Demand for banknotes, personal ID, stamps, payment cards, cheques, and brand protection packaging will continue to grow over the next five years, even as the sector adjusts to a commercial landscape reshaped by the experience of the Covid pandemic.
A dedicated new expert study of the sector from Smithers – The Future of Global Security Printing to 2026 shows total value will increase to $28.89 billion in 2021, up from $28.47 billion in 2020. This positive performance over the worst of the pandemic period was led by increased sales for banknotes, payment cards and brand protection packaging features. Although other segments have seen major falls.
Smithers’ analysis tracks the influence of multiple market drivers that will contribute to pushing total sales in the industry to $35.02 billion in 2026, equivalent to a 3.2% compound annual growth rate.
As the market reorientates to new commercial realities it will create a varied and dynamic situation, which will reward innovation. Smithers’ analysis forecasts the following major changes:
Banknotes, have seen a surge in demand over the pandemic period, this has deflected the broader trend for wider use of electronic payments in the short term. Growth demand will slow over the five-year Smithers forecast period, and central banks and security printers will refocus on alternative payment options, with new contracts largely confined to developing markets
- The need for contactless payment and ongoing efforts to integrate the world’s large unbanked population into the modern economy will make payment cards one of the fastest expanding market segments over the same period
- Personal ID sales stalled in 2020, but the imperative to develop integrated electronic IDs to manage Covid-19 and wider use of biometrics will support a return of sales as international travel restrictions are relaxed
- One segment that has a continuing negative outlook is ticketing. Drops in sales across 2020-2021 will not be recovered. Reduced commuting, more homeworking and the implementation of touchless travel systems, will all lead to further declines in the future
- A similar negative outlook is forecast for cheques. Already restricted to a few key national markets – US, India, France – investment in remote or automated payments has damaged demand, and further declines are forecast to 2026 as consumers and organisations transition to more modern alternatives
- A more positive outlook is given for brand protection packaging. The twin drivers of greater e-commerce trade and the implementation of traceability mandates will make this the fastest growing segment over the next five years, creating a major diversification opportunities for established security technology suppliers
- While mail volumes will continue to decline, new measures to control counterfeiting of goods like cigarettes will see demand for stamp printing increase – with the market refocussed on tax stamps.
This varied outlook – and the need to develop new digital service lines – is driving a reorganisation of many private-sector organisations. It will also be reflected in the outlook for different security components.
Security substrates and print processes will continue to be the two largest components of the market, representing 50.1% by value in 2021. Across 2021-2026 the need for greater supply chain scrutiny and both overt and covert verification technologies will manifest in greater demand for RFID and coding, security inks and taggants. Simultaneously the interest in automated borders, and secure physical and online identity will push a wider use of biometric solutions.