LONDON, Jan. 25, 2016 /PRNewswire/ -- The last 12 months proved another positive year for the EMV smart payment cards standard, initially created by Europay, MasterCard and Visa. In 2015, EMV card issuance in the U.S exceeded original industry expectations, hitting nearly 600 million units, while China showed continued success, achieving record shipments near the 850 million mark. The two countries led significant worldwide market growth, accounting for 53% of the more than 2.6 billion total EMV cards shipped in 2015, according to ABI Research, the leader in transformative technology innovation market intelligence. But how long can growth continue to climb?
"EMV migration in the U.S. ramped up quickly, with market penetration likely to hit close to 100% over the next two years," says Phil Sealy, Senior Analyst at ABI Research. "Due to migration speed, a U.S. market dip is expected. Vendors such as Gemalto, Oberthur Technologies, Infineon and NXP are aiming to identify when this scenario might hit to plan accordingly. Our findings show that U.S. EMV shipments will peak in 2016 and reach approximately 617 million units. In 2017, shipments are forecast to dip by approximately 5% with later shipments likely to settle within the 600 and 615 million range."
Despite the anticipated market dip in the U.S., ABI Research forecasts the worldwide market to continue to follow a growth trajectory. Worldwide growth will primarily be driven by EMV migration programs on the horizon, such as those in Indonesia and India. Beyond the short-term U.S. dip, additional opportunities in the U.S. are presenting themselves due to the market's large installed base of mag-stripe Private Label Credit Cards (PLCCs) and next-generation migration plans surrounding contactless issuance.
U.S. PLCC migration may provide a growth boost from a volume perspective and help growth in an otherwise flattening market, but it seems to be the local issuer's plans around contactless migration that has major vendors most interested. While U.S. issuers focused initial issuance in favor of the more cost-effective contact interface, a move to contactless presents a substantial value proposition for leading smart card and secure IC players.
"In 2015, Apple and Samsung Pay helped educate U.S issuers and users on the value and convenience that contactless payments can enable," concludes Sealy. "In the longer term, this will help drive uptake of contactless cards. However, ABI Research believes that the U.S. will remain primarily a contact-based country for the short term. The country will most likely issue contactless cards upon expiration of the contact cards. We anticipate a larger contactless card impact in the U.S. and worldwide to be felt in two to three years' time."
These findings are part of ABI Research's Smart Card Technologies Service (https://www.abiresearch.com/market-research/service/smart-card-technologies/), which includes research reports, market data, insights and competitive assessments.
About ABI Research
For more than 25 years, ABI Research has stood at the forefront of technology market intelligence, partnering with innovative business leaders to implement informed, transformative technology decisions. The company employs a global team of senior analysts to provide comprehensive research and consulting services through deep quantitative forecasts, qualitative analyses and teardown services. An industry pioneer, ABI Research is proactive in its approach, frequently uncovering ground-breaking business cycles ahead of the curve and publishing research 18 to 36 months in advance of other organizations. In all, the company covers more than 60 services, spanning 11 technology sectors. For more information, visit www.abiresearch.com.
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SOURCE ABI Research