Worldline, a global leader in payment services, has today published a landmark life cycle analysis study conducted in Belgium which shows the huge potential of digital payments to decarbonise payment systems. 

The report confirms that compared with cash payments, in-store digital payments produce significantly lower levels of CO2-equivalent (CO2e) emissions. The report also identifies industry-wide levers to further decarbonise digital payments, starting with reducing emissions to under 1g of CO2e per transaction.

Using the life cycle analysis (LCA) methodology, the report, which was prepared by Patrice Geoffron, Professor of Economics at Paris Dauphine-PSL University, seeks to quantify and compare the CO2e emissions related to the different payment methods (cash, cards, phones) for in-store and online transactions in Belgium. It finds that an in-store cash transaction currently emits 14% more CO2e emissions than an in-store digital payment transaction. An in-store cash payment generates 2.8g of CO2e emissions, compared with 2.45g of CO2e for an in-store digital payment, even without taking into account the individual transport activity when an individual sources cash.

If supply and sourcing are factored in when a person withdraws cash, based on a single cash withdrawal providing on average the cash for 7 individual payments, the CO2e emissions from a cash payment are 15 times higher (at 36.8g of CO2e) than the emissions from an in-store digital payment.

Based on an analysis of transactions in the Belgian market, where Worldline is a major payments processor, the study considered the entire payment ecosystem, including banks, network providers and terminal manufacturers. It aimed to identify potential company-specific or industry-wide initiatives which could contribute to further reduce the carbon footprint of a payment transaction, as part of the payment industry’s contribution to the Fit for 55 ambition of the European Green Deal. These include low-cost measures to optimise in-store digital payments, such as eliminating paper receipts, virtualising cards, and using phone-to-phone payments, which could cut CO2e emissions from digital payments by 70% to 0.74g per transaction, just over a quarter the level of emissions from a cash transaction.

The report also estimates the CO2e emissions of online payment transactions at 3g and proposes measures to reduce their carbon footprint by up to 93%, primarily through the use of smartphones.