Let’s take a closer look at the driving forces behind these developments, highlighting key trends in sustainable card issuance and the widespread adoption of contactless technology.
The global rise in smart payment card shipments
The boost in 2023 shipments came from meeting the postponed demand from 2022 and replenishing inventory levels. After the chip shortage disrupted production, SPA members worked to catch up with rising consumer and business needs for payment cards. As a result, SPA members delivered a notable increase in card shipments, with contactless payment solutions playing a significant role.
Sustainable payment cards take the lead
In 2023, sustainable payment cards comprised 21% of worldwide SPA card shipments, up from 14% the previous year. The surge reflects growing environmental concerns among consumers and businesses. Many have turned to eco-friendly card issuance strategies as banks and payment service providers face increasing pressure to reduce plastic waste and carbon emissions.
So, what’s driving the growth in sustainable cards?
- Corporate ESG mandates: Governments and organizations are pushing for environmentally responsible business practices.
- Consumer demand: More consumers prefer eco-friendly products, including payment cards made from recycled or biodegradable materials.
- Innovations in materials: SPA members have pioneered using materials like recycled PVC, R-PETG (recycled polyethylene terephthalate glycol), and ocean-bound plastic.
Europe led the way, accounting for 50% of these eco-friendly card shipments, with the Americas following closely at 40%. The industry’s shift toward sustainability goes beyond the card body itself. Innovations now include using eco-friendly inks, envelopes, and packaging materials alongside new processes that support end-of-life card recycling.
Contactless payments dominate the market
Contactless payments have quickly become the norm for consumers worldwide. In 2023, 88% of all SPA card shipments were contactless-enabled, up four percentage points from 2022. Driven by near-field communication (NFC), contactless payments allow consumers to tap their cards on a terminal, offering a fast and secure payment method.
Why contactless payments?
- Convenience – No need for PINs or signatures; just tap to pay.
- Security – NFC technology ensures that transactions are secure and encrypted.
- Health and hygiene – The COVID-19 pandemic increased awareness of touch-free payment methods, making them more appealing to consumers.
By 2023, every region worldwide issued dual-interface cards supporting contact and contactless payments. The lowest regional share of contactless shipments stood at 78%, with the highest hitting 99%, showcasing how quickly this payment method has taken root worldwide.
Countries that were slower to adopt contactless payments have since caught up as more consumers appreciate touch-free transactions. The increase in shipment volumes is a testament to the growing reliance on NFC technology across all regions.
The road ahead for smart payment cards
As the payment card industry evolves, the trends seen in 2023 offer insights into the market direction. Sustainable and contactless payment cards may become more prominent, driven by technological advances and changing consumer preferences.
Below are key trends to watch in the card payments market segment:
- Eco-friendly innovations: Expect continued growth in producing sustainable payment cards, with an increasing focus on using recycled and bio-based materials.
- Wider adoption of contactless payments: With NFC technology becoming standard worldwide, contactless payments will continue to dominate, replacing traditional methods in developed and developing regions.
- End-of-life recycling: As more companies adopt eco-friendly strategies, there will be greater emphasis on recycling old cards and minimizing environmental impact.
As more banks and payment providers embrace eco-friendly materials and tap-to-pay technologies, consumers worldwide will benefit from a more efficient and sustainable payment experience. With ongoing innovations in materials and payment methods, the card payments market will continue to grow, providing secure and reliable solutions for the digital economy.