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Eco-focused cards are emerging as a significant force in reshaping the relationship between financial institutions and consumers—not only in the reduction of first-use plastics in payment cards but also in having a positive impact on the environment.
In a recent PaymentsJournal podcast, John Lowe, EVP of End-to-End Payment Solutions at CPI Card Group, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, explore how banks and credit unions can be better equipped to address the sustainability concerns of their customers and the impact these sustainable cards could have for years to come.
A More Sustainable Process
The use of recycled PVC, a synthetic polymer of plastic, in card products is not new. In fact, the practice can be traced back to about 25 years ago. However, it failed to gain a significant foothold in the market even as consumer interest in more sustainable products grew.
Recognizing this opportunity, CPI consulted with its research and development team to determine a way to include recovered ocean-bound plastics in the production of payment cards. According to UNESCO, about 10 million metric tons of plastic end up in oceans each year.
“One of our longstanding leaders of our R&D team engineered a solution that was able to incorporate recovered ocean-bound plastic into the core of a payment card,” Lowe said. “CPI then branded and launched the solution that we call Second Wave® in late 2019. And this led us to partner with one of the largest issuers in the U.S.” Since that launch in 2019, CPI has shipped ~100 million eco-focused cards.”
Over the years, CPI has taken a stronger position around sustainability and continues to amplify its efforts within the space. CPI’s market research found that more than 80% of consumers would consider switching to an ocean-recovered plastic card if it were made available by their current issuer. And more than half of respondents said they would move from one financial institution to another if there were an offering for a card made from recovered ocean plastic.1
Ensuring that products and services are more sustainable aligns with the growing focus on ESG. This includes increasing regulatory and reporting requirements, in addition to consumer demands that companies take steps to reduce environmental impacts.
The Future of Eco-Focused Payment Cards
Banks and credit unions have an opportunity to ramp up their sustainability efforts, and they can begin by offering eco-focused financial products and services.
“These efforts help create more demand for recycled materials and increase the incentive to collect them across the globe,” Lowe said. “We’re also in the process of bringing recovered ocean-bound plastics cards to our instant-issuance solution, a solution that we have in thousands of financial institution branches across the U.S.”
This strategy aims to marry convenience for the cardholder and loyalty to the card as it aligns with the sustainability principles of CPI’s customers and the financial institutions’ customers. Lowe further explained that CPI is driven by a desire to be a force for good. The company aims to be mindful of the social impact and responsibility of its work, he said.
The trend toward eco-focused payment cards is well underway. Earlier this year, Mastercard announced that as of January 1, 2028, all new cards on its network will be made of sustainable plastics. Larger U.S. issuers are already moving along this path.
If there are any doubts among financial institutions about the viability of this trend, they will soon discover that it’s not a flash in the pan, Riley noted.
“The Mastercard issue is a big deal,” Riley said. “You can really see the cards are behind it when you start doing the math on how many plastics are in circulation. We’re in the billions and billions, so there’s certainly a lot that can be impacted here.”
“You’d be surprised at the amount of time and effort that goes into the branding, the marketing, the artwork on a payment card,” Lowe said. “The fact that we can create an eco-focused card that essentially looks like your typical payment card … we’re going to see eco as a means to expand payment cards long term.”
Why Banks and Credit Unions Should Embrace Sustainably Focused Solutions
Sustainability is a top-of-mind concern for many financial institutions. In a survey conducted by Javelin, involving 100 executives of small and mid-sized financial institutions, more than 80 reported having sustainability initiatives already in place.
What’s more, many respondents reported being very concerned about sustainability and having a budget allocated specifically for related issues.
“The numbers indicate that most institutions are already preparing for the moves,” Lowe said. “And if you haven’t, it’s something that you should definitely be focused on.”
Another key finding in the survey, unsurprisingly, is that younger demographics showed the highest interest in eco-friendly payment cards. Because this group was found to be highly receptive to this type of product, Riley said, this is a great opportunity for banks and credit unions to grow their portfolios if they do issue credit cards.
Eco-Focused Payment Cards Will Be Table Stakes
Financial institutions can do much to appeal to their customers’ concerns about sustainability. It may seem overwhelming at first, but many can begin by offering financial products and services that align with their sustainability values.
Providing the option for an eco-focused payment card is a step in the right direction, letting their customers know that their financial institutions are committed to promoting responsible actions that can contribute to a healthier planet.
1CPI consumer insights fielded November 2022 n2100
