New research points to increase in payment, smart card shipments

As technology has advanced, the payments industry has benefited immensely from its innovative solutions. As a result, an estimated 1 billion contactless payment cards are expected to be shipped worldwide in 2016, growing from the 170 million shipped in 2010, according to a recent ABI Research study.

The payment cards projected to be shipped include Europay MasterCard Visa duel-interface solutions and non-EMV pure contactless cards in the United States, the company stated.

"There is quite a buzz around contactless payment capabilities," said ABI Research analyst Phil Sealy. "There is a higher level of convenience for cardholders, with quicker transaction speeds and a reduction in time spent queuing."

According to ABI Research, global smart card shipments, which include EMV and non-EMV payment cards, are expected to reach 1 billion this year. By 2015, smart card shipments are projected to overtake magnetic-stripe cards.

"As countries become developed, the demand for banking services increases," said Sealy. "For the banks, the primary reason for EMV migration is that EMV provides a higher level of security over mag-stripe cards. As such, card-based fraud is more prevalent in countries with the weakest security protocols."

One country responsible for much of the smart card adoption is China, which currently has 2.3 billion payment cards in circulation. According to ABI Research, all of these cards are to be replaced by smart cards by 2015, as the country transitions away from its traditional payment cards.

Despite the immense demand for smart cards moving forward, magnetic-stripe cards are not expected to vanish from the landscape.

"Mag-stripe cards still have a strong hold in the payment card market, and will still account for 50 percent of all cards in circulation in 2016," said Sealy.

While China is expected to contribute a large percentage of the smart card demand, the technology is being utilized in other areas of the world. According to a recent study by Frost and Sullivan, the market value for smart cards in the Middle East and North Africa is projected to reach nearly $329 million by 2014. From 2011 to 2013, the research firm anticipates the market will increase at an annual compound growth rate of 12 percent, as a result of increased secure identification and credential solutions demand.