The global biometric card market size was valued at USD 15.58 million in 2021, it is growing at a CAGR of 116.4% during the forecast period (2023–2031).
A type of identification known as biometric payment cards analyzes and recognizes individuals based on their physical and behavioral traits. Among them are body movement, voice recognition, facial patterns, iris, retinal scanning, fingerprints, and facial patterns. Smart cards with various security features, including an optical stripe or barcode, a holographic security image, and an embedded chip, are also present in biometric cards. These cards' biometric sensors give users the safest payment method, driving the market forward.
Biometric identification cards can be used for various purposes, especially by businesses and individuals who value safety above all else. Biometric cards offer an extra layer of protection against duplication and theft for companies operating in highly competitive industries. ID cards with advanced features are used in the public sector, in research facilities, and some educational institutions.
Integrating the biometric sensor is one of the transformative innovations needed to upgrade the payment card to the next generation. In addition to serving as a long-lasting security authentication mechanism, it enables the payment card to evolve from a secure and straightforward authentication medium toward one that can aid financial institutions and issuers in differentiating and generating new levels of brand stickiness, personalizing experiences and facilitating access to more markets and opportunities via financial inclusion initiatives and IoT market adjacencies. Now, financial inclusion is an enabler of resilience and growth. Every country needs an inclusive financial system as it accelerates the quality of life through its contribution to education, economic digitization, reform of leisure time, and increased access to resources for household and individual development.
The authorities are working harder to extend the authentication process due to the significant increase in cyber threats globally. Hackers looking for sensitive information must pass through an additional layer of security and authentication. MFA (Multi-Factor Authentication) is a component of IDaaS. It ensures that only those with the appropriate permission can access resources. A pressing need for authentication measures, such as fingerprint scans or text messages, to access accounts and safeguard businesses from data breaches is being created by the global increase in cyberattacks. The contactless card has an additional security layer thanks to biometric data about the user. Over the forecast period, it is anticipated that growing efforts to curb card misuse and give users a seamless experience will boost market growth.
Compared to the technology used in the currently in-use payment cards, the technology needed for biometric authentication is more expensive. Although consumers might be willing to pay a small premium for a more secure payment card, the biometric card's current price, which is anticipated to be around USD 20 per card, prevents widespread user adoption. The cost of Gen 2 biometric cards has increased significantly due to the inclusion of distinct power management units (PMUs) and low-power MCUs for feature extraction, as well as components like antennas. The Gen 3 cards, however, are anticipated to lower the cost per card, which could lessen the impact of this restraint on the market under investigation.
With the introduction of facial recognition and fingerprint touch sensors integrated into smartcard technologies, contactless smartcard transactions are poised to propel market growth. For various transactions and identification purposes, fingerprint and facial recognition offer adequate security. The growing use of cryptocurrencies across many regions has increased the demand for a safe and secure framework for various payment methods. Therefore, the market for contactless and other biometric tap smart cards is anticipated to increase over the forecasted period. Many businesses are already broadening this aspect of their product offerings.
The global biometric card market is segmented by application and end-user verticals.
Based on the application, the global biometric card market is bifurcated into payments, access control, and government id and financial inclusion.
The payments segment is the highest contributor to the market and is expected to grow at a CAGR of 158.54% during the forecast period. In the financial services industry, biometric technology is becoming more popular as a safe and practical replacement for passwords and PINs. This technology can simplify consumers' lives and give them access to more valuable options for confirming their identity. Paying with an EMV card is now easier than ever, thanks to a fingerprint sensor on the card body. Without entering a PIN on the Point-of-Sale (POS) Terminal, transactions can be completed in contact or contactless modes with a touch. Removing the cap or limit on contactless payment transactions is another significant advantage of biometric payment. Users are securely authenticated using their fingerprints and can benefit from contactless convenience for any amount.
Identity documents are one of the many applications where biometrics are becoming increasingly common. Other security technologies, like smart ID cards and chips, are typically combined with it (for electronic passports). Over a billion people are thought to travel through or across the borders of the European Union (EU) annually. To ensure easy travel between member states, as well as to reduce terrorism and organized crime simultaneously, this encouraged a regulation that prompted stringent and consistent identification measures.
Based on end-user verticals, the global biometric card market is bifurcated into BFSI, retail, government, healthcare, and commercial entities.
The BFSI segment owns the highest market and is expected to grow at a CAGR of 158.54% during the forecast period. Across many banking sectors, biometric payments are significantly on the rise. As this technology makes identification much simpler than more straightforward, convenience is the primary driver of interest. Utilizing biometric payment methods improves safety and security for both banks and customers because each person's biometric features are unique. Customers of banks like BNP Paribas and NatWest can now get biometric payment cards. Chase, Citi, Bank of America, and Wells Fargo have made several biometric ID options available, including fingerprint, voice, eye, and facial recognition. Several nations are displaying a preference for implementing biometric card technology for payments. India, for example, has expressed a strong interest in incorporating touchless biometric solutions into the nation's banking system, according to IDEMIA. As a result, several players actively release their products in the markets with the fastest-growing demand.
The use of biometric cards can have a significant positive impact on the public sector. These cards are acceptable as IDs, access cards, and other official documents, such as subsidy cards.
Biometric identifiers, which authenticate or verify identity based on physical characteristics like fingerprints, iris, face and palm prints, gait, voice, and DNA, are being incorporated into ID databases in many countries as they modernize their ID systems. In addition to being a reliable method of accurately identifying people, biometrics are expensive and pose serious risks to privacy and individual freedom. Many governments have started gathering, storing, and using biometric identifiers to create national IDs. It is asserted that biometric identification and authentication aid in border security, immigration, employment verification, criminal prosecution, and the fight against identity fraud and terrorism.
North America Dominates the Global Market
By region, the global biometric card market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World.
North America is the most significant revenue contributor and is expected to grow at a CAGR of 153.53% during the forecast period. The biometric card has a sizable market in North America, with the United States holding a sizable portion of the market there. Many small and large market players in the nation can be credited for the enormous demand. The surge in activity, which primarily contributes to expanding the biometric card market in the United States, is being driven by various end-user industries, including BFSI, retail, and others. Financial smartcard companies are also emerging and actively seeking to integrate fingerprint sensors with their products, in addition to the government sectors. The market environment has seen partnerships enhance their position in the biometric card market and complete their product line to embrace the convenience and security of contactless payments.
Europe is expected to grow at a CAGR of 155.98% during the forecast period. Europe is one of the biggest markets, with many vendors operating there. The retail, government, and healthcare sectors make up most demand generators. The region is also growing with numerous accelerator programs supporting the start-up ecosystem. Cards with contactless technology are facilitating market expansion. Additionally, the BFSI sector of the area has seen significant growth in the use of biometric payment cards. The surge in demand has benefited businesses that offer biometric payment cards. To guarantee consumer privacy and maximum security, market vendors are also actively obtaining different certifications and strengthening operations.
The fast-paced Asia-Pacific region has a healthy market for payment cards, even in the face of the rising popularity of smartphones. Biometric payment cards are the way of the future in the region. Soon, several market vendors will have a genuinely disruptive offering that will enable them to significantly increase the number of banking customers in the area and integrate it with different end-users. However, the growing demand for biometric authentication systems among other end users, such as the retail, gaming, banking, and financial sectors, as well as hospitals, is significantly impacting the market's growth nationwide. The production and distribution of biometric cards accelerate market expansion in numerous nations and bring commercialization closer. For instance, Zwipe stated that Toppan Forms Card Technologies (TFCT), a partner with a Hong Kong address, started small-scale manufacturing with the commercialization of biometric payment cards in the Hong Kong and Macau markets in June 2020.
The rest of the world market, which includes Latin America, the Middle East, and Africa, has increased its share significantly over the projected period. All over the world, biometric payment cards are currently being issued. Worldwide, local card manufacturers and banks worked with various market vendors like Zwipe. Additionally, it offers its Zwipe Pay ONE biometric card in Chile and Latin America, Lebanon and Iraq, and Morocco in North Africa. The market's vendors collaborate to advance fingerprint, biometric authentication, and emerging payment technologies. ExtoAfrica, a division of ExtoLabs, brings its secure, user-friendly, and affordable solution for payments, marketing, and digital identity to Africa to advance its vision of financial inclusion. Due to contactless payment options available during the pandemic, the banking industry is experiencing several innovations.
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