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Asia Pacific Data and Analysis for Banking and Payment Sector
Frost & Sullivan, Aug 2005
Post Migration to Smart Cards, the Asia Pacific Financial Cards Industry Moves toward Convergence
The banking and payment sectors in the Asia Pacific region are continuing to migrate from magnetic stripe-cards to chip- or smart card-based cards - a shift that has been expensive for the parties involved. Companies now have to attempt to make optimal use of the infrastructure they have invested in to break even or make profits. Although no clear post migration ‘killer application’ has been developed yet, the financial card industry is definitely moving toward convergence. For most countries in the Asia Pacific, automated teller machine (ATM), debit, credit, loyalty, and transit applications are some applications that are expected to appear on a single card.
This Frost & Sullivan research service provides data and analysis on the Asia Pacific banking and payment sector. It provides rapid updates, forecasts, and estimates on several markets such as banking cards, payment cards, banking terminals, and payment terminals in Japan, South Korea, Malaysia, Taiwan, and Thailand. It enables companies to align their positioning strategies to benefit from the changing sectors and obtain maximum return on investment.
Convergence to Have a Profound Impact on the Financial Smart Card Industry
The banking and payment sector participants are making dedicated efforts to incorporate multiple applications onto a single card and mount financial applications such as e-purses and credit functions onto a mobile platform. These moves are expected to provide tremendous opportunities for companies in the financial card and the smart card industries.
Since many smart card industry participants are already experienced in implementing the chip migration process, institutions that issue cards have to leverage this knowledge to create sophisticated cards. These institutions are also likely to have had more time to strategize their chip migration efforts and determine the appropriate products and offerings that can help them capitalize on smart card technology, says the analyst of this research.
New Opportunities for Financial Card Companies Post Chip Migration
The migration to chip-based cards offers financial and smart card companies the opportunity to provide immense versatility in their product offerings. Some benefits of chip cards include greater storage space, the introduction of contactless cards, and convergence of multi-applications. This has opened up several new growth opportunities for those equipped to take advantage of them.
As financial card markets in the Asia Pacific region mature, competition is likely to increase correspondingly. This trend is already beginning to manifest in markets such as South Korea and Japan, where there are more than 100 million cards in circulation. Various card-issuing institutions have started enhancing their product offerings, notes the analyst. Some efforts on that front include projects such as NTT DoCoMo, Inc.’s Felica card, the Visa Wave contactless pilot tests, and SK Telecom’s mobile banking and mobile payment services.
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