“Contactless smart card technology is able to provide this common platform and can be designed to create a balance between security and commercial application,” notes Frost & Sullivan Industry Analyst Michelle Foong. “The market in Asia Pacific is ready for this convergence in many countries, and some are already in the process of convergence to reap the benefits of multiapplication.”

However, readers and cards used within the mass transit and banking markets may not always be interoperable and based on common protocols. Their back end systems and infrastructure are often not linked, making interoperability a short-term restraint for the market.

“Retailers and merchant outlets need to have a common platform of readers and terminals to accept cards from a variety of issuers, be it from transit agencies or financial institutions,” says Foong. “This has not happened in most cases and it will take some time before all the readers become interoperable.”

In order to ensure convergence between the two industries, various parties such as transit agencies, financial institutions, merchants, and card issuers need to work together to create a healthy, efficient and interoperable ecosystem. The contactless smart card infrastructure should also be developed further for this to materialize.