G+D’s 2030 Virgin Plastic Replacement Pledge Champions Payment Card Sustainability

On July 20, Giesecke+Devrient (G+D) declared its intent to replace virgin plastic with recycled, industrial compostable, or biodegradable materials in payment cards across its entire portfolio. The payment card plays the part of a branded anchor between the bank and the account holder and can be a physical representation of the commitment toward sustainable material choices. G+D anticipates that this pledge will act as a leading movement behind which the payment card industry can follow in its efforts to migrate away from first-use PVC as a card material, something that is already being seen in the market and is an accelerating trend.

G+D has made this pledge as an expansion on its goals set out in its Convego Beyond strategy, partnering with Parley, Doconomy, and Patch to bring about a holistic ecological approach to the full payment card lifecycle, seeking to fill the gaps in the value chain that sit outside the card material decision, such as card reclamation, recycling, and issuance.

G+D has also sought to provide an innovative solution for Santander payment cards by using Automated Teller Machines (ATMs) to retain expired One Santander debit and credit cards, upcycling them into street furniture in conjunction with the bank. These expired cards will become furniture, such as benches, litter bins, or flowerpots, and will demonstrate a commitment toward establishing a waste-free and circular economy.

The payments market is experiencing significant scrutiny as it relates to sustainability, not just from the regulatory side, but also from end-user bases. Customers now clearly opt for banks and financial institutions 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 offer sustainable material payment cards and alternative solutions.

This changing attitude is evidently now being followed by the banking industry. Especially in the wake of the COVID-19 pandemic, many banks around the world have placed an emphasis on their environmental focus via net-zero and carbon offsetting. As of 2022, 53 banks from 27 countries have joined the Net-Zero Banking Alliance set up in 2021, demonstrating a clear commitment to reflecting the values of their customers and achieving net zero by 2050. This need from banks has driven smart card vendors like as G+D, Thales, and IDEMIA to form partnerships with ecosystem players to fulfill the needs of banks to appeal to new customer bases and target younger segments of the market.

Neo and challenger banks have already begun to make significant strides in this space, attempting to close the loop between the bank, the card vendor, and the customer as it relates to a sustainable mindset. Innovation and flexibility of fintechs should be paired with customers’ willingness to live a more sustainable life and should involve them in the process. Reinforcing the value of taking personal responsibility for the planet and equipping consumers with the tools needed, whether this takes the form of additional funding for planting trees or a carbon footprint calculator for consumers, are critical to succeeding in this space.

While the payments market is rife with solutions for alternative materials, carbon offsetting, and sustainable personalization techniques, there remains a void to fill as it relates to card disposal techniques. This becomes more of an issue when considering the lack of universal regulation in the industry to manage smart card offerings at the point they reach the end-of-life and must be disposed of or recycled.

In response to plugging the gap, some smart card vendors are positioning themselves as intermediaries between the banks and the recycling organizations, providing an end-to-end solution. By recycling the material of the card, or incinerating the waste material, and then recovering the metal within the card and transferring it for use in other end markets, such as electronics or jewelry, the end result is that none of the waste material of the card ends up in landfills. This requires a number of factors to come into play to ensure that the sustainability of the practice is kept as intact as possible:

• Proximity: Keeping these solutions local is key to eliminating unnecessary long-distance transfer of materials. Keeping this as the focus of any recycling program will mitigate the carbon footprint, as transporting materials can quickly undo any carbon reduction achieved.
• Card Components: Modification and design of cards may need to be altered to achieve an all-encompassing card recycling program. Whether it be the removal of components, such as the magnetic stripe or signature panel, or simplifying the color designs and use of personalization consumables, this can help streamline the recycling process as much as possible and maximize the reduction of carbon footprints. Of course, this will not be possible for all card designs, technologies, and issuing banks.
• Incineration Practices: To dispose of any material by incineration brings about its own environmental concern. While it is a preferable alternative to simply discarding a payment card in a landfill, producing toxic gases through incinerating waste material must be carefully monitored and managed to ensure that true sustainability is being achieved.

There can be no doubt that solving the problem of expired and end-of-life cards is a challenge. How to reclaim the card, separate the materials, and manage multiple recycling/incineration programs, while reducing travel, managing the carbon footprint, and conducting the process at a manageable cost is something for which there is no silver bullet at this point. But given the swift uptake of alternative materials and a push from banks and card vendors toward achieving Environmental, Social, and Governance (ESG) goals, this indicates that there is a real opportunity in the payments card market to provide an all-encompassing solution.