Voice of the Industry

Sustainability in payments- Looking to the future

Friday 6 May 2022 09:30 CET | Editor: Irina Ionescu | Voice of the industry

Adrian Hawliczek, Product Manager at Netcetera, talks about sustainability in the era of ecommerce, and what can companies do to protect the environment and become more conscious
In February 2022, the European Commission presented its Taxonomy Complementary Climate Delegated Act. Although controversially debated to declare nuclear plants as sustainable projects, it clearly shows the urgent need to take measures now to save the environment for future generations.

Let’s take a closer look on the environmental impact of traditional payment activities and compare it to mobile-based solutions available on the payment market. For that, a classic cash-based Point of Sale (POS) transaction – taking the purchase amount in cash out of the wallet to pay the goods and getting a paper receipt in return – is compared to a POS transaction using a mobile device.

The environmental costs of physical payment


All methods of payment have some environmental cost associated with them. Producing cash notes and minting coins, for example, require water, electricity, and fuel. Material inputs – like cotton, foil, ink – and transportation, mainly drive production whereas distance to retrieve and deposit cash, the frequency of retrievals and deposits, and ATM costs drive operational costs in the lifecycle of a currency.

Though global cash transactions may be in decline, the US and the EU each printed more than five billion new cash notes in 2020 alone. According to a study conducted by De Nederlandsche Bank (DNB), cash payments have a higher impact on the environment and climate change than debit card payments.

Plastic payment cards

Most payment cards are made from synthetic plastic (PVC), which is not biodegradable. According to the Nilson Report released in October 2020, 22.8 billion credit, debit, and prepaid cards were in circulation in 2019, with a projected grow to 30.6 billion cards until 2025. Although some card issuers are searching for more sustainable solutions – e.g. Tomorrow’s wooden card or recycled plastic (rPVC) payment cards – considering the growing market acceptance and coverage of mobile based solution herald the end of physical cards.

Paper receipts

According to Climate Action, every year in the US, paper receipts consume over 3 million trees, 9 billion gallons of water, and generate over 4 billion pounds of CO2 – the equivalent of 450,000 cars on the road – and 302 million pounds of solid waste during production.

Additionally, in a survey conducted by Green America, most respondents estimated that they throw away or lose over half of the paper receipts they receive, and almost half of the interviewed persons felt guilty throwing away paper receipts and contributing to overall waste.

Developments in digital payments

Virtual cards

A virtual card has the same characteristics as a physical card – like a 16-digit number or an activation process to make the card ready for use – but arrives immediately, by electronic means. Card issuers not only save the costs of producing plastic cards, but also postal charges for sending them through the mail. According to a US study by Pitney Bowes, the distribution of letter mail generates, on average, about 20 grams of CO2 per letter delivered.

Digital receipts

As retailers in several countries are obliged by law to hand out a receipt to customers for every transaction, digital receipt solutions are evolving. Ethoca’s Digital Receipts service, for example, enables businesses to make receipts digitally available to their customers through card issuing banks. Consumers can access these digital receipts directly through their bank’s mobile app.

Having transaction data digitally available offers even more possibilities. For instance, Åland Index Solutions enables payment providers to calculate the environmental impact, like carbon footprint, of every card transaction. Such solutions can be complemented with carbon limits and tracking and measuring of daily climate impact to raise impact awareness, help carbon reduction, and initiate behavioural change.

Mobile wallets

Today’s smartphones offer all functions from securely storing payment and loyalty cards to contactless payment in-store. A mobile wallet saves resources as it leverages existing infrastructure like mobile phones, which compared to physical payment cards or cash notes, serve numerous other use cases too. Combined with virtual cards, a mobile wallet is ready for payment online and on premises within minutes, without any shipping. Cardholders can make their first transaction not only faster but can also track their monetary and environmental expenses.

The aforementioned points make it quite clear that the payment landscape is changing. Although physical payments or card-present were the default methods that consumers were used to in the past, there has been a definitive shift towards digital payment in the last few years, accelerated by a huge jump in ecommerce, preferences shaped by the COVID-19 pandemic, and an emerging generation of ecologically minded consumers. New digital options are convenient, traceable, and have a lower environmental impact. Tomorrow’s payment methods must consider environmental impacts as well as the needs of customers.


About Adrian Hawliczek

Adrian Hawliczek is a Product Manager at Netcetera, responsible for the ToPay Mobile Wallet platform. He studied Banking and Financial Management in Vienna and has several years of professional experience in the banking industry. His expertise is in payment services and how these evolve in future. He is particularly interested in new means of payments and how they influence society, economy, and environment.


About Netcetera

Netcetera is a global software company providing individual digital solutions in the areas of secure digital payment, financial technologies, media, transport, healthcare, and insurance. More than 2,000 banks and issuers, and 150,000 merchants rely on their digital payment solutions. They also offer modern solutions to online payment, including a white-label mobile wallet solution, the ToPay Mobile Wallet. Learn more about it here.

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Keywords: sustainability , green finance, mobile payments, e-wallet, digital wallet, digital payments, virtual card, Virtual IBAN
Categories: Payments & Commerce
Companies: Netcetera
Countries: Europe, United States, Western Europe
This article is part of category

Payments & Commerce


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