According to the latest studies, 85% of consumers have shifted toward choosing greener products over the past five years. This positive trend has seen a reflection across many industries, with the sphere of payments being no exception. As a result, multiple banks have started offering eco-friendly cards, and this innovative solution is gradually taking over the world.
“Green” credit cards have the power to reduce climate change while helping issuers that develop them gain a competitive advantage, making them an extremely promising endeavor from multiple standpoints. Read ahead to find out what exactly eco-friendly payment cards are and how significant their impact is!
Even though the idea of sustainable credit cards might seem to be very new, the truth is that it has been around for over a decade.
Back in 2007, when the United Nations Environment Program Finance Initiative published a Green Financial Products and Services report, only a few eco-friendly payment cards existed in North America, typically offering donations to nonprofits for each purchase made using them.
Meanwhile, in Europe, the GreenCard Visa was focusing on offsetting greenhouse gas (GHG) emissions generated throughout the manufacturing and use of the products and services purchased with it.
Some of the modern versions of sustainable bank cards are a lot more advanced than their early 2000’s predecessors and have a bigger impact on the future of our planet. As of now, there are two main “green” tracks in the eco-friendly payments movement:
1. Raising Awareness & Influencing Consumer Behavior
Asian banks are currently leading the change in “green” cards innovation. Here are a few examples:
As for the US, one of the most prominent local examples of “green” card innovation is Aspiration Bank. It has come up with a program that tracks the impact of spending on the planet to raise consumer awareness. It also gives up to 10% cash back for purchases from socially responsible businesses.
Another worthy mention is Ando in the US, which issues debit cards and plants a tree for each transaction made by cardholders that take part in its “Change That Counts” program.
Actions that are targeted at raising awareness about sustainability issues and influencing consumer behavior, create the most powerful impact. Yet, some banks choose another way to contribute to environmental causes.
2. Reducing Pollution & Donating to Charities
Many banks choose to follow a less innovative model when setting the course for sustainability and decide to donate a small percentage of the spending to charities or use eco-friendly materials when manufacturing the cards.
While these practices are certainly helpful, their impact is not as significant as that of the initiatives presented in the previous category. This is due to the fact that the overall contribution of bank cards to the global plastic waste issue is relatively small and the donations to charities don’t prompt consumer behavior changes.
It’s a renowned fact that Millenials and Gen Z are highly invested in the sustainability topic and other generations are following suit. In fact, 81% of consumers globally believe that companies should take part in “green” initiatives.
With payment cards remaining a large part of people’s lives, it is safe to say that the demand for eco-friendly payment cards will continue rising. Thus, issuing banks that will develop innovative and impactful programs to help tackle environmental issues are sure to gain a competitive advantage while doing good for the planet.