A significant increase in mobile connectivity, growth of banking and retail applications, as well as initiation of many e-governance projects is spearheading the rapid progress of the Indian smart card markets. Considerable market potential, widespread penetration of the Internet and the need for national identification schemes are stepping up the acceptance of smart card technologies.

This Frost & Sullivan research examines the Indian Smart Card Markets and the three types of smart cards - microcontroller, contact-less, and memory-only. The report also provides comprehensive market information about the use of smart cards in five different sectors - telecommunications; banking and retail; transit; healthcare; and government.

Development of New Sectors and Applications Creates Opportunities for Adoption of Smart Card Technologies

Chip-enabled payment cards, e-purse projects facilitating stored value payment, and smart cards offering integration flexibility with other automatic identification data capture (AIDC) technologies drive market growth. According to the analyst, "The emergence of smart cards have resulted in their increased adoption in biometrics technology and for purposes of national identity verification, reducing labor costs as well as delays caused by manual systems."

Fast growing segments such as information technology, insurance, and telecom require smart cards for many applications. The analyst adds, "Applications such as network security, prevention of card fraud, quest for security and privacy of sensitive information create new opportunities in many sectors for the adoption of smart cards."

New Technologies and Research Provide Impetus to the Burgeoning Market

Contact-less smart cards are driven by electronic access control systems .The use of smart cards along with handheld computers enable cost-effective delivery of financial services. Microprocessor cards dominate the market due to the encouraging trend toward multi-application cards. The establishment of Media Lab Asia, a collaboration between the Department of Information Technology and Massachusetts Institute of Technology, USA, is expected to bridge the digital divide. Research will focus on the development of low-cost computing devices, better connectivity for the rural masses, and design of low-cost learning tools creating new market opportunities for embedded smart chips.

The Central Government's proposal to set up an India portal, a one-stop destination for various public utilities and services including tax collection is expected to benefit smart card technology providers. System integrators and value-added resellers are likely to control the market with their ability to provide turnkey solutions.