COVID-19 prompts 11% drop in global ID smart card market
Tech market advisory firm ABI Research has predicted that worldwide shipments of smart government ID credentials will fall from 617.6 million in 2019 to 547.5 million in 2020, following the COVID-19 pandemic. With most borders closed and governments prioritising aid and support, many projects have experienced a reduction in demand or postponement, which will result in a sharp market decline in 2020. Sam Gazeley, Digital Security Analyst at ABI Research, noted that the markets for passports and national IDs have experienced an issuance downturn as governments prioritise health care and financial support for citizens.
“The typical churn rates for passports have fallen by 50–60% in some countries as closed borders and safety concerns deter citizens from renewing the high end-user cost document. Smart national ID programs have also been delayed due to a shifting of attention and will likely not be seen until 2021 at the earliest. As one example, the deadline in the United States for Real ID has been extended a year as states shift priority for tackling the pandemic,” said Gazeley.
Smart national ID issuance is forecast to decline 2.3% from 2019 to 2020, falling to 296 million units. Projects that have already begun issuance, such as in Turkey, Italy and Bangladesh, will continue to issue, though at a slower pace. Programs in the Philippines, Ghana, Uganda, Kenya and Nigeria have postponed enrolment and issuance until 2021. The issuance of e-passports will be lower in 2020 when compared to 2019 issuance levels, with ABI Research predicting a year-on-year decline of 34.9%, falling to 119 million units. With most borders closed and almost no international travel, demand and replacement rates for the credentials have dropped, though e-passports will likely pick up again in 2021 as holiday destinations open borders. However, issuance will still struggle to reach pre-COVID levels.
The COVID-19 pandemic has significantly impacted the government ID market, with its recovery back to normal issuance levels dependent on a range of factors. The passport market depends on countries reopening borders and to which countries citizens can travel. National ID programs will depend on whether governments can spare capital for infrastructure in the wake of an economic downturn and could lead to further delays.
Gazeley notes that the investments and budgets remain available for credential programs, but delays are typically caused by manufacturer shutdowns and reductions in face-to-face interactions within the enrolment process. This could be an opportunity to leverage mobile credentials and digital ID wallets, as doing so would reduce issuance costs and create end-to-end touchless experiences and service access related to remote enrolment and onboarding, service consumption and digital transactions, leveraging contactless communication technologies.
“The use of mobile credentials enables governments to further automate systems and services for citizens looking for a touchless, digitised approach and provides a way to ‘pandemic-proof’ government service access and G2C (government-to-citizen) and C2G (citizen-to-government) communications,” said Gazeley.
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