Should issuers of plastic cards go green?
The prevalence of payment cards, against the growing awareness of climate change, is driving some card issuers and manufacturers to revisit the way they use plastic.
Years after U.S. Bank tried issuing a biodegradable payment card made by CPI Card Group, that same card manufacturer is rolling out a new payment card type made from recycled “ocean-bound plastic” — discarded plastic collected near beaches, rivers and streams.
Littleton, Colo.-based CPI announced Thursday that it will launch its latest brand of environmentally designed card stock this month. The card, called Second Wave, has recycled plastic at the core.
A major issuer, which CPI did not identify, has ordered a batch of the recycled-plastic stock for credit and debit cards, and CPI said other issuers are asking for alternatives to cards made from virgin plastic, to soften payment cards' environmental impact.
Considering that between 6 million and 8 billion plastic payment cards are in circulation globally, CPI estimates that every 1 million cards made from its Second Wave stock could divert a ton of plastic from entering oceans and other waterways.
Though CPI said consumers surveyed prefer recycled plastic cards, analysts are skeptical of the scope of the environmental benefit of using recycled plastic in cards.
"With more than 8 billion plastic cards in circulation at about 5 grams each, that represents about 17 tons of plastic each year, which is a finite issue compared with 73,300 metric tons of plastic straws estimated to be thrown away each year," said Brian Riley, head of credit advisory at Mercator Advisory Group.
Riley suggests payment cards are a lower priority for consumers compared with other environmental issues.
"This is a limited green-marketing play," he said, noting that other groups of consumers might be more concerned about card security than environmental issues.
Balancing sustainable environmental issues with durable cards has been a challenge.
CPI developed its newest product with material that's sufficiently durable to support EMV chips and meet other quality standards.
No current regulations require payment card issuers or manufacturers to use recycled or recyclable materials in card stock, but over the years several issuers have experimented with the concept.
U.S. Bank in 2008 rolled out a biodegradable credit card for its Voyager commercial card customers made from bioPVC, a material CPI Card Group offered at the time. U.S. Bank said it no longer offers the card.
American Express last year vowed to fight plastic pollution through a collaboration with Parley, a group battling the rise of plastic pollution in the oceans. As part of the pact, Amex said it would develop a card manufactured primarily from plastic recovered in the oceans and on the coasts.
Over the long term, Amex said it plans to reduce the use of virgin plastic in all of its card products and cut plastic usage across its organization, aiming for a zero-waste certification at its New York City headquarters by 2025.
Macy’s in 2011 introduced a plan to make all of its gift cards recyclable.
Bank of America and JPMorgan Chase said they have not yet launched any plastic-recycling initiatives for their plastic cards.
More issuers may address the environmental impact of plastic cards in the future, but Riley says digital payments technology may solve the problem first.
"In 10 years, most payment card transactions will be run from a digital device, and as we have seen in many developing markets, the move towards QR codes for payments indicates the card problem may be short-lived," he said.