The Asia Pacific region has immense potential in untapped markets for smart cards and various newly implemented small scale projects are likely to fuel the growth of these markets.
"Contactless modes of payment have also been successful in the Asian countries despite the low acquiring power of the majority of citizens here," says Frost & Sullivan Research Analyst Navin Rajendra. "Through proper coordination and planning, these markets could provide a major market share of smart cards in Asia."
In countries such as Thailand and the Philippines, the concept of small value payments through contactless cards or short message service (SMS) is already popular. Thailand has also implemented the national ID project and Vietnam is soon to follow suit, indicating the influence of a country’s smart card industry on its neighbor.
However, the national ID card issued in Thailand has not yet being fully utilized due to the public’s lack of awareness about the benefits of the ID card. Educating the public about the advantages of these cards is critical for the success of any smart card project.
As for EMV cards, in some of the countries in Asia Pacific, less than a quarter of the population has a banking account, let alone credit or debit cards. It does not make sense to campaign for EMV introduction to combat fraud in these countries.
Moreover, in countries with low fraud rates, there is simply no business case for the migration to EMV-compliant cards. This initiative lacks support since the cost of migration outbalances the losses incurred from fraudulent activities. Therefore, rather than focusing on the security aspects of smart cards in these countries, it pays to introduce directly the benefits of contactless payments.
Although many participants are averse to this idea and feel that contactless cards should be introduced only after people are sufficiently familiar with contact EMV cards, by moving directly to contactless cards, smart card manufacturers/system integrators can do away with poor infrastructures and implement their own efficient systems.
The prevailing mediocre infrastructure for payments and mobile connections deters many market participants as they see this market as a non-profitable proposition. However, this scenario is most conducive for the industry since new smart card systems may be introduced to avoid complications from system upgrades and compliance.
"In addition, there is lack of planning and coordination between the participants in the smart card value chain," remarks Rajendra. "By introducing standardized methods, proper communication, and systematic planning, this untapped region could prove to be a lucrative market for the smart card industry," he concludes.
If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the Opportunities for Smart Cards in Untapped Markets, then send an email to Donna Jeremiah, Corporate Communications, at djeremiah[.]frost.com, with your full name, company name, title, telephone number, fax number, and email address. Upon receipt of the above information, an overview will be sent to you by email.
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