1. Indian Smart Card Market
Indian Smart Card
Market
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2. Indian Smart Card Market
The market for smart cards is experiencing signifi-
cant growth with the recognition that the technol-
ogy provides a platform to package products and
services that meet the needs of individual
customers.
The Global Smart Card Market had 6.2 Billion
smart cards shipped in 2011 reaching US$ 4.7 Bil-
lion and in 2012, the number of smart card units
shipped estimated to reach around 6.8 Billion
Units and in value terms it is estimated to be US$
5.1 Billion.
Further, the telecommunication segment lead with
around US$ 4.7 Billion in 2011, expected to rise to
about US$ 5.1 Billion in 2012 further to jump to
US$ 7.3 Billion by 2017 thus growing at a CAGR
of 7.4% globally.
As of now, smart cards are used for a wide range
of applications in India across government,
telecommuniction, Natinal Population Register,
Public Distribution System, Pay TV, Loyalty Cards,
Financial Services, Travel Identity, Automated fare
collection, Healthcare etc.
Market Overview
8.60
6.80
6.20
5.46
5.20
2009
2010e
2011e
2012e
2013e
Telecom
Banking Retail
Governmant ID Healthcare
Others
75%
17%
4%
4%
Figure-2: Global Smart Device Shipment- By Sector
(Million Units), 2011
Figure-1: Global- Smart Card Shipments (Billion
Units), 2009- 2013
Source: Eurosmart
Note: Data is estimated
Source: BCC Research,
Euromonitor

3. Indian Smart Card Market
The explosive growth in the cell phone market
in India and China, has resulted in tremendous
growth in the smart card market. Further, the wid-
ened 3G and 4G penetration has also enhanced
the demand for these cards.
Worldwide EMV and Dynamic Data
Authentication(DDA) migration benefit is been
witnessed from strong growth in Latin America
and Asia. Also, Strong dual contact and contact-
less cards growth are expected in the coming
years.
There would be an expected deployment of
migration to new, more secure documentation
with an increased emphasis on integrating ID and
healthcare solutions with contact and contactless
smart technology.
The Indian smart card market shipped 38.96
Million Units of smart cards in CY Q1, 2013. The
Market accounted for INR 31.03 Billion in 2011
and is estimated to be around INR 37.24 Billion in
2012.
4000
4500
3400
3200
2008 2009 2010e 2011e
Figure-3: Global Smart Card Sales - Telecom
(Million Units), 2008-2011
Source: Eurosmart
1010
880
750
650
2008
2009
2010e
2011e
Figure-4: Global Smart Card Sales - Banking &
Retail Sector (Million Units), 2008-2011
Source: Eurosmart
1010
880
750
650
2008 2009 2010e 2011e
Figure-5: Global Smart Card Sales - Government &
healthcare Million Units), 2008-2011
Source: Eurosmart

4. Indian Smart Card Market
Thus, the smart card market was anticipated to
grow at CAGR of around 24% during the period
of 2009- 2013.
Over the years the Telecommunication applica-
tions has ruled the India smart cards market,
wherein these cards are used majorly as SIM cards
in mobile phones. The telecom sector, represented
the biggest application sector in 2012, accounting
for more than 70% of the total market volumes.
Some of the globally recognised card manufactur-
ers who dominate the Indian market are Schlum-
berger, Gemalto, G&D, Obethur, VCT and Orga.
Among the major systems integrators are Shonkh,
Rolta, Smartchip, CMS, Siemens (SISI), CA Satyam
and E-Cube.Further, the suppliers within the indus-
try are essentially semiconductor manufacturers
like Infineon, STMicroelectronics, Atmel, Philips,
Siemens Semiconductor, etc.
1354
1180
1000
812
561
2009
2010e
2011e
2012e
2013e
Figure-2: India- Smart Card Shipments
(Million Units), 2009- 2013
Source:RNCOS

5. Indian Smart Card Market
Market Size and Growth
Globally, the smart card market stood at 6.8 Billion
Units in 2012 and is expected to reach 11.1 Billion
in 2017 and thus is anticipated to grow at a CAGR
of around 10% during the period of 2012- 2017.
The Indian Smart Card Market is expected to reach
around INR 52.76 Billion by the end of 2015, an in-
crease of about INR 21.73 Billion from the revenues
in 2011.Thus, the Smart Card Market is anticipated
to grow at a CAGR of around 12.31% during the
period of 2012- 2015.
During the coming years, smart cards are expected
to percolate more into a number of other sectors
such as credit/debit cards, financial inclusion, public
distribution, healthcare, identity management,
transportation, etc.
Further, the National Population Register,
which is expected to represent the biggest
application segment in 2018, is expected to
account for less than 31% of the total market
volumes by 2018.
New and attractive growth prospects are
being witnessed due to EMV ( Euro Pay,
Master Card and VISA) migration, Long Term
Evolution(LTE) deployment and government
support. Moreover the entry of innovative
smart card devices in the market will further
strengten the overall industry in the long run.
6.8
2012e 2017f
11.1
CAGR 10%
Figure-7: Global – Smart Card Market
(Billion Units), 2012 & 2017
Source: BCC Research
37
2012e 2015f
52.76
CAGR 12.31%
Figure-8: India – Smart Card Market
(Billion INR), 2012 & 2015
Source: Cybermedia Research

6. Indian Smart Card Market
Market by Category
The cards in use essentially fall under three cat-
egories – contact, contactless and hybrid smart
cards. Traditionally, contact smart cards have
played a crucial role in defining the growth of the
market. But in the coming years, a major shift is
expected towards contactless and hybrid smart
cards.
The India Smart Card market is lead by the Con-
tact Smart Cards, which has also captured more
than 90% of the total market share for the CY Q2
2013.Hybrid Smart Cards hold around 5% market
share of the Total Units Shipped.
The dominance of contact smart card is primarily
on account of telecommunication, broadcasting
and banking vertical. Telecommunication sec-
tor has shipped more than 75% of the Total Unit
Shipments of Contact Smart Cards for the India
Smart Card Market in CY Q2 2013.
Hybrid cards lead the smard card category after
the contact smart card market with around 5%
share in the market.
And the trend of increasing demand of contactless
smart card is mainly being fuelled by Near Field
Communication(NFC), mass transit projects and
e-passports.
Further,on the application front, financial service
sector is the key user of contactless smart cards
and e-passports and other identification applica-
tions holds the prominent position in the govern-
ment sector.
Further, it is also expected that microproces-
sor based smart cards will continue to dominate
the smart card shipments, as compared to the
memory chip based smart cards. The microproces-
sor segment has accounted for shipments of 4.5
Billion smart cards in 2009, which was 86.5% of
the overall shipments (5.2 Billion) of smart cards.
Figure-7: Global – Smart Card Market
(Billion Units), 2012 & 2017
Contact
Contactless
Hybird
95%
5%
1%
Source: 6wresearch

7. Indian Smart Card Market
The changing global scenario is expected to turn out to be one of the key drivers behind the rising
demand for smart cards. The Telecom Market in India is already booming with the 3G spectrum building
up, there will be yet more expansion with the enhanced adoption of 4G network. Further, the penetra-
tion of mobile phones in rural areas in turn increasing the demand for SIM cards would also result in
growth in the telecom sector.
Banking is another sector where the demand for smart cards is rising as smartcards are slowly changing
over from being made of magnetic strip cards. Thus, this vertical is also expected to witness a growth in
smart card adoption in the years to come.
Further, ID verification is another field that will experience a growth in the demand for smart cards. With
the aim to secure and safeguard identities against theft, this vertical will receive special attention.
For instance, the Delhi Metro Railway Corporation (DMRC) has been using the technology extensively.
The demand rose from 0.45 Million to 1.32 Million from the first year of implementing the technology,
growing to 2.1 Million. There has been almost a fivefold increase in demand within a span of just three
years.
As per the government’s guidelines, all states and union territories will have to compulsorily start issuing
smart cards for all driving licenses (DL) and registration certificates (RC). Thus, Upgrading DL and RC
books from paper to smart cards is going to result in high volumes.
Also, in the current manufacturing scenario, 50% of the smart cards are still being imported. But with
the number of players setting up new facilities in India, more than 70-80% of manufacturing is expect-
ed to be done locally in future.
Future Outlook

8. Indian Smart Card Market
Opportunities & Challenges
Opportunities
• E- Governance Initiatives to Create Huge demand in Public Sector
E- Governance projects such as National Population Register Project, Mahatma Gandhi
National Rural Employment Guarantee Act (MNREGA), Rashtriya Swasthya Bima Yojna, Ex
Serviceman Healthcare Service (ECHS), Driver License, Ration Cards, Passports, PAN cards
etc. are expected to be deployed on a large scale by the Government. Thus, would create
a huge demand in the Smart Card Market.
• Modernization of Public transport systems in expanding smart card usage
For instance, Kerala State ‘City on Wheels’ implemented jointly by Technovia Info Solu-
tions and Kerala Bus Transport Association( KBTA) is a project through which passengers
can pay their tickets by swaping a smart card.
• Demand for plastic money
Spending through debit or ATM cards has increased by 45% year-on-year during 2011-
12. Further, the shift towards the VISA international Cards from the debit cards in the
banking and finance sector is also supporting the smart card market in India.

9. Indian Smart Card Market
Challenges
• Implementing Smart Card System requires Substantial Infrastructure
Investments.
For instance, Only 50% of the current ATMs are with nominal s/w and h/w upgrades
which can accept EMV chip cards, remaininmg h/w require significant upgrade, for exam-
ple, back-end systems and point-of-sale terminals or even replacement.Thus implementa-
tion of EMV based bank cards are further low.
• Declining prices of the smart cards
Firstly, costs of smart cards are declining as production volumes rise. Further, prices are
also affected due to the considerable drop in the prices of chips used in it.
• Bureaucratic Delays
For instance, a number of government projects such as the UID, E-passports, EPFO, etc
have been delayed or cancelled due to problems like lack of funds, technical issues, legal
wrangling, etc.
• Lack of standards to ensure interoperability among varying smart card
programs
Mobile service providers, transport operators and banking systems etc need to converge
their efforts regardless of their different business objectives i.e market must be stable and
based on proven and trusted standards.
• Limited Awareness and resistance to technological changes.

10. Indian Smart Card Market
Recent News
June 08, 2012, The Kolkata Metro announced to install automatic smart card recharging
machines across all its 23 station after the success of the automatic smart card recharging
machine at the Park street Metro station.
August 05, 2013, Maharashtra state government has decided to start the smart card system
for automated toll collection at all major booths in the state. Also, planning to introduce
prepaid RFID-based cards that can be fixed on windshield of vehicles. This will ensure vehicles
drive through a dedicated lane at toll booths without stopping.
September 02, 2012, Passengers will soon be able to use smart cards for buying train tickets
on the busy Delhi-Howrah and Delhi-Mumbai routes. The smart card, called Go-India card,
can be used for booking tickets for long distance and sub-urban trains on Delhi-Mumbai and
Delhi-Horwah routes.
October 13, 2012, Oil marketing companies are planning to introduce smart cards for cooking
gas customers in a move to keep tabs on consumption. Following the decision of the Petro-
leum Ministry to cap the number of subsidised gas cylinders to six per household a year, oil
marketing companies BPCL, HPCL and IOC are thus evaluating the prospects of introducing
the smart cards.

11. Indian Smart Card Market
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