The flattening EMV card market in China and a dip in U.S. EMV card shipments, due to overstocking, is set slow down. The Chinese and U.S. EMV payment cards markets are experiencing double-digit year-on-year growth, responsible for more than 50% of 2.8 billion EMV cards shipped worldwide.
However, a new report from ABI Research finds the proliferating negative discussions among industry players to be over exaggerated and suggests vendors focus on new card form factors and emerging regions to drive future growth.
Vendors are already reporting reductions in U.S. orders, and the CPI Card Group adjusted its 2016 earnings expectations downward. Though unit volume growth will slow, the continued transition toward contactless payment cards with higher associated average selling prices (ASPs) will help boost revenues. And India will be a good, emerging growth market, as it recently sets its own EMV mandate.
But established and saturated regions need to look at new biometric and Dynamic Card Verification Value (dCVV) card technologies to drive future revenue growth. The new form factors capitalize on consumer safety and will gain momentum as the focus turns to enhancing physical to CNP (card-not-present) fraud.
Biometric cards featuring integrated sensors that identify their card holders will provide an additional strong authentication method for physical payments. Display cards with dCVV and/or one-time password (OTP) functionalities will replace the static three-digit card verification code currently located on the rear of debit and credit cards with a small display screen that changes the card holder’s unique card verification code every few minutes.
ABI says the new card models will open up the next wave of revenue growth opportunity within the payment cards market for secure IC and smart card vendors alike.
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