6 ways payment cards are getting greener

October 24, 2022 11:58 AM

Amid rising concern about the environment and climate change, more payment card issuers and manufacturers are adopting greener approaches to cards, and their approaches are taking many forms.

The cleanest option might be eliminating cards altogether, as digital versions of cards are rising in popularity. But physical cards have become an important branding touchpoint connecting consumers to financial institutions, even as many reduce their branch footprints.

Eco-friendly payment cards have been an area of experimentation for years. One setback was the advent of EMV, requiring materials sturdy enough to support an embedded chip and antenna while surviving insertion into payment terminal slots for the average five-year life of a payment card.

The recent global adoption of contactless payments during the pandemic is part of what's driving a wave of initiatives to develop more robust environmentally friendly options that use everything from ocean trash to compostable vegetable compounds.

Although environmental purists claim that even recycled-plastic cards release microparticles during the manufacturing process and end up in landfills, here are six ways payment cards are becoming greener.

One of the Europe's first compostable credit cards rolled out from HypoVereinsbank of Munich, Germany.

Card manufacturer aims to eliminate virgin plastic by 2030

Giesecke + Devrient, one of the top three global card manufacturers, this month pledged to make 100% of its annual output of 500 million payment cards without using virgin plastic, no later than 2030.

The payment card industry currently relies heavily on PVC plastic for the 6 billion payment cards in circulation globally. About 40 million tons of PVC are produced each year for a wide range of purposes, from pipes to footwear. Americans tend to carry about twice as many cards as Europeans and many Asians, according to G&D, which is based in Germany.

Each PVC payment card creates on average 160-170 grams of CO2-equivalent emissions, the company said. It estimates that switching to a recycled-plastic equivalent material, it can reduce those emissions by 75% per card.

One type of G+D's recycled cards uses ocean plastic, in collaboration with New York-based nonprofit Parley for the Oceans, which gathers discarded plastic in waters and works with corporations to recycle it.

G+D is also making compostable cards, which so far have included cards made from biodegradable materials including vegetables. The company recently produced compostable credit cards made of corn starch for the Munich, Germany-based HypoVereinsbank, part of Unicredit Group.

"We're working on identifying new biodegradable plastics that can be dissolved back into the environment," said Ashwini Pandey, G+D's director of product management.

Discarded noncompostable payment cards can be recycled back to the original polymer by using a chemical recycling process which is in its early stages of development.

PLA (polyactic acid) is a thermoplastic polyester — typically found in yogurt cups and medical applications — that can be used to develop compostable cards.

"We're constantly innovating solutions to offer more to our customers — we'll get there," Pandey said.

New Hampshire bank rolls out biodegradable debit cards

The Bank of New Hampshire this year became one of the first financial institutions in the U.S. to offer biodegradable debit cards made of corn starch.

The debit cards are made from nonedible corn, which the Laconia, New Hampshire, bank said can biodegrade within six months under ideal conditions. It would take an estimated 400 years for traditional plastic payment cards to decay, the bank said.

In August the bank began producing all of its new and replacement Mastercard-branded debit cards with eco-friendly versions equipped with EMV and contactless technology. The $2 billion-asset Bank of New Hampshire, which has 21 offices, plans to gradually convert its entire debit card portfolio to eco-friendly cards using technology from Thales.

"Plastic waste is having a devastating impact on our environment," said Eric Carter, senior vice president of digital solutions and innovation officer.

BofA commits to making all credit, debit cards from recycled plastic

Bank of America in April became the first U.S. bank to commit to making all of its plastic credit and debit cards from at least 80% recycled plastic, beginning next year.

A consumer study Escalent conducted on behalf of BofA found that more than 70% of the bank's customers — including small-business clients — were favorable toward environmental sustainability and using a recycled card.

BofA, which issues 54 million consumer and commercial cards annually, estimates the initiative will reduce more than 235 tons of single-use plastics and cut down on the company's greenhouse gas emissions, energy and water use.

Two years ago, BofA also began offering customers digital debit cards to further reduce customers' reliance on plastic. And last year, BofA set a goal of achieving net-zero carbon emissions by 2050 across all of its operations.

Users of REI's recycled card earn rewards for green-action donations

When REI Co-op decided to refresh its cobranded Mastercard credit card this year, it went with a new issuer — Capital One, which replaced U.S. Bank — and a more environmentally friendly approach.

REI converted its entire credit card portfolio in August 2022 to cards made out of 85% recycled materials, underscoring the retailer's commitment to sustainability.

The move builds on REI's years-long commitment to reducing waste across its operations with a "reduce, reuse, recycle" framework from the front end to the back end. REI said last year it diverted 83% of operational waste from landfills.

Users of REI's card will receive 5% back in rewards for donations they make to the REI Cooperative Action Fund, a nonprofit supporting justice, equity and belonging in the outdoors.

Delta's elite Amex card uses metal from a retired 747 jet

For a limited time last summer, American Express and Delta Air Lines gave customers a chance to apply for the first-ever credit card created out of repurposed airplane metal.

New customers who qualified for the $550-a-year Delta SkyMiles Reserve Amex card through Aug. 3, 2022, could receive the limited-edition card made from 25% metal sourced from a retired Delta Boeing 747 jet.

In June Delta unveiled the metallic black card — which features an illustration of the jet — at an event held inside another jet that was on display at the Delta Flight Museum in Atlanta.

The special-issue card honored a specific jet that had carried 4 million passengers between 1990 and 2017, traveling 68 million miles. Participating customers also received access to an augmented reality experience covering the history of the Boeing 747, with details on how Amex and Delta collaborated to turn airplane metal into a card design.

Some environmentalist groups believe metal payment cards are easier to recycle after expiration than plastic cards.

Italian bank rolls out recycled credit, debit cards

The Italian challenger bank Chebanca recently announced the rollout of new credit and debit cards made of 75% to 85% recycled plastic recovered from oceans.

The Milan-based bank is one of the first in its region to provide recycled cards through its partnership with the large European fintech Nexi, which provides card-issuing services to 150 Italian banks and recently introduced the recycled-plastic option through two different suppliers.

The move comes after Nexi last month presented investors with its long-term sustainability plan, which aims to reduce Nexi's carbon footprint to net zero by 2040.

Milan-based Nexi Group in June announced its membership in the UN Global Compact, described as the world's largest corporate sustainability initiative, which is working toward achieving sustainable development goals by 2030. Nexi, formed from the mergers of European fintechs including Nets, Nexi and Sia, operates in 25 countries and collaborates with about 65% of European payments providers.