[Dave Birch] Payments, just like every other business, are acquiring a green tinge as the marketing folk get to grips with the low carbon economy. There have been some efforts before — some of you may remember that “Visa Swap” earlier in the year — and I’m sure there will be more of these (rather limited) initiatives to come. It’s not transparently obvious to me that this sort of thing makes much of a difference to consumer behaviour but I’m sure every little helps. Consumer research from PricewaterhouseCoopers found that more than half of respondents would be likely to replace their existing credit card with a ‘green’ credit card if it helped them tackle their carbon footprint and two in five said they would give up an existing loyalty programme or cash reward card in favour of a green alternative. I know consumers’ revealed preferences may be at variance with their environmental aspirations but you can see the trend building. Surely, a truly green credit card would be one that allowed you to buy organic tomatoes but not a flight to Spain. We haven’t got that far yet, but Barclays has launched a carbon-offset corporate card. Barclaycard Business manages the process on behalf of corporate customers by providing them with commission-free access to the Certified Emission Reduction Market via Barclays Capital’s Emissions Trading Desk. So Barclaycard tell you how much your employees have been spending on air travel and then you can buy carbon offsets to match them and assuage your environmental guilt at allowing them to fly so much.

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There are wider industry initiatives as well. In the U.S., NACHA has formed a “green coalition” (with, amongst others, Bank of America, CheckFree, Citibank, Wells Fargo and so on) to educate consumers about the positive environmental impacts of choosing e-bills, e-statements and e-payments over the paper versions and I’m happy to try and find ways to spread their message. Generally speaking, I don’t want paper anything and the sooner shops begin sending receipts to my phone or my e-mail account the better, so being green by going with the grain sounds good. Again in the U.S., I think it is a very good sign that the Fed was prepared to reconsider how instructions such as Regulation E (and presumably in the future Regulation Z as well) should be reconstituted for the e-payments age. Earlier in the year, they announced an exception for transactions of $15 or less from Regulation E’s requirement that paper receipts be made available to consumers for transactions initiated at an electronic terminal.

NFC phones could make us even greener, because phones could eliminate paper receipts for many transactions, not just the ones under $15. At the moment, NFC phones simply emulate cards, and that makes sense because banks and operators want to roll them out without needing changes to the existing infrastructure. Looking forward, though, that’s not enough to open up the POS transaction to the kind of value-adding services that are being envisaged. A simple change to the payment protocol could flag to the POS that it’s a phone not a card and therefore — as an obvious example — can receive a receipt electronically. It shouldn’t take much to devise an appropriate XML coding (there may be a suitable one buried in the OTP standard somewhere).

This might be an interesting angle to try in one of the current set of NFC pilots. Since a variety of pilots have already established that using NFC phones as “cards” seems to work, perhaps some of the bank and retailers could consider have looking at this in one of the trials getting underway. There are quite a few too choose from. One the recently announced trials is the “Payez Mobile” one involving 1,000 people in Strasbourg and Caen. This is worth following as it involves all three French mobile operators, six major banks, three handset suppliers (Motorola, LG and Sagem) and both Visa and MasterCard, so it should provide some useful lessons about interoperability. I was surprised by this comment in the announcement though. Jérôme Sion, director for mobile contactless activities at Gemalto (and a very nice chap) said:

I don’t think it will replace cash… Just as checks didn’t replace cash, and bank cards didn’t replace checks, you will still have cash along with the contactless phone.

But bank cards have replaced cheques in the U.K., just not in France, so we are already greener than they are.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

1 comment

  1. Interesting bit about Barclaycard and carbon footprinting. I just spoke with AmEx Monday about that. They are also doing green benchmarking for commercial customers.

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