Abstract
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 Telecoms mobile banking and mobile payment services." | 
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