How to mitigate the environmental cost of payment cards?

Edgar, Dunn & Company (EDC) estimated there were 26 billion plastic payment cards in circulation as of end of 2022. While being a popular payment method, they have an impact on the environment.

A single plastic card, usually predominantly made of PVC, only weighs about 5 grams, but 26 billion of them totals to 130,000 tons of plastic in circulation, 10 times the weight of the Eiffel Tower. Moreover, payment cards are made of toxic materials which are hard to recycle, and harmful when incinerated or left to decompose in landfill.

While the physical card takes hundreds of years to decompose, they are usually only valid for use for 3-5 years. What environmental repercussions arise from the large-scale production of ephemeral items, and how can the industry mitigate this impact on the environment?

Beside the environmental cost of their production, payment cards are made of various materials sharing one characteristic: harmfulness to the environment, wildlife and human health

Proper production practices can minimize chemical contamination during the manufacturing process, but it still significantly impacts environmental ecosystems, especially following disposal. This leads to contamination of air, soil, groundwater, and wildlife. The contamination of the environmental ecosystems is accumulated along the food chain, provoking various health issues for humans and animals, such as cancer, liver damage, neurological problems, and developmental/reproductive issues through direct or indirect exposure.

The production of payment cards accounts for Greenhouse gas (GHG) emissions

The manufacture of a single payment card represents on average 150 grams of CO₂ equivalent of Greenhouse gas (GHG) emissions.

According to EDC calculations, in 2022, the production of payment cards accounted for over 1 million tons of GHG, and the processing of transactions for 3.3 million tons. This totals to 4.3 million tons of GHG emissions a third of Togo’s yearly emissions in 2022.

But card manufacturers are developing innovative solutions to limit the harmfulness of payment cards

There are numerous solutions that aim to curb the environmental impact of payment cards, including by substituting virgin petroleum-based materials with alternative plastics, such as:

- r-PVC (recycled PVC)

- PLA derived from renewable and biodegradable sources, such as corn starch

- PETG and r-PETG nontoxic substances, enabling full circularity

- r-PET sourced from ocean plastic waste

Non-plastic materials have also been engineered to be used to manufacture payment cards, such as:

- Stainless steel and recycled stainless steel

- Wood

- Coffee grounds

- Paper

Other innovations have been developed including sustainable ink and optimised production processes using less and/or cleaner energy.

Beyond manufacturing, the industry is actively trying to address sustainability as a comprehensive challenge

Payment cards must not only be recyclable, but actively recycled. Due to their diverse components, they are challenging to recycle, particularly at home. Some issuers are trying to address this by placing machines in brick-and-mortar bank branches to transform expired cards into reusable pellets, such as HSBC and Santander which have developed pilot programs in the UK.

Moreover, while traditional cards often fund unsustainable activities, such as fossil fuels, the offer for cards supporting sustainable investments is rising. Opting for a card made of coffee grounds might have limited impact if the issuing institution predominantly invests in fossil fuels. While such initiatives are immediately visible, they may conceal issues that warrant attention. Several financial institutions have developed environmentally conscious financial products, and it is now possible for consumers to choose a card linked to more responsible investments. As an example, Atmos Debit is certified B-Corporation and free of fossil fuels investments, and Visa offers different sustainable credit programs such as Redwood Credit Union Visa, Sunrise Banks Visa Platinum and Green America Rewards Platinum Visa.

Finally, the most sustainable practice is producing less. Many payment cards remain functional post-expiry. While navigating the embedded security features, extending their lifespan may emerge as the most efficient measure to reduce their environmental impact. The use of digital wallets may also be a solution as it eliminates the use of physical cards.

EDC recommends the EDC Environmental Card Issuing Framework

The EDC Environmental Card Framework is a set of guidelines designed to limit the environmental impact of payment cards throughout their life cycle, from manufacturing to recycling.

As a summary, payment cards contribute to GHG emissions and chemical contamination throughout their lifecycle, and the industry is gradually deploying initiatives to tackle the challenge. Implementing the EDC framework will contribute to further improve payment cards’ environmental performance. EDC can support card issuers and issuer processors through the selection of partners that comply with the EDC Environmental Card Issuing Framework and create a payment account issuing strategy that is less heavily reliant on cards.

The content of this article does not reflect the official opinion of Edgar, Dunn & Company. The information and views expressed in this publication belong solely to the author(s).