Consumer demand driving sustainable payments

Jenn Markey, VP Payments & Identity, Entrust


Sustainability is a buzzword that seems to be at the forefront of all industries. Since The Paris Agreement of COP21 back in 2016, organisations must now report on the sustainability of their actions per government requirements. While this has put pressure on organisations to re-evaluate their business plans to incorporate sustainability as a core business component, it has opened up vast opportunities for organisations to gain a competitive edge, while adhering to government regulations and improving sustainability. The payments industry has proved to be no exception.

From physical cash and card payments to digital payments through mobile phones, all forms of payment have an environmental impact in some way, and financial service providers must, therefore, evaluate their actions.

A growing consumer demand

Firstly, it’s important to recognise that the issue is not that payments are unsustainable. It is more related to consumer awareness and increased government oversight and regulation.

In today’s society, most consumers want to be sustainable and because of this, have a heightened awareness of the consequences of their actions. This means that if businesses don’t have an environmentally friendly payment option, they risk dissuading a large proportion of consumers from using their banking or financial services.

Jenn Markey

This even applies to the ways consumers make payments on a day-to-day basis. After the COVID-19 pandemic, we saw a drastic shift in popularity of contactless and digital payment formats for safety and convenience reasons. This trend continues to grow as consumers see the benefits that digital and contactless payments have on shrinking carbon footprints. Of course, incorporating digital payments can work towards this by reducing plastic waste associated with physical cards, as well as their packaging and production energy. And even more known to the consumer in a high-speed society, digital cards are instant – if you get a new card from a digital-first bank, in most cases, you can add it to your e-wallet and use it straight away. Speed paired with sustainability makes the digital card increasingly popular in today’s society.

A preference for physical cards

While it might seem that digital payment options like Apple Pay and Google Pay dominate in terms of popularity, research suggests that physical cards are still here to stay. In our recent consumer study, The Great Payments Disruption, respondents listed credit/debit cards with chips (50%) as their most preferred payment method, but contactless credit/debit cards (48%) were a close second.

With this in mind, it doesn’t have to be one or the other, as banks and financial institutions can improve their sustainability practices for physical cards whilst still abiding to the growing adoption of digital cards. Adopting sustainable practices will help banks and financial institutions adhere to ISO 14001 requirements, an internationally agreed standard that maps out the requirements for an environmental management system. What’s more, expected regulation and oversight following the Paris Agreement further highlights the need for banks and financial institutions to take action on sustainable practices. Such requirements outline ways for the sector to improve environmental actions by being more efficient with resources to reduce waste. Reducing the number of resources being used for printing cash or physical cards, for example, will not only improve company sustainability, but also lower production costs.

A further benefit for banks and financial institutions lies in the ability to make physical cards more sustainable by improving durability to extend their lifetime and, where possible, explore eco-friendly card substrates. Today, most payment cards are not biodegradable and, therefore, need to be disposed of in a manner that can be wasteful. Card manufacturers are working on more environmentally-friendly materials to reduce their carbon footprint in the future. Producing cards with durable graphics technology extends card life, meaning lower demand for new cards, fewer materials needed in the production of cards and card printers, and of course less waste. Additionally, extending the life of physical cards will help with the ongoing supply issues regarding chip shortages.

A more sustainable banking sector

Over the next few years, we can expect to see a continuation of the post-pandemic trend of cashless and e-commerce transactions. This paints a positive picture for sustainable payments as the ongoing adoption of alternative payments means a reduction in carbon emissions. Most importantly, banks and institutions can already incorporate more sustainable practices, such as printing cards in-house, and only when required, for near-immediate distribution to keep up the pace of instant e-wallets, while switching to more sustainable printing materials and practices.

What’s clear is that contrary to belief, the subject of sustainable payments is not a case of simply switching to digital payments and eliminating the physical card altogether. It’s about increasing the sustainability of physical cards to keep financial accessibility for every consumer in mind. This should be the next stop for banks and financial institutions on their journey to a more sustainable sector – one where we look after all of our consumers’ needs in today’s society.


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