Sustainable payments: Innovating for our financial ecosystem

Consumer behaviour has always been a massive force for change, and the payments industry is no exception. The trend towards sustainability and especially the movement of consumers towards a sustainable lifestyle is one that the payments industry has addressed—somewhat.

In this article, we explore how sustainable payments are reshaping the financial industry. We highlight some practical strategies for card issuers seeking to innovate in the sustainability space and reach consumers who care about the impact of their choices. We will also examine the growing influence of sustainable payments on consumer behaviour and their role in facilitating greener e-commerce.

Why sustainability in payments matters

We know that simply using a payment card has an environmental cost. According to the Dutch Central Bank, a single debit card transaction emits as much as leaving an 8-watt light bulb on for 90 minutes. Scale that across nearly six billion plastic payment cards issued globally every year, and the need for change becomes apparent.

But this isn’t just about reducing emissions. It’s about unlocking a new model of value—one where payment providers not only adapt to ESG standards but also embrace them.

The real opportunity lies with banks, fintechs, and other types of card issuer companies that recognise ESG as a pathway to innovation, trust, and long-term value creation.

1. Regulatory pressure and ESG standards: As many countries move toward stricter reporting requirements and ESG standards, sustainable payments are becoming a regulatory necessity rather than a voluntary effort. The UK’s Transition Plan Taskforce (TPT) and the EU’s Corporate Sustainability Reporting Directive (CSRD) are setting the pace for credible, science-based disclosures and long-term ESG accountability. Forward-looking payment firms should therefore not see this as a burden, but as a platform: aligning with these standards builds resilience, trust, and relevance in an increasingly sustainability-conscious marketplace
2. Consumer demand: Today, payments are no longer simply seen as financial transactions, but a reflection of personal values. According to Mastercard’s 2023 Report, sustainability and mindful spending are major concerns for global consumers. Many consumers seek out the most environmentally friendly payment options and are willing to shift their loyalty toward brands that provide increased transparency.
3. The payments sector as an enabler and influencer of sustainability goals: Beyond compliance and consumer trends, the payments industry can play a pivotal role in advancing sustainability goals. While 60% of e-commerce businesses would choose a payment provider based on their commitment to ESG, only 5% of payments businesses see ESG as a priority for 2025. Companies that focus on closing this gap can position themselves as leaders in a rapidly evolving market that helps merchants meet their sustainability targets.

Emerging trends in sustainable payment

Innovative technologies are reshaping the way payments are made, tracked, and perceived. From carbon calculators and eco-friendly card materials to decentralised finance (DeFi), the sector is undergoing a large-scale green transformation.

1. Digital carbon tracking tools and offset options: New banking platforms are integrating real-time carbon calculators, giving consumers insights into the impact of their daily transactions. By embedding offsetting options directly into the user journey, providers are empowering climate action at scale.
2. Eco-friendly card materials: Since the payment card industry manufactures around 6 billion cards annually (equivalent to 30,000 tons of PVC), there is growing pressure to reduce plastic waste. Some financial institutions have begun offering sustainable alternatives, such as biodegradable or recycled material credit cards. However, card issuers must ensure they select a payment card body that is made of wood, rather than one that claims to be made of wood but conceals plastic or even metal layers within its body.
3. DeFi and sustainable blockchain: Decentralised finance presents an opportunity to combine transparency with sustainability. Proof-of-stake blockchains drastically reduce energy use compared to traditional infrastructure, while innovations like green tokenisation can bring new credibility and traceability to ESG investments.

Practical strategies for a greener payments ecosystem

To move from ambition to action, payment companies must adopt tangible and scalable environmental strategies that build long-term trust with consumers and investors.

1. Carbon receipts and green loyalty programs: Integrate carbon tracking and offset tools directly into apps. Go beyond awareness – reward action. Loyalty programs that incentivise sustainable purchases align purpose with user engagement and drive behaviour change at scale.
2. Partner with verified data providers: Data is the backbone of ESG credibility. Collaborate with reputable, science-based providers to ensure environmental claims are accurate, auditable, and aligned with global standards. This also enables more precise ESG investment decisions and enhanced consumer engagement.

Challenges and opportunities

Despite its growing momentum, the path to fully sustainable payments has challenges and opportunities.

1. Interoperability and lack of coordination: A major hurdle to the widespread adoption and implementation of sustainable payment solutions lies in the lack of coordination and standardised data among the players of the payments industry. Key players, including card manufacturers and issuers, payment terminals, device producers, and cloud service providers, often operate independently of one another, utilising their own measurement methods and sustainability standards. Sustainability efforts are thus at the risk of being isolated, incomplete, or unverifiable.

2. Avoid greenwashing: As ESG takes centre stage, superficial sustainability claims can backfire. Consumers are increasingly savvy; they can— and will—spot greenwashing. The price for faking it? Reputational damage, regulatory scrutiny, and lost investor trust. To lead authentically, ESG must be rooted in transparency, backed by hard data, and validated by third parties. Anything less puts your brand—and the broader movement—at risk.

3. Collaboration: To overcome the challenges associated with sustainable payments, industry-wide partnership is essential. By working together, individual ESG efforts can contribute to a shared ecosystem of best practices, technologies, and ethical frameworks that can be used and scaled up. Harmonised standards for carbon tracking, ESG metrics, and transparent reporting can also be developed collectively to create genuine sustainable financial products with a measurable impact.