What’s smokier? Coal or Internet? What’s greener? Card or Cash?

Replacing all virgin plastic in its payment card products by 2030! Why? How easily? Naresh Rao, Vice President Financial Services Solutions, Giesecke+Devrient MS India Private Limited swipes a new approach to card payments

How much impact can recycled payment cards make in this industry?

Most payment cards — we’re talking about credit and debit cards — are currently made from PVC, which is a material known for its durability and flexibility. But producing PVC involves the use of fossil fuels and emits pollutants, contributing to environmental degradation. Of course, a payment card with only about 5 grams of plastic is very small in comparison to other items. But, we currently have 27 billion payment cards in circulation worldwide. You can see how this sums up, and contributes to the plastic produced worldwide annually.

What about the environmental impact of magnetic strips?

With billions of these payment cards in circulation, transitioning to recycled materials can significantly cut plastic waste.  Recycled cards can prevent the use of virgin plastic (new, unused plastic) and reduce environmental degradation. But PVC is only one part of our payment cards. If we want to take sustainability seriously, we have to look at the entire card’s lifecycle, from production to disposal. Secure and responsible recycling systems are essential to reclaim and repurpose both core materials and components like magnetic strips and embedded chips, as specialised materials need also specialized processing. The metals and plastics found in payment cards are usually separated and sorted, among other key steps. The plastic is then washed and melted into pellets that can be used in the production of new products. For payment cards, rPVC (and PVC) is by far the most common material, and the recycled outcome is used in items such as pipes, flooring and traffic cones, for example.

Payment cards are only valid for a few years. Once they reach end-of-life, the normal practice was to cut them up and dispose of them.

How serious is microplastic pollution owing to payment cards?

Since there are billions of payment cards in circulation worldwide, the cumulative environmental impact of discarded cards can become quite significant. That’s also a question for environmental scientist, but from our previous research, for our Eco-innovative payment solutions, we know that 85 per cent of the waste in our oceans comes from plastic, and 91 per cent of the world’s plastic isn’t recycled, according to resp. research resources. So, there’s an opportunity to make a significant difference by recycling our payment cards. Considering also the fact that recycling cards reduces its carbon footprint by up to 50 per cent, as compared to producing a new card from virgin PVC.

And it’s not just about the environmental cost, the plastic recycling market in India has grown to become a USD2.18 billion machine in 2024.

Elaborate that angle please.

Companies in the industry incl G+D therefore are innovating different forms like cards from 100 per cent recycled plastic or recovered plastic material. These recycled plastic cards are well established and highly affordable, despite the common perception that more sustainable products are significantly more expensive. Different materials are also being used, such as a 100 per cent industrially compostable bioplastic card, or upcycled plastics.

A single plastic card, usually made of PVC, only weighs about 5 grams, but 26 billion of them can tot up to 130,000 tons of plastic in circulation- err, 10 times the weight of the Eiffel Tower. The materials used are, often, toxic, hard to recycle, and harmful when incinerated or left to decompose in landfill. Cards take hundreds of years to decompose, but have an average valid life of just 3-5 years.

Edgar, Dunn & Company (EDC), 2022

Do you take care of Scope 1, 2, and 3 carbon impact in your business?

You refer to the greenhouse gas (GHG) emissions covered under the Greenhouse Gas Protocol, the world’s most widely used GHG accounting standard.  I can quote here directly from our global G+D decarbonisation roadmap: Our impact on reducing emissions in Scope 1 and 2 in the area of energy is particularly high. We purchase almost all of our electricity from renewable sources (2023: 98 per cent) and are also committed to building our own plants for sustainable energy generation. At the same time, we are continuously reducing our energy consumption wherever possible.

Recycling cards reduces its carbon footprint by up to 50 per cent, as compared to producing a new card from virgin PVC

How does that align with environmental consciousness?

For today’s consumers, environmental aspects are getting more and more important, it is part of many people’s lifestyle, and part of their buying decisions.  Many Consumers would like to buy environmentally-friendly products, and they want to recycle them at the end of the lifecycle.

What should a card user be aware of here?

Typically, payment cards are only valid for a few years. Once they reach end-of-life, the normal practice was to cut them up and dispose of them. This isn’t ideal; they’ll just end up in landfills or be incinerated. As mentioned before, recycling payment card reduces its carbon footprint by up a significant amount, as compared to producing a new card from virgin PVC.

Can the ecosystem also jump in with new changes?

Banks can support their customers by offering not only cards from sustainable materials but also with applying sustainable welcome packs for new cards and with recycling options. In regards to recycling, there a few options, to the collection process. A global practice followed by many banks is to return the expired card in an ATM or a drop-off box at a branch that can shred cards, which ensures that sensitive data cannot be copied or stolen. Alternatively, a secure mailing loop can be established to allow expired cards to be returned via the post. The incorporation of reminders, postage-paid envelopes and tracking numbers can provide them with everything they need to dispose of a card correctly. These options can empower consumers to participate in sustainable practices.

We definitely need to look at the bigger picture; in this case, the entire system of producing, distributing collecting and recycling expired cards. Financial institutions must put in the effort to develop comprehensive initiatives to recover and repurpose materials from old cards, ensuring a closed-loop approach to sustainability.

Overall relative environmental impact of Cash per unit process on resources is 21% (ATM electricity), 28% (transport) and on ecosystem it is 35% and 38% respectively.

‘Cash:  A Roadmap to Sustainability’ report, Reconnaissance International

Tell us about G+D’s sustainable card solutions, as well as your challenges and accomplishments in nudging Indian fintech and payment companies towards a greener posture.

Besides the previously described recycling programs, we are offering cards that are made from recycled plastics, and biodegradable materials, in our Convego Beyond product range, incl eg one card with a body made of 100 percent recycled PVC.

It is also important to say that choosing payment cards made from more sustainable materials doesn’t mean sacrificing design or aesthetic appeal, which is also reflected in our range. But the card is just the tip of the iceberg.  We supports financial institutions at every step of the payment process, from eco-friendly cards to digital banking, all the way to end-of-life management. Also we aim to replace all virgin plastic in our payment card products by 2030. We’ve also been working together with leading Indian public sector bank and fintech companies to help them achieve their sustainability goals. Thanks to our successes in the Indian market, we’ve observed growing interest from industry leaders, and we feel this reflects the rising commitment to sustainability in the financial sector.

By Pratima H