Although credit and debit cards are convenient, many consumers are not aware of the negative environmental effects of card use - or how to mitigate these effects. Payment platforms must play a key role in reducing their own environmental impact whilst developing products that are both people and planet-friendly. By doing so, we can work together to help create a more sustainable and equitable future.

But why can cards be harmful to the environment – both in terms of climate change, nature and communities? About six billion payment cards are produced annually and are often disposed of within five years Although efforts are being made to improve the materials used in cards, many are made from polyvinyl chloride (PVC). Plastics like PVC are made from fossil fuels – causing 100,000s tonnes of Co2 in production. When improperly disposed of, plastics can take hundreds of years to decompose and can enter the waterways and oceans – often in the form of microplastics – causing harm to wildlife. In fact, some studies conclude that the average human consumes about five grams of microplastics a week as a result of microplastic pollution - roughly the weight of a credit card.

Of course, what is being purchased by the consumer has a much larger bearing on the environmental impact of the process – but, when we think about the quantity of payments that are processed, small improvements can make a big difference.

What do consumers want from their payment platforms?

As the effects of climate change grow and the loss of biodiversity increases, businesses and consumers are becoming more conscious of their own impact and are actively seeking ways to reduce it. They’re also seeking out companies and brands that are taking action to tackle climate change and protect nature. This includes working with companies that have implemented sustainability strategies who are taking action.

A 2022 YouGov study entitled Payments, Plastics, People and the Planet indicated the trend of conscious consumerism is expected to continue. The study found that nearly 68% of people are actively seeking ways to reduce their environmental impact. Some of the measures consumers consider include changing their diet (29%) and giving up air travel (19%). Over half of consumers (56%) are open to switching from their current preferred payment method to a more environmentally-friendly option and one in six (18%) consumers would be willing to give up using plastic cards as a payment method.

The data shows Australians are increasingly seeking out ways to reduce their impact on the environment, creating opportunities for businesses to develop and promote more sustainable platforms and processes.

What are we doing at GoCardless?

We are dedicated to minimising our impact on the world around us, whilst seeking opportunities to creating positive change. In 2021, we co-founded the Tech Zero coalition and became signatories of Business Ambition For 1.5°, aligning our climate action with the Science Based Target initiative Net-Zero Standard. In 2022, our Science Based Targets were validated by the SBTi. Our most recent Climate Impact Report provides public data on all of our operations across the business, including energy consumption, travel, and purchased goods and services. We have already surpassed our Scope 1 and 2 Target, whilst supporting projects that help tackle climate change, protect nature and support communities – from planting our GC Woodland and restoring kelp forests, to training teachers to deliver Climate Tech Courses in Schools.

In addition, our core business model and focus on account-to-account (A2A) payments reduces the energy required for a payment. A card payment goes through eight steps, an A2A payments only has two – using four times less energy in comparison. A2A payments in Australia are commonly conducted via Direct Debit – and they'll likely rise in popularity as the New Payment Platform's ‘PayTo’ capability becomes an industry-wide standard. Choosing A2A payments (when possible) makes a difference.

What are banks, lenders and other fintechs doing?

Digital lending and payments provider, WLTH is another leader in the space on a mission to refresh the financial services industry in Australia. Focusing on technology and sustainability, in late 2022, WLTH joined forces with Parley for the Oceans and released a WLTH Parley Ocean Card made of 80% Parley Ocean Plastic® collected from various coastlines and communities across the world. WLTH also cleans up 50m² of beach and coastline for each loan they settle.

Cogo is another example, as they provide tools for carbon footprint management to individuals, banks and financial institutions, reducing the industry’s impact on the climate. Cogo maps ‘spend-based carbon data’ to financial data provided by banks, facilitating realtime tracking of customer carbon footprints. With near-instant, highly accurate information, it is easy to accurately gauge a business’ overall environmental impact and measure positive change over time accordingly.

Sustainable businesses need like-minded payment platforms in order to flourish

But it’s not just consumers demanding more from financial institutions. Sustainable Salons, a social enterprise operating in Australia and New Zealand, collects waste from various establishments such as salons, barbers and pet groomers and recycles it into socially and environmentally responsible products. With over 75% of its members using direct debt as their payment platform, they’ve been able to save 20 hours per week on data entry and administration by integrating with GoCardless, allowing them to scale while minimising cash flow disruptions.

Before making the switch Sustainable Salons faced difficulties with big banks, causing friction in payment collections. Partner integrations between GoCardless, Asperato, and Salesforce has reduced the time taken to set up new clients from one hour to just a few minutes, giving them time back to focus on high impact work, such as cleaning up oil spills with hair, instead of admin. 

Businesses like Sustainable Salons look to eco-conscious partners to ensure they remain committed to their sustainable goals. Although payment methods like credit cards do offer convenience, they have an undeniable impact on both the environment and your finances – the good news is that we live in an era with the power to make the change.

Payments no longer need to cost us the earth.