In 2016, Russia will begin replacing paper passports with e-passports that authenticate the identity of a traveler by using the biometric information stored in an embedded smart chip. If successful, Russia will eliminate paper passports altogether by 2030.
The use of electronic identification first gained steam when the European Union issued citizens e-ID cards which act as a standard travel document. In fact, the International Civil Aviation Organization (ICAO) has made it mandatory for its member countries to implement the e-passport system. As a result, the number of e-passport documents is expected to soar to approximately 132 million by 2014 which is fueling market growth at a CAGR of 32.5 percent for the 2012-2016 period.
A huge reason for the rapid adoption of e-passports is the added security benefits that they can provide. The smart chip embedded in e-passports has a unique identification number and a digital signature to protect stored information making it more secure since it prevents data alteration. The data stored electronically in the chip is authenticated by Public Key Infrastructure (PKI), making it extremely difficult to forge an e-passport. In addition, e-passports have biometric modalities like facial, fingerprint and iris recognition used for identification to improve traveler authentication.
The surge in demand for e-passports is proving to be a mixed bag of results for vendors. On the one hand, vendors can expect an increase in profit margins as more countries adopt electronic identification. On the other hand, new vendors are expected to enter the market which will add to the already intense competition among existing vendors like the ones listed below.
The good news is that there are many different components to the Global e-passport market which will help vendors diversify their product lines, thereby reducing direct competition.
Gemalto, the market leader, issues highly secure e-passports and provides Sealys and Coesys secure solutions with features that include rainbow printing, invisible fluorescent printing or mixed into invisible ink and micro-printing.
Meanwhile, Giesecke & Devrient manufactures its own papers, performs security printing and produces laser-engraved data pages. It caters to a high level of security and faster processing of customer traffic with its HIGHSEC passport which creates a three-dimensional effect and is considered to be very effective for document authentication.
Although both companies are vying for the top spot in the market, they don’t necessarily have to step on each other’s toes to get there. This is especially good news for smaller vendors because they can offer different solutions than their competition which will allow them to gain traction in the market.
Recently, vendors developed the third generation e-passport which enhances data confidentiality by using a key shared between the reader and the chip for data encryption. It guarantees more privacy and leaves no signature that can be used by third parties. It is also unlinkable and untraceable, since the recorded exchange gives no information about the document. Improvements like this are another plus for vendors because, like any electronic product, technology progresses which will lead upgrades that governments will gladly pay for if it means beefing up security to greater levels.
For more information, view our 2012-2016 Global e-passport Market report.
