Business

6 innovative ways that fintech is making the world greener

How are fintechs using innovation to make our planet more sustainable?

BY 19.11.2020 4 minutes read

Money, we’re told, is the root of all evil. And on the face of it – with big corporations frequently making the headlines with stories of environmental damage and tax avoidance – it might at face value appear to be true.

But only at face value. The fact is, organizations of every size and shape in every industry sector are under immense pressure to ensure that their operations are ecologically sound, and the fintech sector is no exception.

In fact, it’s in fintech where some of the most truly innovative advances are being made. Here are 6 examples.

Goodbye to the plastic

The words ‘credit cards’ and ‘plastic’ have been synonymous for decades; but perhaps not for much longer. Spanish bank CaixaBank recently launched one of the world’s first biodegradable payment cards. Instead of using regular plastic, which is hard to recycle, Caixabank opted for a new material, made up of corn starch and biomass, and it cuts the carbon footprint caused by manufacturing cards in half.

Building on that, Caixabank are also offering customers the ability to recycle their plastic cards in its branches. With over 17 million cards in Spain alone, the bank holds nearly 25% of the total market share; this has essentially changed a quarter of the market overnight.

Tap to plant

Many businesses are investing in tree planting initiatives as part of their carbon programs. Amsterdam-based challenger bank Bunq is extending the participation to its customers with its pay to plant a tree program. “Since the successful launch of the bunq Green Card, a metal card that plants a tree for every €100 spent, bunq users have offset a global reduction of CO2 emissions by 12.3 million kg, which translates into over 13,000 flights from Paris to New York.”

Making this initiative part of people’s daily lives has been the key to its success, and it’s captured the hearts of its customers – when the company created a limited “Founders Edition” card, it sold out almost immediately.

From trees to the rainforest

Taking the idea to the next level, Treecard’s focus is exactly as the name suggests – 80% of its profits go towards reforestation, with no greenwashing. With each card actually made from wood – and 300,000 cards being made from each tree – demand is high, resulting in a referral program that helps bump applicants up the queue.

“Each card features a unique wood grain and is made from sustainably sourced FSC cherry wood. And when you pay using TreeCard™, the store pays us a small transaction fee which we use to fund reforestation projects.”

A dip in the chips

Plastic isn’t the only ecologically unsound element of payment cards. Production of the semiconductor chips used in the majority of cards is hugely polluting – a typical semiconductor factory will use 20 million gallons of water a month which, along with a long list of toxic chemicals, has to be disposed of as waste.

Paris-based technology company Idemia saw the simple – and obvious – solution: develop smaller payment chips, as well as more eco-friendly cards.

“The company started with the chip design. The smaller the chip, the less polluting it is. So, Idemia’s self-designed chips are small, and instead of being wrapped in plastic, they’re wrapped in recycled PVC.” In the next few years, the card itself will be fully biodegradable. Idemia is also putting together plans to make the personalization and packaging of cards more sustainable to reduce excess inventory of packages and cards.

The decline of cash

If you have ever taken out cash or paid at a cash register, you have most likely seen the logo of Diebold Nixdorf, a worldwide producer of financial and retail technology. That may soon change following a company-wide commitment to take action for sustainability: “Large and oversized branches no longer fit the model in most circumstances, but that doesn’t mean bankers should abandon them altogether.”

In the wake of the 2020 pandemic, maintaining a presence in the physical world has become complicated – but people still need access to cash. Diebold Nixdorf has suggested optimizing the footprint of physical branches with new ATM solutions, where “a modern self-service terminal with enhanced functionality can take the place of a traditional teller, providing everything from cash in/cash out to bill payments, money transfers and other complex transactions.”

These terminals also incorporate an enclosed loop cycle where the stock of cash is being replenished by customers, reducing the need for the supply chain that’s normally needed to stock up ATMs – resulting in a carbon saving of 4 million kg over the network’s lifetime.

Doconomy’s carbon calculator

Calculating the carbon impact of anything from a purchase to a business can be a stumbling block for many – something that Swedish fintech Doconomy is setting out to change.

Doconomy has enjoyed massive success in Sweden with its sustainable credit card, which restricts your spending according to the carbon footprint of your purchases – an innovation created a whole new market almost overnight. It was an idea that was too good to stay in Sweden alone, resulting in Doconomy looking into how it would expand towards a global footprint.

This is when Doconomy approached us at Vacuumlabs to help them build the 2030 Calculator, which helps brands around the world and their customers quantify the impact of their shopping decisions on the world.

Doconomy already has the Åland Index live in the seven countries to calculate the carbon footprint impact on transaction, with the 2030 Calculator, a simple online calculator that will process your production data and show you how your choices impact the world around you, calculations are also made on the product level. It’s a precise idea, one that has the power to deliver real change – and you can learn more about how we built the calculator in our latest case study or listen to our interview with the founders of Doconomy.

What’s your role in all this?

It’s worth remembering that every time you tap to pay, you’re making an imprint on the environment, and the future. But with more fintechs leading on green initiatives, there’s increasingly a shift away from choosing to help to simply choosing your approach.

And if you have a project that can contribute to a better tomorrow and you could use some help and guidance with it, contact us at Vacuumlabs. We might be able to help you make an impact like we helped Doconomy and many other companies.

User image for Kristina Vavrova
Community and speakers coordinator

About Vacuumlabs

Vacuumlabs provides teams of flexible software engineers and designers with years of experience building fintech, online marketplaces, and digital products. Every step of the way, Vacuumlabs experts collaborate with clients, so that they can move fast, learn and iterate as they build world-class products together.

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