CM Magazine

Payment Cards: Strategies to Optimize Sustainability and Circularity

Payment cards are much more than just the most popular means of payment. Increasingly, issuers are seeking innovative ways for payment cards to be more sustainable. When issuers implement card recycling and sustainable actions, the physical payment card can be used as a tool for daily brand recognition and a symbol or token of change reminding consumers every day to make more environmentally conscious choices. Most importantly, issuers can incorporate the card’s sustainable design story into their marketing efforts and channels to remain top-of-wallet.

The move toward sustainable card materials is progressing in Europe and especially in the Nordic and Baltic countries. There, approximately 75% of payment cards delivered by Tietoevry Banking, the leading provider in this region, are already made of sustainable materials. Tapio Vailahti, head of innovation & development, card personalization at Tietoevry Banking and a member of the International Card Manufacturers Association (ICMA), shares insights on strategies to optimize sustainability and circularity for payment cards.

Environmental Impact of the Payment Cards System

A study conducted by DNB Bank in the Netherlands relates the payment card system’s environmental impact, originating from the following areas:

  • Payment terminals - Terminal hardware is the biggest contributor to environmental impact, being responsible for approximately 75% of the payment system’s total impact.
  • Data centers - Responsible for processing transactions, they contribute to approximately 11% of the total environmental impact.
  • Payment cards – Including card bodies, antennas and smart card chips, they add approximately 15% to the overall environmental impact.

Sustainable Payment Card Materials Options

As a result of a growing global sustainability movement in the card manufacturing industry, the move toward providing more sustainable card options is becoming increasingly essential, especially with customers.

The following are sustainable payment card materials options:

  • Recycled: Includes recycled polyvinyl chloride (rPVC) or polyethylene terephthalate (rPET).
  • Renewable: Polylactic acid (PLA), a biodegradable material typically made of corn starch.
  • Reclaimed: Refers to plastic collected from coastal regions or oceans in developing countries that don’t have a proper infrastructure to collect plastic waste. This not only helps avoid adding more virgin plastic into circulation but also helps reduce sea pollution.

Changing from traditional polyvinyl chloride (PVC) plastic to any of the above-mentioned materials will reduce the card’s CO2eq footprint by 30% to 75%.

Optimizing the Card Lifecycle

Moving toward more eco-conscious card materials is the first major step toward sustainability. Issuers can further minimize their CO2eq footprint throughout the card lifecycle by:

  • Making use of as local manufacturer(s) as possible.
  • Maximizing batch sizes.
  • Using sustainable inks for card design.
  • Improving packaging and logistics in general.

Tietoevry Banking also is seeking environmentally and financially sustainable ways to collect expired cards, which in addition to the plastic also contain gold, copper and aluminum, through:  

  • ATM networks
  • Collection boxes
  • Collection envelopes

To delve deeper into how this works, bank branches could provide a collection box where consumers place expired cards for recycling. Alternatively, or in parallel, banks could jointly invest in developing a network of collection boxes in frequently visited places such as shopping malls. Some challenges include:

  • Cost and CO2eq footprint of collection boxes and logistics.
  • Finding card collector(s) with a relevant network in a target country/region.
  • Sharing costs across engaged parties.

The option of using ATMs as “card collectors” has also been investigated. However, due to the limited size of their card boxes in Nordics, for example, this does not seem feasible.

Another idea is to send a collection envelope to consumers when their expired card is replaced. The consumer would cut the card in half and return it (postage paid) to the bureau. The bureau would shred the card and forward the components to recycling partners. Some challenges with this concept include the additional CO2eq footprint created by the extra envelopes/stickers and mailing.

Formula for Sustainable Recycling

Card collection and recycling are challenging to set up successfully as the processes must be sustainable from a business perspective too. As such, here are considerations for a sustainable recycling formula:

  • The material value of the card body and integrated chip and antenna metals.
  • The cost of the setup of the collection system and related logistics.
  • Further, recycled materials require some processing before they find new life as other products, for example.

The cost from collecting and processing may be larger than the material value of cards collected. Therefore, to make the case sustainable, issuers need to invest money to enable this process.

Why would issuers pay for this?

Well, they can get a return on their related investment by meeting their sustainability and corporate environmental and social responsibility targets. Additionally, issuers can further improve their brand image and recognition, as well as make use of their related good deeds in sustainability. This can be promoted through their marketing and public relations efforts, as modern consumers have an increasing focus on sustainability.