Contactless smart cards are the largest RFID sector by far and the business is booming. From the $6 billion China national ID card scheme to the large sales of transport cards and tickets, transport-based purse cards replacing cash and secure access cards, this is a sector with many profitable suppliers, issuers and outlets.
RFID smart cards have been successful as transport cards - typically for buses or trains in place of tickets and often for several modes of transport. In 2005, this started to change with about 20 million credit and debit RFID cards being issued in the US.
IDTechEx forecast a boom in RFID smart cards and related payment key fobs as a result of the reduced cost of the latest contactless card systems resulting in lower cost of ownership and the demand for new national identification cards.
Government/ health cards became increasingly popular in 2005, and are predicted to be the smart card success story of 2006, with increases of 42% forecast. A number of government ID and health card projects, implemented in countries such as Oman, Australia, Austria and Belgium, led to an increased demand for both memory and microprocessor cards in 2005, especially microprocessors. This demand shows little sign of slowing. However, many use contact technology which is not RFID and is unreliable and user unfriendly compared to RFID. e-Passport projects - all using RFID technology - showed strong development in 2005, particularly in Europe where some reached the pilot and implementation stages. It is these schemes in particular that are forecast to drive the sector growth in 2006.
China will issue about 970 million cards to adults by 2008 if its plan is met, then issue only replacements and cards for those becoming adults in subsequent years. Transport smart cards in 2006 include Korea completing the replacement of 20 million with a new version that has both contact and contactless interfaces. The new contacted interface is to deal with bank payment systems.