Frost & Sullivan: Smart-Card Market to Reach $328.5 Million by 2014

The escalating need for high-level security, ease of access and secured mode of payment are driving the growth of smart-card market in the Middle East North Africa (MENA) region. The technology is likely to be primarily adopted in applications such as health cards, driver's license and conditional access system television, but the biggest demand is expected from the telecommunications segment due to the shift from fixed line telephony to mobile telephony. This segment is anticipated to account for 64.5 percent of the overall smart-card sales.

New analysis from Frost & Sullivan, “Middle East and North Africa (MENA) Smart Cards Market”, finds that the market earned revenues of US$229.3 million in 2009 and estimates this to reach $328.5 million in 2014, growing at a CAGR of 10.8 percent.

Meanwhile, over the last five years, the MENA region has ramped up homeland security by implementing more smart card-based security to avoid counterfeiting and instances of fraudulence in the existing database.

"Illegal immigration and the need for high-level security in the government administration are the key areas of concern," said Analsyt Bharath, Senior Research at Frost & Sullivan. "Smart-card suppliers are focusing on providing a secured and customized solution for both government and private segments."

The governments of different countries in the MENA region are in the process of assessing and building a database of the citizens, immigrants and expats for the national identity card project. Individual government agencies are also supporting various government initiatives to make this project a major success.

However, providing a database, securing the data for government-related projects and integrating multigovernmental projects involve a tedious and time-consuming process. Suppliers with the technological resources are likely to make the most of the tremendous opportunities generated by these large-scale government projects.

Suppliers are investing considerably in R&D to keep pace with the continuous technology updates and the need for highly secured transactions in the banking industry. With an increasing number of applications in the smart-card market, the suppliers are investing in developing superior products and solutions.

"The market is likely to get an additional boost from the usage of smart payment in both metros and road transportation," Bharath said. "The introduction of smart cards in driver's license and vehicle registration also bodes well for the market."
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