. This is easily negated by smart cards, where the EMV chip-on-chip feature adds a high level of security to the user’s data.
Free PDF Brochure Can be Downloaded at http://www.transparencymarketresearch.com/sample/sample.php?flag=B&rep_id=844
Additionally, the advent of NFC, IoT, net banking, and ecommerce have all contributed to the growing preference of smart cards across the world. The use of NFC and IoT is contributing vastly to the more efficient implementation of smart cards, while the booming ecommerce industry is making it imperative for banks to employ stronger security measures against data theft.
EMV chips are rapidly becoming the global standard for user financial access and transactions. They offer a safer way for users to perform all transactions in the modern scenario of possible threats to data and the protective measures that can be taken.
High Adoption Cost Continues to Make Vendors Hesitate from Smart Card Tech
“A large percentage of consumers still use magnetic strip cards for their daily transactions,” states a TMR analyst. “The U.S., for instance, had delayed their nationwide adoption of EMV smart cards, allowing a longer window of time for hackers and fraudsters to gain access to all the information stored in a user’s magnetic strip card.” Currently, about 130 countries are officially implementing the use of smart cards and replacing magnetic strip cards.
The problem that applies especially to traders and banks in developing nations is the high implementation cost associated with smart card technologies. From the perspective of traders and vendors, the high initial cost of installing EMV terminals is not worth it until they receive a confirmation from major banks over the use of smart cards on a large scale. Until then, they will stick to magnetic strip card terminals. At the same time, banks were pushing the responsibility on to the vendors, claiming that they cannot distribute smart cards until there are enough terminals for users.
Most of these complications are being addressed currently, such as shifting the liability of adoption from banks to vendors and lowering the cost of terminals and cards through government incentives and using efficient production means. However, nations from Asia Pacific and Latin America still have large percentages of consumers using magnetic strip cards, still maintaining the risk of theft at a high level.