US Hardware OTP Token Authentication Market Size (2024 - 2029)

The United States Hardware OTP Token Authentication Market is experiencing growth driven by increasing investments in the banking and finance sector and a rising number of identity threats. The market's expansion is necessitated by the high incidence of cyberattacks and data breaches, which have highlighted the need for robust authentication solutions. Despite the challenges posed by legacy systems and alternative authentication methods, the demand for hardware OTP tokens is expected to rise as organizations seek to enhance security measures. The focus on passwordless authentication, particularly during and after the pandemic, further underscores the importance of this market in addressing evolving cybersecurity threats.

Market Size of US Hardware OTP Token Authentication Industry

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United States Hardware OTP Token Authentication Market CAGR
Study Period 2019 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period 2019 - 2022
CAGR 6.20 %
Market Concentration High

Major Players

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*Disclaimer: Major Players sorted in no particular order

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US Hardware OTP Token Authentication Market Analysis

The United States Hardware OTP Token Authentication Market is expected to register a CAGR of 6.2 % during the forecast period between 2021 - 2026. The United States is the largest contributor to breach activity with 2,330 breaches reported, with the United Kingdom positioned 2nd, far behind with reported 184 breach reports. The number of breaches, 2,330, in the United States, led to total exposed records of 2,317,065. This led to personal information being compromised. With such a cyberattack, the adoption of hardware OTP token is highly required in the country.

  • Increasing investments from the Banking and Finance Industry drives the market. As of 2018, at least 28 financial services companies out of all companies present in Fortune's Global 500 listing have decided to locate their office headquarters in the United States to take advantage of its creative, competitive, and comprehensive financial services sector. Further, with increasing expansion, the increasing cyberattack is highly expected.
  • Instances such as, in March 2019, a hacker gained access to Capital One credit card applications for consumers and small businesses. Capital One detected the breach in July. According to the bank, about 140,000 social security numbers and 80,000 linked bank account numbers were exposed in the United States. According to Duo Security, 19% of government agencies use hardware authentication tokens and 5% of the banks. To address such issues and prevent it from the data breach, the demand for hardware OTP token authentication will increase further in the forecasted period.
  • A growing number of identity threats are driving the market. The Consumer Sentinel Network (which is maintained by the Federal Trade Commission (FTC)) tracks consumer fraud activities and identity theft complaints filed with federal, state, and local law enforcement agencies and private organizations. Out of the 3.2 million identity theft and fraud reports received in 2019, 1.7 million were fraud-related, about 900,000 were other consumer complaints, and about 651,000 were identity theft complaints. These instances highly provide a necessity for the adoption of hardware authentication in the country.
  • However, legacy hardware-based two-factor solutions are wretchedly inadequate and expensive for the mass scale deployments necessary for many of today's online consumers, employees, and partner-focused applications and web portals. Further, currently, software OTP, SMS, email, biometrics, etc., are available substitutes to hardware OTP tokens, which caters to the challenge for market growth.
  • Further, before COVID-19, cybersecurity was already a major concern for governments, businesses, and individuals. Now, the threat of a major data breach is greater than ever during the pandemic. Passwords are one of the most vulnerable targets of attacks. Compromised credentials are responsible for over 80% of all breaches, according to the 2019 Verizon Breach Investigations Report. The government is more focused on passwordless authentication during the pandemic and after the pandemic. This significantly challenges the market growth in pandemic and after the pandemic.

US Hardware OTP Token Authentication Industry Segmentation

Hardware OTP tokens are often used as a part of two-factor and multifactor authentication. The use of one-time password tokens strengthens a traditional ID and password system by adding another, unique credential. A hardware OTP token will generate a PIN synchronously or asynchronously. Synchronous tokens utilize a secret key and time to create a one-time password, while asynchronous tokens use a challenge-response authentication mechanism. The market study comprises of Types such as Connected, Disconnected, Contactless, providing solutions to the end-user industry such as BFSI, Government, Enterprise Security, etc.

Type
Connected
Disconnected
Contactless
End User Industry
BFSI
Government
Enterprise Security
Healthcare
Other End User Industries
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US Hardware OTP Token Authentication Market Size Summary

The United States hardware OTP token authentication market is experiencing growth driven by the increasing need for enhanced security measures in response to the rising number of cyberattacks and data breaches. The banking, financial services, and insurance (BFSI) sector is a significant contributor to this market, as regulatory mandates require the implementation of multi-factor authentication to protect sensitive data. Despite the growing adoption of mobile and software-based authentication solutions, hardware OTP tokens remain crucial for securing transactions and access to critical systems. The market is also influenced by the need for robust security in cloud environments and the integration of third-party services, which pose additional security challenges.

The market landscape is characterized by a few key players who hold a significant share and are focused on expanding their customer base across various sectors. Companies like Entrust Datacard Corporation and Thales Group are prominent in this space, offering advanced authentication solutions. Recent developments include partnerships and product launches aimed at enhancing security offerings, such as the collaboration between RSA and Yubico to provide enterprise-grade FIDO authentication solutions. The market is also witnessing innovations like hybrid solutions that combine contactless and connected experiences, catering to the evolving security needs of organizations. Despite challenges posed by the availability of alternative authentication methods, the demand for hardware OTP tokens is expected to remain strong, driven by the ongoing need for secure and reliable authentication solutions.

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US Hardware OTP Token Authentication Market Size - Table of Contents

  1. 1. MARKET DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.2.1 Bargaining Power of Suppliers

      2. 1.2.2 Bargaining Power of Buyers/Consumers

      3. 1.2.3 Threat of New Entrants

      4. 1.2.4 Threat of Substitutes

      5. 1.2.5 Intensity of Competitive Rivalry

    3. 1.3 Regional Market Lifecycle Analysis (United States vs Rest of the World)

    4. 1.4 Regulatory Policy Analysis

    5. 1.5 Market Drivers

      1. 1.5.1 Growing Number of Internet-based Transactions

      2. 1.5.2 Increasing Investments from Banking and Finance Industry

    6. 1.6 Market Restraints

      1. 1.6.1 Growing Use and Reliability of Bio-metric Authentication

    7. 1.7 Assessment of COVID-19 impact on the industry

  2. 2. MARKET SEGMENTATION

    1. 2.1 Type

      1. 2.1.1 Connected

      2. 2.1.2 Disconnected

      3. 2.1.3 Contactless

    2. 2.2 End User Industry

      1. 2.2.1 BFSI

      2. 2.2.2 Government

      3. 2.2.3 Enterprise Security

      4. 2.2.4 Healthcare

      5. 2.2.5 Other End User Industries

US Hardware OTP Token Authentication Market Size FAQs

The US Hardware OTP Token Authentication Market is projected to register a CAGR of 6.20% during the forecast period (2024-2029)

Entrust Datacard Corporation​, Thales Group (Gemalto NV)​, One Identity LLC​, RSA Security LLC​ and SurepassID Corporation are the major companies operating in the US Hardware OTP Token Authentication Market.

United States Hardware OTP Token Authentication Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)