A new study by Worldline, a major player in payment processing, reveals that digital payments have a much lower environmental impact than cash.

The research, conducted in Belgium, used life cycle analysis (LCA) to compare the CO2 emissions generated by different payment methods.

Key Findings

• Cash transactions generate more CO2: In-store cash payments produce 14% more CO2 emissions than digital payments (2.8g vs 2.45g per transaction). Factoring in cash withdrawals further widens the gap, with cash emitting 15 times more CO2 (36.8g) than digital payments when considering average cash usage.
• Digital payments can be even greener: Simple measures like eliminating paper receipts, virtualising cards, and using phone-to-phone payments could reduce CO2 emissions from digital transactions by 70%, bringing them down to just 0.74g per transaction – a quarter of the emissions from cash.
• Online payments have potential for improvement: The study estimates online transactions generate 3g of CO2 emissions. Here, the use of smartphones for payments offers significant potential for reducing this footprint by up to 93%.

Moving Towards a Greener Payment Ecosystem

The report highlights opportunities for the payments industry to further reduce its environmental impact.

Patrice Geoffron, Professor of Economics, Paris Dauphine-PSL University:

“The payments industry has a number of levers at its disposal to help it adapt to the decarbonisation imperative. These include eco-design, energy efficiency, decarbonised energy sourcing and circular economy mechanisms.”

Sébastien Mandron, CSR Officer, Worldline: “The continuous adoption of digital payments is already bringing a positive contribution to the CO2 reduction ambitions of Europe as they are more efficient than cash from an environmental standpoint. But, beyond this intrinsic benefit of moving towards digital payments, the good news of this study based on Belgium nation-wide data is that there are many more levers ahead to further optimize the digital payment CO2 footprint.

"To fully activate these levers, we’ll need to go beyond what a single company can do by itself and also work collectively as an ecosystem. Associating industry players, banks regulators, policy makers and, of course, citizens around this common goal will allow to promote in the years to come, constantly more CO2 efficient solutions while keeping security and convenience at the highest levels.”

This study provides strong evidence that a shift towards digital payments can contribute meaningfully to environmental goals. By working together, the payments industry can become a leader in sustainability.

To learn more about the study, click here

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Source: Worldline