The Global Smart Card Market in the Government Sector is witnessing significant growth and is expected to grow at a CAGR of 10.2 percent during the period 2014-2019.
One of the major reasons for strong growth is the high adoption of smart card solutions because of the increasing cases of fraud, data theft, and terrorism.
Driver: Increased Use of Smart Cards in Defense Sector
Since 2008, numerous defense agencies of developed nations have been employing smart cards for identification and access control. This has also encouraged defense forces of developing countries to adopt smart cards.
Therefore, the demand for smart cards in the Defense sector worldwide has increased significantly over the years. This trend is expected to continue, contributing to the growth of the Global Smart Card market in the Government sector.
Challenge: Increase in Price Wars
Smart cards are priced high in developing countries because of the paucity of vendors. However, in regions where the market is fragmented with many vendors, there is an ongoing price war and a constant decrease in prices of smart cards. This adversely affects small vendors and the overall revenue of the market in the Government sector.
Despite the claims by vendors that their cost-effective products are as secure as expensive ones, security concerns will always discourage end-users from adopting inexpensive solutions. Therefore, price wars are likely to affect the adoption of smart cards among end-users.
Trend: Adoption of Smart Cards in Developing Countries
Government agencies in developing countries are increasingly adopting smart cards. For instance, smart-card-based ration cards, AADHAAR cards, smart-card-based drivers’ licenses, and smart cards that store vehicle information are being widely used in India.
Also, voter ID smart cards are increasingly being launched in South Africa. Many of the other developing countries are launching smart cards for sectors such as Government, Healthcare, Transportation, and Defense.
