Smart Payment Association warns that supply chain pressures are continuously increasing, having an increasingly significant impact on the payment card industry.

A payment cards and mobile payments industry organization released a statement on Monday stating that the increasingly tense situation in the global supply chain is putting increasing pressure on the availability of payment cards worldwide.

The document indicates that two interwoven forces are reshaping the payment card supply chain: semiconductor wafer factories are increasingly allocating their production capacity preferentially to artificial intelligence applications and data centers, rather than to mature manufacturing processes; at the same time, ongoing geopolitical instability is affecting the supply of key components and materials required for payment cards, including precious metals and PVC.

Payment card chips rely on mature manufacturing processes of 28 nanometers and above. Although artificial intelligence is unlikely to change the technical roadmap for such chips, the surge in demand related to AI is putting increasing pressure on the production capacity required for these chips. Gold and other precious metals used in the manufacture of EMV chips and electrical contacts are also under continuous strain due to geopolitical tensions, and capacity restrictions on trade routes have further exacerbated this situation.

Considering the interdependence of the global supply chain, payment card manufacturers have taken various measures to avoid the chip shortages that occurred after the pandemic. However, as semiconductor wafer factories report increasing capacity constraints, manufacturers are increasingly forced to verify and turn to other sources for producing payment card chips, a process that requires a significant amount of time, resources, and technical investment.

To help mitigate these risks, SPA calls on card-issuing institutions to provide manufacturers with accurate demand forecasts as soon as possible, inform them of expected sales volumes or changes in product portfolios in a timely manner, and to quickly coordinate framework orders and long-term planning. SPA states that this will help manufacturers lock in production capacity and cooperate more effectively with semiconductor suppliers.

SPA indicates that we will continue to monitor market changes and provide the latest information as circumstances evolve.

The complete position paper can be found at www.smartpaymentassociation.com.

Regarding Smart Payment Association ( SPA )

Smart Payment Association ( SPA ) is a professional organization in the card and mobile payment industry. The association promotes innovation, security, and interoperability of payment methods, and represents its members in cooperation with regulatory agencies and standard-setting organizations.