The views expressed in this article are solely those of the author and should not be attributed to the European Payments Council.
Currently, more and more companies talk about sustainability and are starting to take action to change their products to become more environmentally friendly and create a positive impact on society. We begin our series of interviews focusing on sustainability in the payments industry with Anne-Claude Tichauer, Head of Transformation and Sustainable Product Design at Worldline, to learn more about how this company is integrating 'greener' practices into their business.
In your opinion, what are the most effective ways to make payments more sustainable?
It is increasingly becoming clear that the need to make payments more sustainable is a given and that the payments industry has no other choice than to find and implement – as quickly as possible – measures that will turn the overall value chain of payment into something more sustainable and green.
To put this in context, worldwide Internet traffic was multiplied by 17 between 2010 and 2020 and has kept on increasing exponentially since then. Online purchasing (and thus also online payments) contributes considerably to that growth, but instore purchasing also relies broadly on the internet and networks, not to mention the fact that electronic funds-transfer point-of-sale devices (EFT-POS) are electronic with a strong impact on carbon footprint. They are made of around fifty different sorts of metal, among other components like plastic. If anything, the latest reports of the Intergovernmental Panel on Climate Change (IPCC) should alert all of us to the urgency of the current situation and the need to act to safeguard the future.
So, now that this has been clarified briefly: what options does the payments industry have to provide greener payments?
- What I can observe right now is that the required level of coordination and collaboration within the payment ecosystem poses a challenge. Most companies in the payments industry currently focus on their environmental impact with little insight into the complete ecosystem and no oversight on biodiversity impact. This is obviously not to be condemned but it is not enough, and I see that as a significant obstacle to overcome. I would suggest a more systemic approach. No single company can tackle the issue alone, which is why collaboration is vital. It needs to be end to end. That is both the most significant challenge and the most effective way to tackle the issue.
- This requires a change in attitudes and approaches. Sustainability by design (green payment by design) is a concept that many entities are currently trying to introduce into their corporate strategies and environmental commitment plans. It's about being proactive and recognising failings and opportunities to improve and change immediately.
- Regulation can partly aid with making payments more sustainable and can certainly act as a driver, but I don’t believe this is the only path. In my opinion, it's really up to all actors within given industries to gather, discuss and collaborate on how they can adjust and contribute together. It needs to be a team effort.
- The payments industry also has a role to play when it comes to consumers’ habits by helping them to consume better, more locally and second-hand, for instance. I will come back to this in more detail in the last question of the interview.
Could you tell us more about how your company is contributing to more sustainable payments?
It is part of our strategy to act for a better world.
My company is not only conscious of its environmental responsibility but also keeps on ensuring concrete actions around its human rights responsibility, philanthropic responsibility and economic responsibility.
These four responsibilities are the pillars of corporate social responsibility (CSR). As in many other big companies, it all started with a strong and efficient CSR team that was very active both internally and externally – for instance, being a big contributor in the definition of the new ecoconception standard. When it comes to sustainability some internal training has been put in place, climate collages and digital collages have been organised to raise awareness among teams.
More recently a decision was made in the product and delivery department, of which I am part, to evaluate the possibility of putting in place a sustainable product design system, and I was happy to be asked to lead this great project. The numerous and positive, sometimes even enthusiastic, reactions that followed the announcement of my new role really showed the willingness of many people in the product and delivery teams to make payments greener. This is a clear sign that the company wants to make payments, and its overall product and service portfolio, more green and sustainable from top to bottom as well as bottom up. One concrete example is that we have already started considering ESG (Environmental, Social & Governance) impacts as part of our Business Value definition.
What are the challenges of adopting and creating sustainable payments?
Let’s start with the creation part. As I mentioned previously, the main challenge I see is to find a way to involve all actors in the industry. This would involve payment terminals, card manufacturers and issuers, device manufacturers and cloud services, among others. The physical parts of the payment chain represent a significant environmental impact (ninety percent according to a recent De Nederlandsche Bank (DNB) study).
However, the true scale of carbon impact remains difficult to quantify, partly due to a lack of concrete definition. Moreover, there is not currently a standard definition for green payments.
The term 'green' is used for many purposes across many industries, but here the goal is that the payments become more sustainable and form an effective tool in the fight against climate change.
To face this challenge, actors in the payments industry need to join forces, commit to the same goals in terms of carbon footprint reduction and define together how they can keep on serving consumers while also serving the planet we live on.
When it comes to the adoption of sustainable payments, payment providers and banks also have a key role to play towards both their merchants and the final consumers: by raising awareness, defining and communicating around new ways of paying that decrease the overall impacts of payment.
Finally, a broader question: how do sustainable payments impact the future of our planet?
It is still difficult to evaluate today how sustainable payments will have a positive impact on the future of our planet. We are not yet far enough into the process of making greener payments to have reliable indicators. What we now know for sure is that the payments industry must find ways to make payments greener in order not to severely impact the future of our planet. Payment is the last step of purchasing and the target should not be to make consumers always purchase more but to help them consume less and better.
As very well explained by economists like Timothée Parrique (a French economist who specialises in degrowth), it is all about changing paradigm and finding a new balance. Degrowth does not mean recession and acceleration of poverty. Degrowth actually means ensuring we can decrease the negative impacts of (over)consumption on our planet by rethinking how we consume (exploring more local purchases, a circular economy, etc.) and taking into account some parameters we either forgot to take into account in the past or were simply not aware of (carbon emissions, deforestation, burning fossil fuels, etc.).
This is actually a very exciting challenge for my company and the overall payments industry: we need to respond to new needs on the consumer side, such as user-friendly and secured peer-to-peer payments to encourage the second-hand market and promote new ways of consumption. It means being even more innovative than today but in a more realistic and frugal way. We need to switch from 'the sky is the limit' to 'our planet is the limit' so that we can ensure future generations all over the world can continue to enjoy a safe life.
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