Smart Card in Government Market Size, Share Global Analysis Report, 2024 – 2032

Industry Insights

[229+ Pages Report] According to Facts & Factors, the global smart card in government market size was valued at USD 4,721.90 million in 2023 and is predicted to surpass USD 8,289.27 million by the end of 2032. The smart card in government industry is expected to grow by a CAGR of 5.80% between 2024 and 2032.

Market Overview

Smart cards are physical cards integrated with a circuit chip that helps store and process data. However, smart cards in the government sector or applications strengthen national security, offer identity validation, and improve the efficiency of public services. These cards have an embedded microchip. These cards are versatile in nature and can be used for multiple applications.

Also, these are made up of durable materials and are resistant to tampering. However, different kinds of smart cards are available in the market, like hybrid smart cards, contactless smart cards, and contact smart cards. These cards not only enhance security or the efficiency of the whole system but also help save money by eliminating manual processing and paper-based systems.

Key Insights

• As per the analysis shared by our research analyst, the global smart card in government market size is estimated to grow annually at a CAGR of around 5.80% over the forecast period (2024-2032).
• In terms of revenue, the global smart card in government market size was valued at around USD 4,721.90 million in 2023 and is projected to reach USD 8,289.27 million by 2032.
• E-governance initiatives are driving the growth of the global smart card in government market.
• Based on the card types, the contactless cards segment is growing at a high rate and is projected to dominate the global market.
• Based on the applications, the national security segment is projected to swipe the largest market share.
• Based on end-users, the federal/central government segment is expected to dominate the global market.
• Based on region, North America is expected to dominate the global market during the forecast period.

Growth Drivers

• E-governance initiatives are likely to drive the growth of the global market.

Governments all across the globe are digitizing their public services to improve service delivery, efficiency, and accessibility. Smart cards play an important role in facilitating these initiatives by offering reliable identification and access solutions. Smart City projects utilize smart card technology for different services like healthcare, social services, and transportation.

Moreover, regulatory compliances are further paving the way for smart cards in the market. International security standards are the major reasons for the high adoption rate of smart cards and government applications. Smart cards offer long-term benefits to the government while lowering overall administrative costs and activities. Smart cards streamline government processes, thereby eliminating the need for manual intervention, which further leads to cost savings.

All these factors are expected to propel the growth of the global smart card in government market. For instance, IDEX Biometrics partnered with Beautiful Card Corporation in 2023 to speed up the production of smart cards in Asia. The former is a leading company in fingerprint biometrics and the latter is a leading smart card manufacturer.

Restraints

• High initial cost is likely to hamper the growth of the global market.

Deploying smart card systems all across the nation requires a high upfront investment, which is expected to hamper the growth of the smart card in government industry in the coming years. Smart card infrastructure includes issuance systems cards, integration with existing databases, and many others. Moreover, the ongoing maintenance cost is also likely to be a burden on the government.

Opportunities

• Technological advancements are expected to foster growth opportunities in the global market.

The emergence of contactless technology has significantly revolutionized the smart card markets. It has increased the speed and convenience of the system, particularly in public transportation. The integration of smart cards with biometric data, such as facial recognition or fingerprints, is further expected to strengthen the security system.

Therefore, all these factors are expected to foster growth opportunities in the global smart card in government market. For instance, IDEMIA renewed its collaboration with health authorities in Germany in 2021 to issue new cards.

Challenges

• Data protection concerns are a big challenge in the global market.

The security of personal or sensitive data stored on smart cards is a big issue. Potential cyber breaches or attacks are likely to misuse such sensitive data, and the government can lose public trust. The regulatory compliance regarding the Data Protection Act is also complex. Therefore, such a landscape is expected to be a big challenge in the smart card in government industry.

Segmentation Analysis

The global smart card in government market can be segmented into card types, applications, end-users, and regions.

On the basis of card types, the market can be segmented into hybrid smart cards, dual interface smart cards, contactless smart cards, contact smart cards, and others. The contactless cards segment accounts for the largest share of the smart card in government industry. Contactless cards eliminate the requirement of any physical contact during transactions; thereby, they help eliminate the risk of physical fraud or tampering in the system. These cards are made with advanced encryption and authentication technologies to strengthen the security.

These cards facilitate quick transactions, thereby reducing the waiting time and improving the system's efficiency. Contactless cards are user-friendly and widely preferred among citizens and government employees. Integration of NFC technology further facilitates swift communication between the parties, thereby improving its firm functionality. Contactless cards work on biometric features like facial recognition or fingerprints. Governments are working on digital programs by using advanced technology to offer improved services to people.

However, the rise in the trend of digital transformation in the public sector is a crucial reason likely to positively impact the growth of the segment. These initiatives are increasing the adoption of contactless cards in different applications, like healthcare, transportation, national ID, and many others.

On the basis of application, the market can be segmented into social cards, transportation, citizen identity, national security, and others. National security is the fastest-growing segment in the global smart card in government market. Growing geopolitical tensions and conflicts are the primary reasons for the high growth rate of the segment.

Rising conflicts between nations are further boosting the requirement for advanced security measures to protect national interests. Improving surveillance systems with the help of smart card technologies helps in monitoring the moment of individuals at the border to protect the nations. Smart cards offer tamper-proof identification solutions, which is quite helpful in preventing criminal activities as they help verify identities accurately.

Moreover, many government initiatives are aimed at implementing national ID cards in order to provide access to public services and protection for national security. Governments are investing in e-government initiatives to facilitate the adoption of smart technologies at a larger scale. Technological advancements are further expected to foster growth opportunities in the segment. Developments in biometric authentication help in strengthening the accuracy of identity verification. Also, the advanced cryptographic technologies used in manufacturing these cards facilitate strong encryption, thereby protecting unauthorized access to the system or sensitive information.

On the basis of end users, the market can be segmented into federal/central government and state/local government. The federal/central government segment is likely to dominate the global smart card in government market. The federal government offers an extensive scope of applications for these smart cards. These cards are widely used in national ID programs to offer a secure and tamper-proof identification solution by smart cards.

E-governance services leverage smart card technology to offer security, efficiency, and accessibility of public services. Federal agencies are in charge of managing border control, and therefore, they implement smart cards to show security at a high level. These also have ample budget to invest in advanced technologies like smart card systems, which is another major factor positively impacting the growth of the segment.

Moreover, many centralized funding programs like Social Security schemes, digital identity programs, and healthcare reforms pose a huge requirement for smart solutions to assure security. National security is the primary goal of the federal government, which boosts the adoption of advanced identification solutions to prevent fraud, unauthorized access, and criminal activities. Emerging data protection and privacy regulations are further driving the adoption of these smart cards globally.

Report Scope

Regional Analysis

• North America to dominate the global market.

North America accounts for the largest share of the global smart card in government market. The United States is leading the regional market. The US is using PIV Smart cards for contractors and employees. Also, Medicaid and Medicare programs in the US accept smart cards for secure patient identification. Canada is implementing a secure identification system for citizens to make public services easy. Moreover, the Canadian government is including smart health cards in the healthcare infrastructure to offer secure access to healthcare services and also maintain patient records.

Therefore, all these factors are likely to positively impact the growth of the regional market in the coming years. Moreover, the rising trend of biometric integration in smart cards for multi-factor authentication is also likely to widen the scope of the regional market. The growing adoption of contactless smart cards offers faster and more efficient services to citizens, which in turn is further likely to support the growth of the regional market.

Asia Pacific is anticipated to witness rapid growth in the coming years. China is emerging as the largest contributor to the regional market. The Chinese government is issuing national ID cards with embedded smart chips for identification purposes. These cards are said to be tamperproof.

Moreover, countries use smart cards for Social Security purposes to streamline service delivery and eliminate fraudulent activities in the market. The Indian government has also come up with the Aadhaar card program, which is said to be the largest biometric system in the world.

Moreover, the Digital India initiative is driving the adoption of smart cards into different public services like Social Security, healthcare, and financial inclusion. India is investing heavily in e-governance programs to offer efficient public services. Such a landscape is anticipated to boost the growth of the APAC market.

Competitive Analysis

The key players in the global smart card in government market include:

• Veridos
• CPI Card Group
• Giesecke+Devrient (G+D)
• CardLogix
• NXP Semiconductors
• HID Global
• Entrust Datacard
• IDEMIA
• Thales Group

For instance, the National Payments Corporation Of India (NPCI) collaborated with Falcon and QubeHealth in 2023. This partnership is expected to come up with Veresto, a RuPay-powered health card to ramp up the easy-pay healthcare credit system in India.

The global smart card in government market is segmented as follows:

By Card Types Segment Analysis

• Hybrid Smart Cards
• Dual Interface Smart Cards
• Contactless Smart Cards
• Contact Smart Cards
• Others

By Applications Segment Analysis

• Social Cards
• Transportation
• Citizen Identity
• National Security
• Others

By End-Users Segment Analysis

• Federal/Central Government
• State/Local Government

By Regional Segment Analysis

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • Australia
  • Southeast Asia
  • Rest of Asia Pacific
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • Kuwait
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America