While issuers and merchants scramble to issue EMV-chip cards in the U.S., Gemalto is taking a longer view into the cards' environmental impact when they are discarded as part of regular reissuance.
To reduce the carbon footprint for EMV and other plastic cards, Gemalto is offering a biodegradable card made mostly of corn, starch and sugar materials. Most plastic payment cards are made with petroleum based materials, which leave a larger carbon footprint when discarded, aid Billy Tran, manager of financial services for Gemalto.
"If you try to incinerate [standard plastic cards], the fumes are toxic," Tran said. "There is an inherent lack of awareness that there are sustainable options available."
The corn-based materials leave less of a carbon trail when thrown away, Tran said.
There are other options for environmental card disposal, such as recycling the petroleum compounds, Tran said. "The challenge around that is the quality of the plastic isn't as good," he said. "With the 'corn cards,' you can break them down more efficiently."
The corn-based cards do carry some challenges of their own, mostly due to EMV and dual interface cards including non-plastic material, such as antenna made out of copper wire. The cards' chips must also be made of metal. "But the harder piece to dispose of is the plastic," Tran said, while acknowledging there wasn't a corresponding easy disposal option for copper or metal components.
Tran did not discuss the cost of the corn-based cards, saying there would be cost benefit from marketingconsumers will be attracted to the "environmental" cards, which is a factor that could make them "top of wallet," Tran said.
Coop Bank in Denmark, which is the first bank to issue Gemalto's biodegradable cards, said it plans to issue about 20,000 cards within the next year.
But analysts say tying sustainable card materials to the EMV migration may be tough sell, given the ongoing challenges of getting the EMV cards out into the market in the first place.
"It's difficult to consider the environment when scrambling to address the EMV liability shift occurring this October," said Tim Sloane, director of the debit advisory service at Mercator Advisory Group.
Environmental issues may have been a consideration before EMV, "but history indicates that banks do not expect a 3" by 2" card to create much waste, even if it is re-issued several times a year due to fraud," he added.
The environmental impact is the "last thing" most U.S. issuers are thinking about today, said Julie Conroy, a research director at Aite Group, adding there may be some traction down the road for plastic card sustainability strategies if costs are manageable.
"I can see some issuers willing to make that extra investment for the marketing value, and putting a big splashy campaign around it, which ironically will likely have its own carbon footprint, but unless the incremental costs are negligible, I am skeptical that we'll see a widespread adoption," Conroy said.