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Sustainable Innovation and Conscious Customers are Changing the Rules in the Payment Industry

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IDEMIA Greenpay
 
By favouring environmentally responsible solutions for the payment chain, banks can do their part to diminish the strain on our planet’s resources and better align with their customers’ expectations simultaneously.

From linear to circular thinking

For many years, the world’s economy has been dominated by a take/make/dispose paradigm, the ‘linear economy’, in which our planet’s resources are perceived as endless. A striking example of this attitude is that only 9% of the 89 billion tons of materials that are extracted from the Earth annually are recirculated. Today, single-use plastics account for 40 per cent of the world’s plastic production. As a result, plastic pollution has become one of the world’s most pressing environmental issues, as the increasing production of disposable plastic products overwhelms our ability to deal with them. Yet plastics remain the workhorse material of the modern economy and ubiquitous in our everyday lives. Despite increasing awareness about this issue, plastic production is expected to triple in the next 30 years, ultimately leading to there being more plastic than fish in our oceans.
In light of this, it is clear that the only way to curb this evolution is to change business models, behaviours and consumption models and that rethinking the future of plastics is one of the 21st century’s main challenges. Changes to plastics and plastic recycling will have a major impact on preserving the environment by saving landfill space, reducing oil consumption, saving energy and reducing emissions.
The urgency of these changes is underlined by the cry for sustainable solutions heard all over the world, from mighty organizations such as the UN down to individual consumers, and spurred by accelerating climate changes. The take/make/dispose linear model is being challenged and slowly but surely replaced by a reduce/recycle/offset way of thinking.

Embracing consumer-driven changes

What’s more, consumers today are driven by their values more than never before. They want products that are compatible with their lifestyles and to engage with organizations that share their values. And they’re often willing to pay a premium for a product that fits their values. A Cone/Porter Noveli study found that 79% of Americans are more loyal to purpose-driven brands whose values they share. Concerning environmental issues, a strategy guide from Nielsen states that 81% of global consumers think it’s extremely important that companies implement programs to improve the environment and that 73% would change their consumption habits to reduce their impact on the environment.

A strong case for greener payment solutions

These changes affect the world of payment solutions as well. A global survey by Dentsu showed that consumers are conscious regarding payments, with a massive 87% expecting their banks to offer eco-friendly cards. Infact, 62% would even consider switching to an eco-conscious bank. Furthermore, as mentioned above, products with an environmental benefit can often justify a higher price tag: the survey showed that 74% of millennials around the world, who are the number one source of income, spending and wealth creation globally since 2015, would accept a monthly additional fee for a “green” card.
Simultaneously, the payment card has arguably become the last remaining physical touchpoint between card issuers and their customers, as visits to bank branches and paper account statements have dramatically decreased or disappeared altogether. In light of this, the Big- and FinTechs have realized what a formidable marketing tool the physical card is (“a marketing and branding moment that replays every time a customer takes out his or her card”), and are leading the way in leveraging the payment card with innovative materials with groundbreaking designs. At the same time, consumers are increasingly seeing their cards as accessories and an extension of themselves. Therefore, given the payment card’s high visibility and prominent position as a carrier of the bank’s identity, an eco-friendly card will elevate the value of the brand in the eyes of environmentally conscious consumers.
Enabling an end-to-end green payment chain to support banks and other card issuers in this transformation, IDEMIA has developed the GREENPAY card range, made out of recycled PVC that passes all the ISO tests to guarantee the same level of quality and durability as first-use PVC. These cards are fully available today, and the next generation, which will use bio-sourced materials to eliminate dependence on fossil fuels, is in preparation. Migrating from first-use to recycled plastic comes with three main benefits: 1 Less natural resources need to be extracted 2 Landfill space is reduced 3 Reducing the carbon footprint of payment cards.
A holistic eco-friendly approach Environmental issues are eminently global and transversal. Beyond the payment card itself, eco-conscious customers have come to expect green initiatives all along the payment value chain. As an illustration, 65% of consumers expect banks to offer digital alternatives to paper documents, and 71% think banks should provide a recycling service for expired payment cards.
The time for change is now Today, going green is no longer optional, for the banking industry like for all other economic sectors. Banks and other card issuers that contribute to the transition from a linear to a circular economy are not only taking their responsibility from an ethical point of view, they are also aligning with the expectations of their customers, who will ultimately decide which brands flourish or wither.
Matthew PhotoMatthew has spent the better part of his 30-year career-defining business & brand positioning strategies and maximizing competitive distinctiveness for leading multinational brands. Matthew has been Global Executive Vice-President Branding & Communications of IDEMIA since its inception in 2017, and is part of the Executive Committee of IDEMIA. On top of this role, he was appointed India Regional President at the beginning of 2021 to amplify IDEMIA’s substantial investment in India. Matthew is based out of Delhi, India. Matthew has a wealth of experience working with multinational companies serving both the Government and enterprise technology sectors. Matthew is passionate about building teams to stimulate growth.

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