Just as it announced a
Called the Sustainability Solutions Team, the Visa "green" initiative joins earlier moves by both
Payment companies have an advantage in their environmental data-gathering in that they have a more holistic view of consumer and merchant spending activity, according to Zilvinas Bareisis, head of the retail banking practice at Celent.
"While banks can strike their individual partnerships with various carbon footprint calculators, having one available directly through their card network partner makes it easier to implement," Bareisis said.
The Sustainability Solutions Team will work with existing Visa initiatives that focus on reducing carbon emissions, initially in Europe. Early projects include partnering with merchants and other parties to facilitate digital payments for electric vehicle charging.
The card brand has also formed the Visa Consulting & Analytics Sustainability Advisory Practice. This unit will help clients manage their current sustainability strategy, develop their roadmaps and design business cases for environmentally-focused initiatives. The projects will make use of Visa's payments data and analytics capabilities.
As part of the rollout of the Sustainability Solutions Team, Visa referenced internal research that found 75% of consumers expect corporations to "lead" on environmental change, while 46% stopped buying from brands or companies because of environmental impact issues. And 80% of consumers surveyed said they want to help "preserve" nature, while 42% said they would use a payment card more often if there were sustainability-focused incentives attached.
Visa's environmentally focused products include a carbon footprint calculator that allows consumers to offset carbon use through donations to environmental groups. The card brand also works with issuers to customize green programs for each bank, such as incentive marketing tied to carbon reduction.
As a platform that serves thousands of issuers and processors, and millions of merchants and customers, Visa is in a position to make a positive impact on sustainability, migrating cards to digital virtual equivalents, digitizing statements and focusing on sustainability with their teams and partners, according to Thad Peterson, a strategic advisor for Aite Novarica.
Other payment companies are also using transaction data to contribute to a "net zero" strategy.
The Swedish payment firm and buy now/pay later lender Klarna recently entered a partnership with Clarity AI to give shoppers a view into the impact of their purchases. Companies will get a "brand badge" that corresponds to that company's greenhouse gas emissions compared against other companies in that brand's category. Consumers can also view the business' proportion of energy from renewable sources, climate change policy and how it reports climate information. Klarna, which will initially focus on electronics brands as the Clarity AI project debuts, also released research that found 62% of U.S. shoppers say sustainability is important when shopping for electronics, and 66% buy electronics from firms that use sustainable materials.
"We use our technology and global reach to empower consumers to 'vote with their wallet' for a more sustainable world,'' Sara Davidson, global lead for Give One at Klarna, said in an email.
The card networks' ability to move card production to the cloud, as well as approve mobile devices for payment acceptance versus a single-use terminal, also puts Visa and Mastercard in a strong position to have an impact on increasing sustainability for payments, said Nathan Hilt, payments and fintech solutions leads at Protiviti.
"The increased attention on [environmental, social and corporate governance] and tracking of sustainability programs that can impact bank clients, processors, merchants, fintechs and the larger payments ecosystem has led to the establishment of sustainability programs," Hilt said. "Key players in the payments ecosystem will be able to lead and approve of various 'green' efforts proposed and implemented within the payments industry."
Mastercard's recent environmental moves include opening a sustainability lab in Stockholm to measure how technology such as 5G, quantum computing and AI can be used to address environmental issues. The Stockholm center is also a "lab as a service" which can work with other companies to create new products such as the Carbon Calculator, which is integrated across Mastercard's global network to provide consumers information on the climate impact of their purchases.
"Some of the green solutions require research and industrywide coordination," Bareisis said. "Mastercard, for example, has been investing into researching various different material alternatives to plastic for cards, as well as coordinating approaches to recycling cards that expire."
