Multiple recent announcements underscore the desire of retailers and their partners to focus on sustainability within the prepaid card markets. Two key themes seem apparent, focusing on reuse of cards and utilizing more environmentally friendly materials.
Reuse provides a key message for sustainability while also encouraging increased spending, loyalty, and rewards for the card recipient. As Sarah Clark reports in NFCW, fashion retailer Zara is working to replace single-use cards with NFC-enabled contactless key fobs. In her reporting, David Maisey, CEO of MultiPay Global Solutions brings additional context to the issue with a focus on long term customer experience:
“‘Gift cards provide a vital connection between retailer and customer, and like any payment method, is always in need of innovation,’ Maisey says. ‘The arrival of a reusable NFC-powered keychain not only enhances the customer experience by making it easier to carry but also helps reduce single-use plastic consumption.’”
Maisey’s point highlights the results of Javelin Strategy & Research findings that show that in nearly every vertical, belonging to loyalty programs increases spend and increases self-use of gift cards. Making a gift card a permanent item on a keychain, and potentially expanding into a fashion accessory outwardly provides a great message of sustainability while also encouraging reloads, repeat visits, and increased spending.
Card suppliers are also jumping on the sustainability focus and seeking to receive industry certification to provide objective approval of their efforts. CPI Card Group, which reports sales of over 95 million units in its eco-friendly card products recently announced its certification in the Forest Stewardship Council® (FSC®) Chain of Custody (CoC) program:
“FSC CoC certification ensures that certified wood products are tracked from responsibly managed forests to final paper products to verify that FSC-certified material is identified or kept separate from noncertified material throughout the chain. Through the certification process, SCS conducted an independent review of CPI’s sustainability efforts and verified its use of responsibly sourced products.”
These efforts go above and beyond the actual production quality and investment by getting additional, independent approval of their key sustainability efforts. Both sustainability and reuse will be key topics as the industry prepares for the 2023 holiday season and moves into production for 2024 plans. Augmenting these efforts will be continual gradual shifts into digital cards, which are close to representing 40% of the market and provide a third leg of the sustainability message. Each of these pillars will be required to show full commitment of providers, issuers, retailers and other parties in the prepaid space to and to meet the needs of increasing potential regulations, such as the pending California measure (SB 728) that aims to eliminate plastic gift cards entirely by the end of 2027.
Overview by Jordan Hirschfield, Director of the Prepaid Advisory Service at Javelin Strategy and Research.
