Nowadays, we are more aware that a carbon footprint is pretty much in everything we do. From eating, transportation, and even the way we pay for products and services, everything makes a difference and has an effect on the environment. Here’s how different payment methods such as cash, card, and cryptocurrency impact the planet.
Cash remains the commonly used payment method worldwide, despite the popularity of digital payments. According to the G4S 2018 World Cash Report, which surveyed 24 countries, 18 still used cash for more than 50% of transactions.
How sustainable are banknotes and coins? In Australia, banknotes are made from polymer, such as plastic. Using plastic makes the notes more durable and will be in circulation much longer than paper notes.
The Reserve Bank of Australia website states that polymer banknotes can be recycled into products like plumbing fittings, building components, compost bins, and other industrial and household products. The Royal Australian Mint said they assess damaged coins for recycling them into new coins.
Cash is generally a reusable item and some notes and coins are still in circulation for decades. It requires infrastructure and energy to be dispensed and moved around. A UK study showed that ATMs were the main source of carbon emissions for cash use.
Cards are mostly made from polyvinyl chloride (PVC). Around 10 billion new cards made of plastic are put into circulation annually according to Earthworks, a US plastic recycling company. Most of these cards are thrown away, adding plastic waste to landfills.
There are gift card recycling programs and biodegradable bank cards available in Australia, although there are still lots of plastic cards being produced and thrown away.
Cryptocurrency is a secured digital currency. It has only been recently that more people have become concerned with the high carbon emissions produced by cryptocurrency mining.
Cryptocurrency mining is a process to discover new crypto coins, where high powered computers solve complex mathematical equations. It’s energy-intensive and time consuming, hence the large carbon footprint.
Making payments has been made easier using a smartphone with Samsung Pay, Apple Pay, Google Pay, and other digital wallets.
Basically, a digital wallet is where you can store payment details. When you are paying for something, the information is used to electronically transfer funds to whoever you transact with.
For digital payments, the energy required to transfer data across the net can be the main emissions source. Transferring 1GB over a 4G network using a smartphone, uses around 0.15 kWh of energy. That’s the equivalent of around 120g of CO2.
More research needs to be done in terms of our payment methods and how they affect the environment. However, it doesn’t hurt to conduct ourselves properly in our day-to-day life to avoid further harm to our environment.
If you liked our “Cash, Card, or Cryptocurrency: Which Is More Earth-friendly?” and found some valuable information, check this space regularly to get more updates on crypto-backed loans and cryptocurrency.