The global smart card market is entering a much quieter phase, but not a less important one.

According to ABI Research, global smart card shipments reached 8.32 billion in 2025 and are expected to rise only modestly to 8.46 billion by 2030. On paper, that looks like a flat market. In reality, it tells a bigger story about where secure identity, payments and mobile connectivity are heading next.

For years, the smart card industry was built around replacement cycles. New SIM card. New bank card. New government ID. New batch, new shipment, new volume. That model is now being squeezed from several directions at once: eSIM is reducing the need for removable SIM cards, banks are extending card expiry periods, and governments are slowly blending physical credentials with digital identity systems.

“The smart card market is no longer defined by broad-based expansion, but by how effectively vendors adapt to structural change,” said Phil Sealy, Research Director at ABI Research. “The transition from removable SIM to eSIM, the extension of payment card expiry periods, is expected to reduce traditional replacement volumes, forcing suppliers to rethink where future value will come from.”

That is the key point. This is not the end of smart cards. It is the end of easy volume growth.

SIM Cards Face the eSIM Reality

The SIM segment is where the shift feels most visible. ABI Research says SIM card shipments reached 4.08 billion in 2025, while eSIM device shipments accounted for 523.6 million, or 12.8% of total shipments. By 2030, eSIM device shipments are expected to rise to just under 1.1 billion, reaching nearly 27% penetration.

For the travel connectivity market, this is not surprising. The consumer behaviour has already changed. Travellers increasingly expect to download connectivity before landing, switch between providers, compare data plans online and avoid roaming shock. That has created a very different value chain from the old physical SIM model.

For traditional SIM suppliers, the issue is not that SIM technology disappears overnight. It will not. Many prepaid markets, IoT deployments and lower-cost devices will continue to use removable SIMs for years. But the growth story is moving elsewhere. It is moving into eSIM enablement, remote provisioning, device onboarding, secure embedded chips and platform services.

This is also where operators, travel eSIM providers and technology platforms are changing expectations. Companies like Airalo, Holafly, Nomad eSIM, Ubigi, Yesim and GigSky have shown consumers that mobile connectivity can behave more like a digital travel product than a telecom store transaction. That pressure eventually travels back through the whole supply chain.

Payment Cards Are Maturing Too

ABI Research also found that EMV payment card shipments fell to 2.94 billion in 2025, down 3.5% year over year. This does not mean cards are becoming irrelevant. It means the replacement engine is slowing.

Banks and issuers are extending expiry periods, managing inventories more carefully and pushing more activity into digital wallets. At the same time, physical cards remain deeply embedded in payments. EMVCo’s latest deployment figures show that EMV chip cards still dominate global card infrastructure, even as contactless, mobile wallets and Tap to Mobile acceptance continue to expand.

The smart point for vendors is this: payment cards are no longer just plastic rectangles shipped in bulk. The higher-value opportunities sit in premium cards, biometric cards, sustainable materials, tokenization, mobile wallet provisioning and secure payment credentials across multiple devices.

That is a harder market, but potentially a better one for companies that can move up the value chain.

Government ID Is Still Growing

One bright spot is government ID. ABI Research says government ID smart card shipments climbed to nearly 650 million units in 2025, up 5% year over year.

This makes sense. Governments are still investing in secure identity documents, national ID cards, residence permits, driver credentials and public service access. But here too, the future is hybrid. Physical cards are increasingly being connected to digital wallets, mobile credentials and online verification systems.

Europe is a good example. With eIDAS 2.0 and the European Digital Identity Wallet framework, identity is becoming both physical and digital. That does not remove the need for secure chips. It changes where those chips sit and how they are used.

For citizens, the best systems will be simple. For governments, the challenge is security, inclusion and interoperability. Not everyone wants, owns or trusts a smartphone-based identity wallet, so physical credentials will remain important. But vendors that only think in terms of card issuance will miss the larger identity architecture forming around them.

Secure ICs Move Into the Embedded Era

ABI Research also points to a major shift in the secure IC market. Embedded secure ICs are gaining share, while traditional smart card IC demand remains pressured by inventory correction. In the first half of 2025, NXP, STMicroelectronics, Infineon and Samsung held a combined 74% secure IC revenue market share across traditional smart card ICs and embedded variants.

That concentration matters. It shows that leadership is increasingly tied to scale, engineering depth and the ability to serve both old and new security models.

“Vendors that succeed over the next five years will be those that can navigate low single digit shipment growth with disciplined market selection and stronger value-added positioning,” Sealy said. “That means aligning with eSIM enablement, hybrid physical-digital ID programs, embedded security demand, and niche higher-ASP opportunities rather than competing purely on commodity card volumes.”

In plain English: chasing volume alone is a weak strategy now. esim card vs sim card

The Real Signal for eSIM card vs SIM card

The smart card market is not collapsing. It is becoming more selective, more digital and more embedded.

Compared with the broader eSIM market, where GSMA Intelligence expects eSIM smartphone adoption to accelerate sharply by 2030, traditional SIM cards now look like a mature infrastructure layer rather than the future growth engine. Compared with payments, where EMV cards remain massive but digital wallets are reshaping issuance behaviour, the card industry is facing the same question everywhere: what happens when security still matters, but the physical form factor matters less?

The companies best placed for this transition are not necessarily the ones shipping the most plastic. They are the ones building around secure provisioning, embedded chips, digital identity, enterprise IoT, payment credentials and trusted device ecosystems.

For low-cost commodity card suppliers, this market may become less forgiving. For vendors with strong IC partnerships, software capability and sector focus, it may become more interesting than ever.