Expiration inspiration: recycling payment cards

The impact of humankind on the planet is clear. According to one source, even two Earths would be insufficient to support the increased demand for resources predicted for 2030.¹ In this alarming scenario, sustainability is simply not negotiable.

It is incumbent on good corporate citizens to do what is required. Many leading corporates have signed on to the pledges enshrined in both the Paris Agreement² and the United Nations 2030 Agenda for Sustainable Development.³ 

People around the world are increasingly aware of the environmental impacts of their choices, and expect the same from the banks that supply their payment cards – even though their direct environmental footprint is relatively small. While practical obstacles exist to positive change, including legal and regulatory hurdles, numerous banks have shown the will to chart a way forward that is more sustainable. Every part of the customer payment experience can be improved in this regard, from payments and banking services to logistics and transport. An end-to-end approach is the best way to think about sustainability. 

Using recycled materials to make payment cards is one way to lessen waste and further sustainability. Another often-overlooked element that is gaining traction is end-of-life management for payment cards. Useful products are made from these cards once they can no longer be used in the financial system. The payment card has special significance for both the bank and its users. Banks know users are reminded of who issued the card every time they use it. For consumers, the card is increasingly a value or even lifestyle statement, with choices in color, material, and more. To view it as part and parcel of a bank’s journey toward sustainability has weight, both practically and symbolically. 

Toward sustainable cards

The European Central Bank (ECB) says that there were just under 670 million payment cards in the euro area in the first half of 2023, up almost 5% from the previous year.⁴ All of those cards will expire within a few years. Historically, the fate of an expired card was to be cut up and then disposed of by the users themselves. This isn’t ideal, as the disposed cards end up in landfills, or are incinerated causing further damage to the environment.

There is an opportunity for banks and their partners to bring collection and recycling of their card products to the forefront. Early adopters see a first-mover advantage in differentiating their products from others. Eco-conscious customers, a growing demographic globally, will be attracted to such services as well.

Indeed, a recent survey commissioned by the Smart Payment Association (SPA) found that 33% of top leadership in banks across multiple European countries felt such end-of-life management was crucial to their organizations.⁵ To that end, one-third of respondents (a similar number) reported having ATMs capable of collecting expired cards, which is one way in which that end-of-life management can happen.

Sustainability starts from a payment card

One approach to more sustainable payment cards is to manufacture them from recycled materials. Choosing payment card bodies with responsible product design can make recycling easier. Various financial institutions have been issuing cards made from recycled plastics or other repurposed materials, or from plant-based plastic. Deutsche Bank in Germany has committed to a target of 99% of its new cards by the end of 2024 being made from recycled plastic. This approach can reduce the reliance on single-use plastic, raise public awareness, and reduce CO2 emissions.

A payment card manufactured from recycled materials is a good start. Beyond that, it is worthwhile to consider the entire life of the card. Can a positive benefit accrue to the environment from the other end of a payment card’s life cycle?

End-of-life management

Such an approach goes beyond including recycled materials at the beginning of the card’s life – it also takes into account what happens when the card expires, and is thus crucial to a holistic treatment of the card’s entire life cycle. Thus, a card is designed and engineered with its sustainability and end-of-life in mind, so a better, more environmentally friendly recycling process is available as an option at the end of its life cycle.

Secure wiping of the user’s information and the convenience of their journey are of course crucial in this process. Sustainability won’t be achieved if these aims aren’t foregrounded. Keeping that in mind, this is what an end-of-life journey of a payment card should look like, in its barest outline. Upon expiry, the bank takes possession of it, strips it of its information in the most secure way possible, and moves it in its constituent elements to be recycled.

The collection of cards can be done in many different ways. There is no one-size-fits-all solution, as take-back schemes are tailored to a particular financial institution’s situation. The options include the following: 

• Drop-off at branch: Some banks offer card recycling boxes, which shred cards as soon as they are dropped in. They will be securely stripped of all personal information and then recycled.
• Drop-off at ATM: As convenient as going to the nearest ATM. Select the relevant entry from the menu, pop in your card, and walk away.
• Mail-in: A secure mailing loop is established and managed so that the expired cards can be returned without any cost (or other issue) to the user. This would include reminders, postage-paid envelopes delivered to the customer near the date of expiry, tracking numbers, and the like. Once delivered to the bank, the card can be securely disposed of.
• Contracting with a third party: A partner organization – like a merchant or a cash-in-transit (CIT) company – can take on the task of collecting the cards, including through designated drop-off points. Once collected, the cards are processed as above, including being stripped of their information and recycled.

However, banks and other card issuers have flagged obstacles on their way to adopting end-of-life management of their cards. Broadly speaking, these are the issues they face on their individual routes to sustainability.

Obstacles to end-of-life recycling

There is increasing acceptance of every organization’s role in promoting sustainability, and the fact that customers are motivated to seek out products that fit with their own philosophies. The positive impacts for the environment are clear, and so is the benefit to the individual bank.

Yet, SPA’s study revealed that 39% of responding institutions didn’t feel they had the know-how to initiate an end-of-life management program for their payment cards, while 48% felt they lacked a third-party partner that could provide that expertise.⁶ A lack of budget played a part, as did competition with other “green initiatives” within the organization. While none of these are individually insurmountable, they do add up when taken together. 

The good news is that the third-party expertise financial institutions require already exists. In one groundbreaking program, Santander Bank recycles expired payment cards into community furniture such as benches or flower planters. Cards are collected by Santander through their ATMs, and are then transported to G+D to give these expired cards their second life. To date, Santander has generated 3,700 kg of recycled plastic, which has been turned into 239 benches. 

An interesting feature of this program is that the cards Santander collects aren’t limited to ones they’ve issued: they accept cards from any bank. This echoes multi-stakeholder initiatives in other industries; in Germany for instance, dairy and other beverage bottles can be brought back to any retail outlet to be recycled, and not just to the store that sold them in the first place. This is a further benefit of using the ATM to collect cards. It is a cost-effective and quick means of collection, while also bringing the end users – the environmentally conscious customers who want to recycle their cards – to the bank’s doorstep, where they can partake of the full range of services the bank offers. It is also a great way to educate the public about sustainability in general, even those who aren’t Santander customers in the first place.

Sustainability at every stage

In all, 45% of respondents – ranging from “rather yes” to “definitely yes” – said they were open to collaborating with other banks in order to successfully collect and recycle their payment cards, stated SPA’s study.⁷ Joining forces like this adds capabilities from other organizations, and helps cut costs. Sustainability isn’t a competitive exercise – it benefits everyone.

The final step is to manage what happens to the card when it expires, so it isn’t simply cut up and thrown away. The Convego^® Beyond Ecosystem provides support at each of these steps, from eco-friendly cards to end-of-life management. “By transforming payment cards into community assets, our recycling initiative with banks highlights our commitment to sustainability and community enrichment for future generations,” said Maya Reisinger, Director of Product Management of Convego^® Beyond at G+D. As a responsible partner to banks and other financial service providers around the world, G+D stands ready to add its background and expertise to the push toward sustainability at every stage of the payment journey.