How can banking be better for the environment? One option, offered by international digital security company Gemalto, is a biodegradable contactless card. Patrick Brusnahan talks to Billy Tran of Gemalto about this new product and its benefits as well as other sustainable services that can be provided by banks
Gemalto’s new offering, currently deployed with Coop Bank in Denmark, is an environmentally friendly contactless chip card. The main highlight, in an environmental sense, is that the card is biodegradable.
When speaking to RBI, Billy Tran, marketing manager for financial services at Gemalto, said: "Obviously, billions of payment cards are manufactured each and every year. The industry standard, in general, is using a plastic called PVC, also used in piping and other plastic products.
"That’s been the industry standard for the last 20-30 years, but it is derived from petroleum, which is not the most sustainable resource and the PVC plastic does not biodegrade.
"It sits in landfills along with all of the other plastic products out there and if you try to incinerate them or break them down in other ways, they release toxic fumes which are also harmful for the environment.
"We’ve developed a plastic product not developed from petroleum, but from corn. The new card is made from PLA, which is basically plastic made out of corn starch sugar.
"We derived the card out of the corn-based material with the beneficial knowledge that corn is a renewable resource and the card product is 100% biodegradable. If you throw it into a landfill, it will decompose back to its original form in a few weeks."
Denmark-based Coop Bank has already devoted substantial efforts to create an environmentally stable card network.
To date, Coop Bank has issued a total of nearly 50,000 cards, all of which are biodegradable EMV cards with another 20,000 expected over the next year.
In fact, Coop Bank has been dedicated to the cause since its launch in 2013. In its entire existence, all MasterCard credit cards, debit cards and Visa/Dankort cards have been issued as biodegradable EMV cards.
Now, all newly-issued MasterCard cards are also contactless, as well as having the biodegradable factor, with Visa/Dankart cards set to be the same, starting in the second half of the year.
There are some challenges with implementing such a product; the first being manufacturing.
Tran said: "There are some complications with chip in terms of being able to put a chip on the card. Complications such as making sure the plastic and the chip adhere properly and, with contactless cards, there were further challenges.
"Particularly, making sure that the antenna fits properly inside and that you still have a quality product with the durability and lifespan to be able to be in the consumers’ wallet."
The awareness factor
Another problem is actually making the market aware to these more environmentally sound options. This does not mean just consumers, but the banks and card issuers themselves.
Tran added: "This technology has been around for a few years. It is not just about creating consumer awareness in the marketplace, but building awareness in terms of financial institutions being aware of the options outside of traditional PVC that bring value to the consumer.
"I think Denmark is a great case study in that you have a very high consumer awareness of environmental issues and there’s an expectation for environmentally sustainable products in everyday life.
"Combining that with a market that is already using chip cards and recognises the convenience of contactless payments, you get the best of both worlds.
"The US is becoming more environmentally conscious, as are other parts of the world, and we believe that as awareness grows, so will the demand for such a product."
While the biodegradable card is a step in the right direction, there is still much more that can be done to make the financial sector more environmentally sustainable. Two factors that Tran highlighted were in deployment and manufacturing.
Tran said: "The plastic is only a portion of what the consumer gets when they receive their card. The product is probably in an envelope and it’s delivered by a carrier. As part of our offering, there are options for printing on recycled paper; there are envelopes that are more sustainable.
"We are also looking at the size of the chip, which is made out of metal. They come in different shapes and sizes. Historically, the chip that goes on the card is a square 8-pin module.
"Globally, something Gemalto has championed is the use of a smaller chip. Functionally, it is exactly the same, but uses less metal.
"By using a fraction less, you have a tremendous environmental impact considering the billions of cards produced every year."
Other manufacturers in the industry have made attempts to be more environmentally conscious in their cards, especially with the usage of recycled PVC. However, Tran found that that process ‘doesn’t produce a finished product as high quality or as durable’ as Gemalto’s offering.
To make the card a quality product, the recycled PVC needs to be mixed with regular PVC, making the product far less sustainable than it may seem.
Tran concluded: "The PLA product is unique to Gemalto. In the end, PVC is not renewable. Our biocard is a step forward."