The U.S. Department of State decision, which extended the deadline until October 2006, will have an negative effect on biometric companies, according to a report from analyst firm Gartner.
The Visa Biometric Program requires travellers from 27 countries to carry biometric passports to and from the US. But lack of enthusiasm from member countries for biometrics has lead to delays.
Gartner stated, "the US federal government will set the standards that will drive the entire market...[and biometrics firms] are in a fragile financial condition."
However, biometrics companies disagreed with the report.
"I don't think it will have a big effect because nobody said they would be part of the deal," said Michel Farhi, managing director of AKT UK, a biometrics firm. "I don't think biometrics manufacturers were depending on this happening quickly. It may have affected US suppliers, but others won't be."
In the UK, the distribution of entitlement cards by the Government has also been delayed.
However, Prime Minister Tony Blair is looking to accelerate and extend the project, which could lead to more demand for biometrics firms.