While Challenging, Government Projects Still Set to Account for Significant Growth in the South African Smart Card Market

1 Jun 2006

London, United Kingdom — The South African smart card market is poised to experience a significant growth spurt over the next six years with the introduction of smart cards by the banking and government sectors. Although both processes have been somewhat delayed, they are currently proceeding according to schedule and 2006 is likely to see some noteworthy movement in this regard.

The Europay- MasterCard-Visa (EMV) migration is entering its final phase and should be completed this year, with banks having announced their intention to roll out smart cards to clients in the third quarter of 2006.

“It is expected that a wide distribution of smart cards amongst banking clients will result in higher smart card adoption,” says Frost & Sullivan (http://www.smartcards.frost.com) Research Analyst Lindsey Mc Donald. “It will also result in the introduction of new value-added services utilising smart cards.”

Such positive trends in the banking sector will be reinforced by government initiatives. The South African Government has undertaken a new national identification programme of which smart cards form one facet. A tender for the manufacture of these cards is expected in 2006 with their roll out set for 2007.

However, the most pressing challenge facing market participants in the government sector is the issue of timing. Although the South African Government is currently undertaking the national identification process, the programme has been fraught with many delays. Companies wanting to tender bids to manufacture cards for this project have had to contend with constant delays that, in some instances, have extracted a heavy financial toll on them.

“Market participants wanting to take part in government-driven projects have to ensure that their strategy is suited for this particular type of industry,” explains Ms. Mc Donald. “Companies will have to account for delays, requirements that are specific to the sector and they will be expected to address issues such as Black Economic Empowerment.”

In adopting a strategy specifically suited for the government sector, most companies have formed divisions focused solely on government contracts.

“This level of attention to detail is ideal and should stand companies in good stead when trying to win government contracts,” adds Ms. Mc Donald. “It is important for these businesses to plan for delays that generally tend to occur with government projects.”

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants with an overview of A Strategic Analysis of the South African Smart Card Markets then send an e-mail to Magdalena Oberland- Corporate Communications at magdalena.oberland@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state, and country. We will send you the information via email upon receipt of the above information.

A Strategic Analysis of the South African Smart Card Market is part of the Global Smart Card Growth Partnership Service, which also includes research in the following markets: Contactless Smart Card Applications and Logical and Physical Access Control Markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company’s industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit www.frost.com.

A Strategic Analysis of the South African Smart Card Market
B531-33

Contact:

Magdalena Oberland
Corporate Communications- Europe
P: +44 (0) 20 7915 7876
E: magdalena.oberland@frost.com

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Corporate Communications- Americas
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E: tori.foster@frost.com

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Corporate Communications- Asia Pacific
P: +603 6304 5832
E: djeremiah@frost.com

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E: sjassal@frost.com

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List of keywords in this press release: South Africa, smart cards, South African smart card market, market, Europay- MasterCard-Visa, EMV migration, South African government, national identification programme, banking sector, black economic empowerment

Contact Information

Magdalena Oberland

Corporate Communications – Europe

Frost & Sullivan

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