Oyster Bay, New York - 04 Aug 2016
The Chinese and U.S. EMV (Europay-Mastercard-Visa) payment cards markets are experiencing double-digit year-on-year growth, responsible for more than 50% of 2.8 billion EMV cards shipped worldwide. But as the migration phase for these market regions comes to a close, the industry will soon experience a ripple effect driven by a flattening market in China and a dip in U.S. shipments due to overstocking. ABI Research finds the proliferating negative discussions among industry players to be over exaggerated and suggests vendors focus on new card form factors and emerging regions to drive future growth.
“Smart card and secure IC vendors like Oberthur Technologies, Gemalto, G&D, Infineon, NXP, and STMicroelectronics now wonder how big the U.S. dip will be and its overall impact on worldwide shipments,” says Phil Sealy, Senior Analyst at ABI Research. “There remains a real risk that the 2016 dip will extend into 2017 as EMV issuance stabilities, stock levels deplete, and a natural card replacement cycle based on a three-year expiry rate comes into play.”
Vendors are already reporting reductions in U.S. orders, and the CPI Card Group adjusted its 2016 earnings expectations downward. Though unit volume growth will slow, the continued transition toward contactless payment cards with higher associated average selling prices (ASPs) will help boost revenues. And India will be a good, emerging growth market, as it recently sets its own EMV mandate.
But established and saturated regions need to look at new biometric and Dynamic Card Verification Value (dCVV) card technologies to drive future revenue growth. The new form factors capitalize on consumer safety and will gain momentum as the focus turns to enhancing physical to CNP (card-not-present) fraud.
Biometric cards featuring integrated sensors that identify their card holders will provide an additional strong authentication method for physical payments. Display cards with dCVV and/or one-time password (OTP) functionalities will replace the static three-digit card verification code currently located on the rear of debit and credit cards with a small display screen that changes the card holder’s unique card verification code every few minutes.
“The new card models will open up the next wave of revenue growth opportunity within the payment cards market for secure IC and smart card vendors alike,” concludes Sealy. “Those that already invested in these technologies are well positioned to maximize this next generation opportunity.”
These findings are from ABI Research’s Payment & Banking Card Technologies and Payment & Banking Card Secure IC Technologies. This report is part of the company’s Digital Security sector, which includes research, data, and analyst insights.
About ABI Research
ABI Research provides strategic guidance to visionaries, delivering actionable intelligence on the transformative technologies that are dramatically reshaping industries, economies, and workforces across the world. ABI Research's global team of analysts publish groundbreaking studies often years ahead of other technology advisory firms, empowering our clients to stay ahead of their markets and their competitors.
ABI Research提供开创性的研究和战略指导，帮助客户了解日新月异的技术。 自1990年以来，我们已与全球数百个领先的技术品牌，尖端公司，具有远见的政府机构以及创新的贸易团体建立了合作关系。 我们帮助客户创造真实的业务成果。
For more information about ABI Research's services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific or visit www.abiresearch.com.
Asia: +65 6950.5670