U.S. and Canada Smart Card Survey Shows Usage Surged 37% in 2000

U.S. and Canada Smart Card Survey Shows Usage Surged 37% in 2000

Smart Card Alliance’s Research Sets Industry’s First Official Baseline by Documenting Card Shipments in both 1999 and 2000

Survey Shows Largest Growth Was in Financial Market Segment

New York, NY, October 11, 2001–Smart card usage in the United States and Canada increased 37% in 2000 from 1999, according to a report from the Smart Card Alliance, the nations largest not-for-profit organization dedicated to accelerating the widespread acceptance of multiple application smart card technology. The Smart Card Alliance announced this and other research results at their Annual Meeting yesterday in McLean, Virginia.

“This research provides the first accurate data on our industry in the 21st century,” said Paul Beverly, Chairman of the Smart Card Alliance. “We’ve now established a benchmark that will be particularly useful to every organization considering a smart card program. The survey results clearly show the increased level of card issuance and adoption, and highlight the importance of implementing smart card programs at this time. Companies and organizations not doing so will surely miss an opportunity to capitalize on the benefits of smart card technology.”

The new study, conducted by KPMG’s Information Risk Management practice, surveyed all major smart card manufacturers supplying the United States and Canada, for the years of 1999 and 2000. The Alliance plans to report 2001 statistics in the first quarter of 2002.

Smart cards contain a microprocessor chip with the capacity to interact with and operate among networks. More than merely storing value, the smart card verifies, authenticates, and protects the cardholder’s identity and information, over online and other networks. Its ability to communicate with other systems gives the smart card the critical capacity of a computer chip in the user’s pocket. Smart cards are used in all sectors; examples include ID cards, payment cards for transit and parking, SIM cards for use with mobile phones, and credit cards by major financial institutions and retail companies to ensure security of transactions and allow for loyalty programs.

The total number of smart cards manufactured for use within the United States and Canada for 1999 was 20,775,000. In 2000, the research showed that this at number grew to 28,430,000–a 37% growth.

The fastest growing market segment between 1999 and 2000 was the financial market sector with a growth rate of 244%, reflecting the response of card associations, banks and American Express to consumer demand for expanded card services.

“These results will assist the Alliance and its membership in gauging market trends and adoption of smart cards, as well as provide a means of identifying opportunities to further accelerate the rates of growth,” commented Donna Farmer, CEO and President of the Alliance. “We hope to provide our members with continued research that heightens understanding and builds a business case for smart cards.”

Nine vertical market segments were used to characterize growth rates by specific applications, including Government, Wireless/Telephony, Transit and Parking, Financial, and Retail. Areas that experienced significant microprocessor card growth rates between 1999-2000 include:

  • Corporate Campus use–growth of 125%.
  • Education Campus use–growth 116%
  • Wireless use–growth 89%

“The increased activity in these markets underlines that smart cards are the ultimate device for portable and secure network authentication,” said Mr. Beverly.

“Numerous applications in the Government and Transit sectors are already established successes,” said Dan A. Cunningham, Chairman of the Alliance’s Market Research Committee. “Given the recent public interest in the security and privacy advantages of this technology, we fully expect public and commercial implementation of smart cards to rise.”

The Smart Card Alliance Annual Meeting brings together hundreds of smart card industry leaders for three days of education and conference programs focused on the crucial opportunities and obstacles facing businesses, government and individuals in this new era of digital trust.

The full report titled, “United States and Canada Smart Card Shipment Survey,” will include data from 2001 and will be available in the first quarter of 2002. Further information about Alliance research projects in progress is available at http://www.securetechalliance.org.

About the Smart Card Alliance

The Smart Card Alliance is a not-for profit, multi-industry association of over 100 member firms working to accelerate the widespread acceptance of multiple applications for smart card technology. Through specific projects such as education programs, market research, advocacy, industry relations, and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance also is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. For more information please visit http://www.securetechalliance.org.

About KPMG

KPMG LLP is the accounting and tax firm that understands the needs of business in the global economy. We help our clients by devising results-oriented business strategies, providing insights that help them stay ahead of the competition and achieve market-leading results. KPMG LLP is the U.S. member firm of KPMG International. KPMG International’s member firms have more than 108,000 professionals, including 7,000 partners, in 159 countries. KPMG’s Web site is http://www.us.kpmg.com.