Technology | Media | Telecommunications

Tuesday, August 04, 2015

Smart Card App Adoption Moves Slowly in Government

Smart card technology use-cases typically include the authentication and identification of users across multiple applications and vertical sectors. This technology is most often associated with the financial services, telecom, government and transportation markets, but the application scenarios are evolving as other sectors explore the benefits.

According to the latest market study by ABI Research, in 2014 a total of 454 million government ID smart card credentials -- primarily consisting of driver licenses, healthcare, national ID cards, and passports -- were issued, resulting in a year-over-year growth rate of 2.4 percent.

Over the past two years the government ID market has been evolving slowly, reflecting short-term expectations. The worldwide market continues to be affected by ongoing prior project delays, along with an overall lack of new projects or contracts awarded in 2014.

Russia and Japan placed a hold on their respective smart national ID card projects. Moreover, France terminated its planned smart driver license project until further notice, and suspended issuance of a new smart national ID card.

Brazil also suspended its national ID card program, with no resume date announced. According to the ABI assessment, the global government ID market will continue its reliance upon existing renewals, with flat growth likely to continue throughout 2015 and into 2016.

That being said, the ongoing delays alongside new projects currently outlined to begin issuance in the 2016 to 2017 time-frame could provide a boost to future market expectations. It's likely that new project deployments -- such as the national ID card issuance in Nigeria and Bangladesh -- will coincide with those prior projects that have been delayed.

"From a smart card and secure IC vendor perspective, forecasting project timelines and revenue expectations is getting increasingly difficult," said Phil Sealy, senior analyst at ABI Research.

Politics play a major role in the overall success or failure of any project, further exacerbated by the majority of projects which are non-mandated and specific to one country, which can be delayed or cancelled at any given time.

ABI believes that successful vendors will require a level of patience and have a clear understanding of localized application drivers, barriers and market dynamics -- in order to better anticipate potential problem projects on the horizon.