The fastest per-annum increase in smart card issuance is happening in countries that were not major users of the technology in the early 2000s, according to the study. These countries include China and Asian countries like Singapore, South Korea and Taiwan, and the U.S., Canada, Japan and Eastern Europe.

Freedonia believes worldwide demand for smart card products and services will increase by 11 percent per year, reaching $8 billion in 2006 with almost four billion smart cards issued.

The growth is fostered by the replacement of bankcards by chip cards as card issuers try to combat fraud. Magnetic stripe cards are particularly vulnerable to forgery. The wireless phone market also continues to have a significant potential as a consumer of smart cards.