Plastic cards are used in a variety of applications across markets such as retail, hospitality, manufacturing, government, education, and transportation and logistics. Technological advances have resulted in allied technologies such as near-field communication (NFC) and biometrics being used in certain applications such as loyalty and gift cards that have witnessed a decline in demand in recent years. Despite being deployed largely across applications, is the market for cards and card printers likely to be phased out? We believe that the commercialization of biometric modalities through the introduction of fingerprint sensors in Apple and Samsung smartphones has resulted in increased understanding and trust among customers toward using these technologies. Hence, although not immediate, this is expected to impact the demand for cards and card printers across applications.

Key Trends

Growth opportunities for the card printers market are high in the immediate future. The installed base for cards in banking and finance is huge and a key driver for the card printer market. Issuance of cards has shifted to being done at the branch (instant issuance) as against being done centrally (how it was a few years ago). Instant issuance is increasingly becoming a mandate across financial institutions driving the demand for contactless chip-based cards.

An increasing number of fraudulent activities globally has also paved the way for the EMV standard. Implementation of EMV cards and use of strong authentication techniques have significantly reduced card fraud losses. EMV migration was embraced by Europe and Canada, resulting in a significant reduction in card fraud losses. However, the US continues to be vulnerable and is still transitioning to the use of EMV-based cards.

Another interesting trend gaining traction is the importance of the environmental impact of plastic cards. This is expected to drive emphasis on using eco-friendly materials, which is set to impact the market after five years.
Notwithstanding the opportunities, product differentiation is identified as a key challenge for card printer vendors in addition to the rise of allied technologies. The portfolios of printers offered by top companies are similar and hence vendors are searching for avenues of differentiation. Pricing is one of the differentiating factors, especially in the low-end product markets and regional markets such as Latin America and Asia. However, vendors cannot enhance their share just by focusing on pricing strategies and compete on factors such as performance, reliability, design, and ergonomics. After-sales support and managed services are two additional areas of focus for differentiation for card printer vendors.

Macroeconomic Factors Offer a Bleak Outlook for Desktop Card Printers

One of the major uses of smart cards is access control. Internet of Everything (IoE) has and is continuing to revolutionize traditional applications. Organizations today are evolving as the concept of a connected world is increasingly becoming a reality. Organizations are beginning to use biometric access control, which is a major threat to the growth of card printers. Mobility and on-the-go operations are trends that have taken precedence in today’s world. While bring your own device (BYOD) and remote operations are being initiated, end users are increasingly becoming interested in and accustomed to the convenience the technology offers.

Banking is one of the biggest applications for cards and card printers. However, the shift in customer preference toward convenience and security is expected to hinder the growth of the card printers market. Urbanization has been the key factor driving the need for enhanced safety, security, and convenience. Rising demand for smartphones is a prime example of this trend. Apple’s introduction of a fingerprint sensor in its iPhone product line has resulted in enhanced customer confidence with regard to biometric use in mobile phones.

Smartphone volumes globally have witnessed considerable growth with evident increase in the number of users especially in emerging economies such as Brazil, India, and China. With growth in smartphones, traditional commerce has shifted to eCommerce and mCommerce, leveraging the average time spent by a person on the phone. This has paved the way for new business models with transactions being carried out on mobile phones. Developed economies are on the forefront of mPayments, with banks increasingly adopting biometrics for transactional authentication as security and convenience takes center stage among customers.

APAC: Key to Short-term Opportunities

Despite being established markets, North America and Europe are expected to witness sluggish growth in the short term. Opportunities in the short term are expected from India, China, and the ASEAN region, with finance and government projects being a key driver. Some regional government projects in APAC include:

  • e-CGHS project: An eHealth card, aimed at benefiting pensioners who find it difficult to visit Central Government Health Scheme (CGHS) centers for its renewal
  • Health Management Information System (HMIS) application: This initiative will not only monitor the performance and quality of the health services being provided under the NHM (National Health Mission), but also provide effective healthcare to the rural population throughout India
  • OCI Cards: Proposal to issue Overseas Citizen of India or OCI cards up to the fifth or sixth generation of expatriate Indians
  • Green Card (China): Card for overseas ethnic Chinese; China will let foreign payment card firms operate in the country
  • Japan is considering mandatory personal IDs for its citizens by 2021, linking personal bank account, health, and vaccine records to a centralized government database

The Aadhaar project in India enrolled over a billion people and each citizen was provided with a smart card with embedded biometrics. This enhanced the growth prospects for card printers.

Conclusion

The immediate future of the card printer market looks positive but the long-term prospect is under threat posed by substitutes. The growing IoT ecosystem is increasingly paving the way for changing customer preferences and newer business models that focus on security and convenience of customers.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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