Frost & Sullivan: Smart Transit Card Users Promote Smart Card Adoption for Multiple Applications

LONDON, August 31, 2010 - The increasing popularity of travelling has encouraged the large
community of travellers to embrace technologies - such as smart card
technology - that will simplify their travel needs. This end-user readiness
has resolved some of the industry's inertia in deploying new services based
on smart card technology. A promising cycle has emerged that will generate
wider network externalities through the application of innovative
practicalities to this community of transit users.

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New analysis from Frost & Sullivan (www.smartcards.frost.com),
World Smart Cards in Transportation Market, anticipates that the transit
application will witness 11 percent Compound Annual Growth Rate (CAGR) in
smart card shipment from 2009 to 2015. This growth will be driven by current
smart card-based transit projects designed to extend the percentage of the
world's population that is currently living in cities running smart
card-based transit projects.

"It is no longer the domain of the traditional smart card value chain as
it interacts with transport authorities," notes Frost & Sullivan Analyst Yiru
Zhong from the Information & Communication Technologies group. "Technology
and social factors now make it essential that transit authorities deploy
smart ticketing solutions as a result of ubiquitous connectivity and mobile
devices."

Europe and megacities are hot spots for future smart card-based transit
projects. The UN report on megacities states that city development requires
transportation planning involving smart card-based transit payment solutions.

"The future of convergence lies in the union of form, function and
connectivity, much like Hong Kong's experience," states Zhong. "Europe
fulfils these three critical factors."

Furthermore, the use of smart cards has matured in Europe, setting the
scene for more collaborative efforts with stakeholders in other industries.
For instance, Europe is at a more advanced stage of NFC trials for m-payment
purposes, including the use of NFC technology for mobile ticketing.

By recognising the gaps, which have been left by disruptive new players
such as telcos or retailers, smart card vendors can better act on an end-
to-end vendor solution. They can fulfill the role of a system integrator,
having understood the complexity of secure transactions, while operating
within the context of the transportation and mobile sector.

"They should also be able to promote greater standardisation, as already
evidenced by the latest transit initiative from InsideContactless," states
Zhong. "Finally, there are numerous opportunities for smart card vendors to
lead in enabling secure and robust payment systems."

Beyond the demand for smart cards and integrated chips, there remains the
untapped demand for services and solutions to bridge the fragmented
eco-system. The emergence of payment for transportation has laid the
groundwork for a wider adoption of smart cards with multi-applications. There
have been several examples of contact and contactless transportation payment
projects embarking in different parts of the world.

"Different payment platforms and methods have allowed different
technology players in industries," explains Zhong. "For instance, there are
players, such as telecoms operators, and established payment infrastructure
plans, as set up by banks which have their own innovative payment methods."

Trends indicate that the number of people holding a transit smart card
will rise. This, together with the increasing sophistication in uses of smart
card, represents a step towards a connected or smart city. "The smart card
industry should exploit opportunities to enable this vision," advises Yiru
Zhong. "Initially, there will be a need to establish credibility in managing
large scale projects combining security, services and solutions."

If you are interested in more information about the study on World Smart
Cards in Transportation Market, please send an e-mail to Joanna Lewandowska,
Corporate Communications, at joanna.lewandowska@frost.com, with your full
name, company name, title and contact details.

World Smart Cards in Transportation Market is a part of the Market
Insights - Smart Cards subscription, which also includes research on: Asia
Pacific Best Practices for Contactless Convergence, Opportunity in Crisis -
The Smart Cards Market in Asia Pacific - 2010 and Beyond, World Banking and
Payment Smart Card Markets, Published: 31 Dec 2009, NFC Environment Scan,
Asia Pacific Chip and PIN Market, World Government and ID Smart Cards Market,
World SIM Smart Cards Market, among others. These Market Insights are part of
Frost & Sullivan Growth Partnership Service.

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                 World Smart Cards in Transportation Market
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    Contact:
    Joanna Lewandowska
    Corporate Communications - Europe
    P: +48-22-390-41-46
    E: joanna.lewandowska@frost.com

    www.frost.com

Joanna Lewandowska of Frost & Sullivan Corporate Communications - Europe, +48-22-390-41-46, joanna.lewandowska at frost.com