Government smart cards to boost loyalty apps

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By: Wise Marketer Staff |

Posted on September 11, 2003

As governments around the world begin adopting and issuing smart cards as authentication devices in national identification programmes, the market for other multi-application smart cards - including loyalty applications - is also expected to grow, according to strategic growth consultants, Frost & Sullivan.

A new analysis report from Frost & Sullivan, World Card Reader Markets, shows that the industry generated revenues totalling US$1.17 billion in 2002. By 2009, total market revenues are expected to reach US$1.66 billion.

The Malaysian MyKad project, having the potential for some 23 million users, and more than 20,000 card reader deployments between 2003 and 2005, is expected to reduce manufacturers' fears of the lack of 'killer' smart card applications. "MyKad aims to provide every Malaysian citizen with a single smart card that contains the citizen's ID, driving license, and passport, among other things," said Frost & Sullivan research analyst, Karthik Nagarajan.

In the past, according to the report, some e-purse and loyalty applications that were developed to utilise the processing power of smart cards have been unsuccessful because their value addition did not justify their costs. Currently, e-security and national IDs are the safest bets for an extremely profitable business case, according to Nagarajan.

However, the increasing adoption of governmental smart card applications may bring with it both increased acceptance and opportunities for other application providers.

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