This year marks the 50th anniversary of the smart card. Invented in 1974 by French innovator Roland Moreno, the smart card has evolved from a simple data storage device to the cornerstone of secure digital transactions and identification.
This small silicon chip has successfully established itself over the past 50 years. Now indispensable, it is part of our daily lives through bank cards, identity documents, passports, driver’s licenses, health cards, and SIM cards.
Smart cards have significantly improved security in financial transactions and personal identification. They provide a secure and convenient way to access services and information, making them essential in modern society. From making payments to accessing secure facilities, smart cards have streamlined numerous processes, enhancing both security and user experience.
For more details read the Thales article: Smart cards – An illustrated guide ( 2024)
What is a smart card?
A smart card is a small portable computer, usually the size of a credit card, without a display and a keyboard. It integrates a microprocessor, some memory, and some apps.
The circular metal contact is vital to connect to the chip below and activate the card electrically. It’s used with a contact or contactless card reader (POS for payments, at the ATM, or even on your mobile phone).
Why? The card reader (or mobile phone) brings the 3V or 1.8 voltage to activate the chip.
Smart cards offer enhanced security and convenience, making them ideal for various applications, including secure transactions, access control, and identification purposes.
The Evolution of the Smart Card
Although Roland Moreno patented the memory card in 1974, smart card research began as theoretical concepts, but practical technology only emerged around 1976. In 1977, Motorola Semiconductor and Bull produced the world’s first smart card microchip. However, France’s initial smart card test in 1980 faced challenges due to limited technical infrastructure and consumer reluctance.
In March 1979, Michel Hugon from Bull CP8 was the first to design and develop a microprocessor-based card combining a processor and local memory. He invented the computerized smart card.
The big step forward the global Adoption was the EMV standard, introduced in 1994, revolutionised smart card usage. It allowed all merchants to process smart cards at any point of sale (POS), regardless of the card issuer or brand. Smart cards gained popularity due to their blend of confidentiality, practicality, and cost-effectiveness.
Brief history of smart cards
. 1979: early developments in the banking sector
. 1995: first SIM cards
. 1999: first national eID card (Finland ID)
. 1999: first smart cards for transport
. 2001: The Department of Defense first issued Military CAC credentials for physical access control and secured logical authentication
. 2003: Micro-SIM launched
. 2003: Chip and PIN cards began to be issued in the UK.
. 2005: first ICAO-compliant electronic passport (Norway passport)
. 2010: Smart credit cards arrived in the US.
. 2012: Nano-SIM introduced
. 2018: first biometric contactless payment card, eSIM, launched (thickness is <1 mm or 0.039 in)
. 2019 First 5G SIM available
. 2021 First voice payment card launched
. 2023 First GSMA-certified iSIM
For more details read the Thales article: Smart cards – An illustrated guide ( 2024)
Worldwide statistics
In the form of credit cards and SIM cards, smart cards are the most common form of IT processing power on the planet. It is estimated that between 30 to 50B smart cards are in circulation today.
According to the Smart Payment Association (SPA), the trade body of the cards and mobile payments industry, based on data collected from its own members and participants of the SPA Market Monitoring Advisory Council, the annual analysis of worldwide smart payment card and module shipments reveals a total shipment volume of 3.2 billion units were delivered in 2023 – up from 2.6 billion units shipped in 2022.
In 2023, global eco-friendly card shipments represented 21% of worldwide total SPA card shipments. This strong share increase (+7 percentage points compared to 14% in 2022 figures), highlights the pace and scale at which banks are transitioning away from first-use PVC as a payment card material.
50% of these eco-friendly card shipments were for the European market, demonstrating the leadership of this region in the transition, while 40% were delivered to the Americas.
A growing consumer preference for contactless payments helped propel a significant uptick in contactless card shipments in markets around the world. Accounting for 88% of total global shipments recorded for 2023 (up 4 percentage points on 2022 figures), SPA members reported an impressive 27% increase in overall contactless shipment volumes. With every country in the world now issuing dual interface cards that support contactless payments, the lowest regional share of contactless shipments hit 78%, with the highest achieving 99%.
According to the 11 February 2023 Eurosmart forecasts, smart card markets will probably exceed 10 billion units in 2022.
2022 market share
Telecom: Telecom (SIM cards) accounts for 43% of the market. Mobile Device Manufacturers reach 5.0%
Financial Services (payments and banking cards) for 44.6%
Government & Healthcare (eIDS and e-passports) for 5.3%
Transport: 2.2%
What the future holds
Smart cards have continued to evolve with cutting-edge features in recent years:
Public Key Infrastructure (PKI) was introduced to ensure secure transactions in e-commerce applications.
Fingerprint recognition technology replaced traditional PINs on personal cards, enhancing security.
The future holds exciting possibilities as smart cards integrate biometrics, combining PINs with unique physical characteristics for even stronger security.
As technology continues to advance, smart cards are expected to integrate with emerging technologies like blockchain, post-quantum technologies and artificial intelligence. And given the ever-increasing demand for dedicated, certifiable, and tamper-resistant hardware, smartcards will no doubt expand to further use cases, as mandated by the upcoming eIDAS2 regulation for the EUID wallet.
These integrations with emerging technologies will further enhance their security and functionality, ensuring that smart cards remain a vital component of digital interactions.
A $17B market in 2026
According to Markets and Markets’ recent research report, the smart card market value is expected to reach $16.9 billion by 2026. Currently, smart cards and card readers account for more than 75% of the market.
The related market for software comprises management system software and databases. In addition, consulting, support, and maintenance services are also crucial.
The Asia Pacific is forecast to take the largest share of the market, as reported by the same study.
The Mordor Intelligence market study, excluding readers and services, sizes the smart card market at USD 8.14B in 2019 and 11.50B by 2025.
For more details read the Thales article: Smart cards – An illustrated guide ( 2024)
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
