Strategic Analysis of the South African Smart Card Markets: Industry Research Report

Strategic Analysis of the South African Smart Card Markets

Published Date: May 2006

Published By: Frost & Sullivan

Page Count: 83

Order Code: R1-4868

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Description

Table of Contents

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Research Overview

This Frost & Sullivan research service titled Strategic Analysis of the South African Smart Card Markets provides an overview of the growing use of smart cards in South Africa. The study examines market drivers and restraints and details trends anticipated to support market growth in future. An analysis of key sectors and competitors provides the reader with in- depth market information. In this research, Frost & Sullivan's analysts thoroughly examine the banking, telecommunications, government as well as other sectors utilising smart cards.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By Application:

Telecommunications
Banking
Government
Additional smart card markets

Market Overview

Need for Enhanced Security to Result in Increasing Adoption of Smart Card Systems

The introduction of smart cards by the banking and government sectors is likely to support the development of the smart cards market in South Africa over the next 2-3 years. Currently, the telecommunications sector dominates the overall market due to the high penetration of mobile phones. However, as this sector approaches maturity, the banking and government sectors will exhibit significant growth. Due to consistent losses caused by the high occurrence of fraud, the banking sector is pursuing the adoption of smart card technology, as it offers higher levels of security. As the Europay, MasterCard and Visa (EMV) migration is entering its final phase, its completion is expected to result in the roll out of smart cards in the banking sector in the third quarter of 2006.

At the same time, the South African Government has embarked on a national identification programme that will result in the roll out of about 30 million smart cards over the next five years.

Market Growth to Hinge on Increased Awareness of Smart Card Technology Benefits

Despite the current undertaking of the South African Government to implement the national identification programme, the process has witnessed several delays. Market participants wanting to participate in government sector projects will need to ensure the suitability of their strategy to this particular industry. To this end, most companies have formed divisions that focus solely on government contracts. This assists with planning for and dealing with delays that commonly occur in government projects. Companies will also need to cater to the specific requirements of the government sector and address issues such as Black Economic Empowerment (BEE)."

The lack of standardisation in several sectors is adversely affecting the adoption of smart cards, giving rise to interoperability issues. Hence, market participants will need to invest in addressing interoperability issues to promote market growth. In addition to this they will have to ensure that they undertake effective education and training campaigns to ensure that end-users are fully aware of the benefits and functionalities of smart card technology.

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