As showcased at eco-centric conventions like the recently held COP27 Summit, there’s a sense of urgency for sustainable banking to address concerns about climate change. This has forced financial institutions to increasingly feel the pressure to reduce their Greenhouse Gas (GHG) emissions.
Integral to these sustainable development goals is using renewable payment card materials, with many big banks swapping first-use Polyvinyl Chloride (PVC) with alternative payment card materials that are less harmful to the planet.
Not only is the push for eco-friendly banking the result of Environmental, Social, and Governance (ESG) regulation pressures and encouragement from the United Nations (UN), but it’s also an excellent way for banks to win over the hearts and minds of eco-conscious consumers. As noted in our 2023 technology trends whitepaper, companies of many industries will continue focusing on ESG initiatives to appease customers, partners, employees, investors, and other stakeholders.
A recent survey from the cloud banking platform Mambu revealed that 60% of consumers want every financial institution they interact with to be sustainable. By offering sustainable payment cards, banks solidify their net-zero commitments in a tangible way that bridges the positive emotions from the consumer to the brand. This can create a stronger bond with consumers that want brands to tackle global warming, with a better chance of them becoming long-term customers.
The Limits of Digitized Banking
At first, complete digitization may seem like the answer to greener banking. After all, digitization eliminates the main culprits—reliance on paper, physical documentation, and Carbon Dioxide (CO2)-emitting transportation.
However, the increase in digitization can place further pressure on Information and Communications Technology (ICT), the cloud and mobile infrastructure, and the data centers that they are powered by. This enormous amount of energy consumption has a higher impact on power sources.
Why Traditional Payment Cards Are Bad for the Environment
Today, first-use PVC cards account for 87% of the more than 3 billion payment cards shipped worldwide. PVC, which consists of toxic chemicals like chlorine and dioxin, is considered by many to be one of the most harmful plastics on the market. When PVC cards are manufactured, a host of pollutants are released into the air—damaging everything from drinking water to the ozone layer.
As consumers have gotten savvier about environmental concerns and how brands conduct operations, this has increased the payments market investment in Research & Development (R&D) for alternative card materials.
Many banks are shifting toward eco-friendly payment cards to accommodate climate policy and consumer demands.
What Sustainable Card Materials Exist?
Below are the alternative payment card materials that can be leveraged.
- Recycled PVC (rPVC): Recycled PVC is easily the most common alternative material used by payment card issuers—reaching 638 million card shipments in 2026. Across all regions, rPVC is set to be a mainstay—and even challenge first-use PVC in Europe—thanks to the convenience, price point, and ease of integration with existing personalization infrastructure.
- Polylactic Acid (PLA): Although more expensive and having a relatively shorter lifecycle than other sustainable card materials, the key benefit of PLA is that it’s a purely biological material and is biodegradable. Europe will experience the strongest uptake in PLA payment cards as Triodis, Santander, CaixaBank, and other regional players are already embracing PLA. A good example of a PLA-based payment card is challenger fintech C6’s corn starch-made Acqua card, which is the first biodegradable payment card ever launched in Brazil
- Polyethylene Terephthalate Glycol (PETG): Payment cards made from PETG are highly recyclable, durable, and less environmentally toxic at the manufacturing level than PVC. PETG also sits at a more favorable price point than PLA. Thcountlessmyriad ESG projects, the Asia-Pacific region will account for 58% of total PETG payment card shipments by 2026.
- Reclaimed and Ocean-Bound Plastic: While nascent in most regions, reclaimed and ocean-bound plastic cards will approach the mainstream in North America. This isn’t surprising since 85% of Americans favor policies protecting threatened or endangered marine animals. Major players like CPI Card Group and American Express have espoused this eco-friendly trend. Key to developing reclaimed and ocean-bound plastic payment cards is partnering with non-profit environmental organizations like the 350,000+ volunteer group Parley for the Oceans—as Thales recently did to create the Thales Gemalto Ocean Plastic card.
The chart below shows ABI Research's forecasts for payment cards by material.
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Be Aware of Green Washing When Marketing Sustainable Banking Solutions
We expect a 14% decrease in the total share of payment cards shipped with first-use PVC in just four years. Indeed, smart card players are quickly adapting to the call for socially responsible banking. Besides reducing carbon emissions, alternative card materials provide a differentiated market position.
The shift toward mass adoption of eco-friendly payment cards will depend on influential marketing campaigns by banks, financial institutions, and smart card manufacturers. These campaigns must educate consumers about why a product (s) aligns with their values. This is where brands must be careful not to practice “greenwashing.”
For example, some payment card offerings dubbed “renewable” are made of primarily first-use PVC. Banks must do their due diligence and set up proper procedures to support their sustainability claims. If not, customers will quickly detect false information surrounding your sustainability claims and call you out on social media.
It is becoming critical to understand the consumer and the social/environmental values they increasingly place on sustainability from the businesses they transact with. This is very much visible in the payments market, with cardholders and prospective customers willing to select or transfer to banks that reflect their global values by developing and adopting sustainable banking practices, with a vast majority of consumers preferring their bank to actively contribute to preserving the planet and offering sustainable material payment cards.
End-of-Life Card Disposal Is the Final Piece to the Sustainability Puzzle
Ultimately, eco cards should be marketed as a solution, not a product. Using sustainable materials is just one aspect of a greener banking market. Card issuers must consider how payment cards—especially PVC cards—will be disposed of or recycled once they expire.
A circular banking economy is an untapped and unregulated space that desperately needs more attention. Without setting up and educating customers on an end-of-life card disposal program, payment cards will end up in landfills—hindering sustainability progress.
For best practice, smart card vendors, banks, financial firms, and their partners must be mindful of the following:
- Proximity to reduce the carbon footprint from materials transportation
- Use simplified card designs to make recycling easier
- Cautiously surveil any incineration processes to validate that GHG emissions aren’t undermining sustainable efforts.