By Al Vrancart, Founder Emeritus and Industry Advisor, International Card Manufacturers Association
With the card manufacturing industry constantly evolving, there are particular areas of the industry that offer the most growth potential in 2013. These trends will directly affect how card manufacturers and personalizers conduct business today and will shape the future of the industry.
Consider these top five growth trends:
Government/Health: This market segment has a diverse array of plastic card applications including national ID, driver licenses, passport cards, social benefits and public and private health care cards. New card technologies, government imposed ID standards and security and fraud issues and concerns are driving growth in this segment. These cards are becoming more technologically sophisticated and expensive. There were 2.3 billion cards manufactured in this segment in 2012, according to ICMA’s 2012 Global Market Statistics Report.
SIM Mobile Phone: The ubiquitous mobile phone is a saturated market with six billion mobile phones in use today. However, growth continues with the global conversion to smart phones and proliferation of SIM enabled tablets. This market is also driven by consumer demand for frequent phone upgrades to receive new phone features and designer handset styles. There is growth in most global regions and especially in the less developed countries where smart phones conveniently enable transactions by the large unbanked population. Also, declining chip prices have eroded SIM card prices. There were 5.2 billion SIM cards manufactured globally in 2012, according to ICMA’s Report. A movement to embedded SIMs would be a threat to future growth.
Financial: This global market for secure financial cards continues to experience moderate growth driven by contactless and dual interface technology, the shift to debit/prepaid, rebranding from bank/issuer merger activity and strong growth in the Asia Pacific region particularly from China UnionPay while the U.S. begins its massive launch of EMV chip cards. ICMA’s Report estimates that there were 4.2 billion secure financial cards manufactured globally in 2012. Mobile payments could ultimately impact growth in this premier segment in future years. However, most applications today require that a companion financial card be issued.
Transportation: A global trend is in place for transit systems moving away from paper based magnetic tickets to contactless smart cards. These cards are manufactured for the transit system and issued as closed loop cards for frequent users. There is also a trend to use contactless secure financial cards like Visa and MasterCard in an open loop system particularly to meet the needs of infrequent “one trip” users. There are also transit systems that are beginning to test and use mobile payment applications that could impact future card growth. ICMA’s Report estimates that globally there were 1.7 billion closed loop transportation cards manufactured in 2012.
Gift Cards: North America and the UK continue with moderate growth as closed loop gift cards become more sophisticated in design and have become a traditional mainstay item for the gift giving holiday season. Europe and Asia Pacific are now embracing gift cards with exceptional growth. ICMA’s Report estimates that on a global basis there were 3.5 billion closed loop gift cards manufactured in 2012. Virtual or digital gift cards are also emerging. However, they are not expected to curtail demand for plastic gift cards.