Chip Shortage Largely Averted in 2022 Contactless Ticketing Market, Declining Only 0.6% - Sharp 27% Market Recovery Anticipated in 2023

Despite the best efforts of ecosystem players across the value chain, the global contactless ticketing market saw a marginal decline in issuance volumes in 2022, with the ticketing memory smart card market faring worse than a microcontroller. Integrated Circuit (IC) vendors switched production priority to higher selling price chipsets, meaning the memory capacity faced a significant shortfall. Global technology intelligence firm ABI Research has determined contactless ticketing smart card shipments decreased from 313.3 million in 2021 to 311.3 million in 2022, with a sharp market recovery anticipated in 2023 to 395.7 million units.  

“Regarding a complete recovery to pre-pandemic levels, ABI Research believes that the global market for ticketing smart card shipments will struggle to recover until at least 2024. Although the chipset shortage is coming to a steady close, solved through the combined effort of increased capacity coming online and market downturns in other chip-competitive markets, COVID-driven trends toward working from home continue to suppress ridership levels. Global ridership levels have averaged out, post-COVID, to a plateau of approximately 80-85% in most regions, which has decreased the globally available market level for recovery. While this will not see a resolution soon, Public Transportation Operators (PTOs) are deploying many strategies to bring their travelers back to utilizing public transit again,” explains Sam Gazeley, Digital Payment Technologies Research Analyst at ABI Research.

One macroeconomic factor playing into the ticketing market's hands is fuel price increases as general inflation rises. Travelers have begun to return to public transport as financial pressures stemming from global inflation and energy costs force many to rethink their usage of personal vehicles. This applies particularly to regular travelers, but tourists and infrequent travelers still heavily utilize the local transit network. This aversion to personal vehicles and returning to public transit has been seen as stronger in regions more sensitive to price variations, such as Latin America. PTOs are capitalizing on this, with government-subsidized ticketing initiatives in Austria, Spain, and Germany seeking to provide low-cost travel schemes in major cities to increase ridership levels.

“However, public transit is not a silver bullet in all regions. Africa and the Middle East are seeing less-affluent travelers that don’t own personal vehicles bearing the brunt of Africa’s current public transport price increases. What is helping to alleviate some of this pressure is the expansion of mobile infrastructure to support the rollout of mobile money solutions. To increase financial inclusion through mobile money, a side effect of this is natural growth in digital transit solutions, now fulfilling the critical task of making transport accessible to those suffering under inflationary pressure,” Gazeley concludes.

These findings are from ABI Research's Contactless Ticketing Smart Card Technologies market data report. This report is part of the company’s Digital Payment Technologies research service, which includes research, data, and analyst insights. Market Data spreadsheets comprise deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight into where opportunities lie.