Smart card

Smart Cards: The Smart Play in Transportation

Aug. 12, 2021
With governments focusing on the safety and well-being of their people before and during the COVID-19 pandemic, smart-card technology has emerged as a smarter, more reliable and hassle-free public transportation solution.

What You’ll Learn: 

  • What is the current state of the smart-card industry?
  • How has COVID-19 augmented smart-card use in healthcare?
  • How is smart-card technology ensuring safe commute amid the COVID-19 pandemic?
  • What are the key challenges for the smart-card market in the near future?

Smart-card technology has been around for well over a couple of decades now. From enabling robust mobile communications to providing smart access control, its application has grown exponentially. In particular, the need for security of applications that employ critical information, credentials and documents has increased demand for these cards, which enhance security through encryption.

The deployment of different types of smart-card-based products, including contact-based, contactless, dual interface and hybrid cards, across numerous industry verticals, is on the rise amid the rapidly shifting landscape in wake of the COVID-19 pandemic. However, though the use of smart cards has expanded dramatically due to the widespread adoption of work-from-home practices and restrictions on travel, it’s the healthcare sector that has kept the smart-card industry on its feet.

With the increased pressure on healthcare institutions amid the pandemic, smart-card technology is assisting frontline workers by providing means of efficient and reliable patient care. These cards not only ensure security against healthcare fraud, but also allow secure storage of patient information that healthcare providers can access conveniently.

The transportation sector will likely emerge as a major adopter of smart-card technology in the coming years as people go back to schools and offices. The technology could make it easier for commuters to access public transportation safely and conveniently.

With constant new developments, especially in the transportation sector, the global smart-card market size could expand to $75 billion by 2026, says a recent research report by Global Market Insights Inc.

Smart Cards for Public Transit

Government and transportation authorities are making strategic investments in sustainable and safe public transportation infrastructure. These efforts also include the launch of smart-card-based systems for public transport users across the globe.


In February 2021, transport body Midlands Connect urged the Government to invest $24 million into a new contactless smart travel card that would allow commuters to travel across the whole of the Midlands via bus, rail, and tram.

Midlands Connect believes the technology would help get more people back onto public transportation post-COVID-19 by improving safety and convenience since it’s touch-free. The technology could be rolled out across the Midlands region by 2024 and in the Nottingham and West Midlands as early as next year.

Back in 2019, the government of Scotland rolled out the interoperability project based on the U.K.’s ITSO transit card standard, which allows public transport users to use a smart card to travel on all services provided by a group of different bus, subway and rail operators. Europe held over one-fourth revenue share of the smart-card industry in 2019.

North America

The City and County of Honolulu's Department of Transportation Services (DTS) in April 2021 announced plans to replace old paper passes with new HOLO smart cards for TheBus passengers. The HOLO card is a smart-card service that delivers added convenience for people who frequently ride the bus.

Last year in September, Ontario disclosed plans to invest in a modern public transport infrastructure for the residents of Quinte West. The investment includes broader planning of transit services, purchases of new buses and the installation of smart-card payment technology on around 17 buses. The technology would make it easier for commuters to pay their fares while allowing them to access the Quinte West and Belleville transport systems using the same travel card.

Asia Pacific

Hong Kong-based cashless payment company Octopus Holdings rolled out a new transit card in April that works in over 300 cities in mainland China. The technology allows users to pay for public transit services including buses, rails and ferries in mainland China by the end of 2021 or early 2022.

In December 2020, India’s Delhi Metro Rail Corporation (DMRC) announced plans to roll out the fully operational National Common Mobility Card (NCMC) for metro users as India prepares to run its first-ever completely autonomous metro train.

The NCMC is an indigenously developed interoperable smart transit card that allows users to pay for their rides in the metro, as well as enables them to enter and exit a metro station; withdraw money; and pay for bus services, parking, toll taxes and even retail shopping.

The market for smart cards in Asia Pacific is projected to grow at 10% CAGR up to 2026.

What Does the Future Hold for Smart-Card Tech?

Today, smart cards are everywhere, and the technology is definitely here to stay. However, certain challenges remain that may limit its adoption in some applications. These include concerns regarding privacy and security, as well as standardization issues that manufacturers need to assess and overcome. Cyberattacks on mid-sized to large organizations continue to multiply, let alone the threat to government agencies.

Cardcom, CardLogix, CPI Card Group, Hypercom, Infineon Technologies, Ingenico, NXP Semiconductors NV, Square Inc., and Verifone are among the most prominent names in the smart-card business. These companies along with numerous other developers may find new opportunities in emerging markets, some of which are lagging behind in terms of adoption of newer, smarter technologies.

This article appeared in Electronic Design.

About the Author

Hrishikesh Kadam

A graduate in electronics and telecommunication engineering, Hrishikesh Kadam has always found writing fascinating. Driven by a never-ending passion for content creation combined with a bit of experience in writing personal blogs, Hrishikesh blends his technical knowledge and expertise to pen down articles for numerous online portals.

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