The Smart Payment Association (SPA) recently unveiled its annual review of the smart card market, revealing a significant uptick in global shipments.
In 2023, the market saw a remarkable 3.2 billion units delivered, up from 2.6 billion units in 2022. This growth is a testament to the sector’s resilience and adaptability in the face of challenges and changing consumer demands.
The increase in smart card shipments can be attributed to several key factors. First, the SPA’s expansion in membership and the extension of market perimeters by existing members contributed to capturing additional shipment figures for the year.
This expanded coverage allowed the SPA to present a more comprehensive view of the market.
Additionally, the easing of the global silicon chip shortage played a crucial role.
Throughout 2023, disruptions caused by the shortage diminished, enabling SPA members to meet the pent-up demand from 2022 and replenish inventory levels.
This recovery in the supply chain ensured that production could keep pace with the growing demand for smart payment cards.
Jacques Doucerain, President of the SPA, emphasized the industry’s commitment to maintaining production and minimizing customer impact despite the challenges posed by the chip shortage.
This is clearly reflected in the significant shipment figures for 2023.
Dominance of Contactless Payments
The global shift towards contactless payments continued to gain momentum in 2023, propelled by a growing consumer preference for touch-free transactions.
Contactless card shipments accounted for an impressive 88% of total global shipments, up 4 percentage points from 2022. Overall, there was a 27% increase in contactless shipment volumes.
Every country in the world now issues dual interface cards that support contactless payments, with regional shares of contactless shipments ranging from 78% to 99%.
This widespread adoption underscores the convenience, security, and interoperability of NFC technology, which has become the standard for tap-to-pay transactions.
Doucerain concluded that NFC has firmly established itself as the reference technology for contactless payments, as consumers worldwide have integrated tap-to-pay into their daily habits.
Rise of Sustainable Payment Cards
One of the standout trends in 2023 was the growth in shipments of sustainable payment cards.
Driven by increasing consumer demand for eco-friendly products and new corporate Environmental, Social, and Governance (ESG) mandates from governments, banks around the world accelerated their sustainable card issuance strategies.
In 2023, eco-friendly card shipments accounted for 21% of the total SPA card shipments globally, a notable increase from 14% in 2022.
This shift highlights the pace at which banks are transitioning away from first-use PVC as a payment card material.
Europe led the charge, with 50% of these eco-friendly cards being shipped to this region, followed by the Americas at 40%.
The payment card industry’s collaborative efforts are fuelling this transformation.
SPA members are pioneering end-to-end approaches that encompass everything from rethinking materials such as inks, envelopes, and packaging to end-of-life recycling processes.
Doucerain noted that the industry is investing in new eco-innovative materials and processes, reflecting the growing climate and environmental concerns among consumers.
Looking Ahead
The smart payment card market’s performance in 2023 highlights its resilience and capacity for innovation.
As sustainability and contactless technology continue to drive growth, the industry is well-positioned to meet the evolving needs of consumers and businesses alike.
With ongoing investments in eco-friendly materials and processes, and the widespread adoption of NFC technology, the future of smart payment cards looks promising.
The SPA’s annual review not only provides a snapshot of the industry’s current state but also sets the stage for continued advancements in the smart card market.
As the world moves towards a more sustainable and technologically advanced future, the smart payment card industry will undoubtedly play a pivotal role in shaping the landscape of digital payments.
For more insights and updates on the smart payment cards market, stay tuned to our Daily Insights payments blog.
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