Digital payments have a significantly smaller environmental impact compared to cash transactions, according to a report by the European Digital Payments Industry Alliance (EDPIA).

The study, conducted by Oxford Economics, examined the environmental impact of payments in three Eurozone countries, Italy, Germany, and Finland, with each representing different levels of digital payment maturity.

The research revealed that in 17 out of 18 categories studied, digital payments have a smaller environmental footprint than cash.

For instance, a single cash transaction emits as much carbon dioxide as 2.1 digital payments in Italy, 5.9 in Germany, and 23.5 in Finland.

This means that if an average consumer chose to make all their payments digitally for a year, they would save the equivalent CO2 of 37 single-use plastic bags in Italy, 49 in Germany, and 74 in Finland.

The environmental impact varies depending on the development of the country’s digital payment infrastructure.

Finland, for example, has the most advanced system among the three countries, with the lowest cash usage.

This results in a reduced need for cash infrastructure, fewer ATMs, and longer distances to access them.

Johanna Neuhoff, Associate Director for Economic Consulting Continental Europe at Oxford Economics, and co-author of the study, said that the researchers involved “have been very vigilant in the analyses that have led to the conclusions of the study not to underestimate the elements that compose either a digital payment or cash payment”.

“We have been pleased to contribute to the LCAs and have with great interest read the results that we are launching today,” commented Piero Crivellaro, Chair of the EDPIA Working Group and Corporate Group Head of Public Affairs at Nexi.

“We are proud to assess the positive contribution of digital payments to the environment, and at the same time we know that the industry can strive to do even better environmentally,” he stated.

“We look forward to continuing our efforts and engaging with the payment value chain to share knowledge and build partnerships for a sustainable future,” Crivellaro added.

It should be noted that based on the findings, EDPIA members Aircash, Nexi, Teya, Viva Wallet, and Worldline have worked on a roadmap of initial recommendations for policymakers and industry with the aim of significantly reducing the carbon footprint of the payment sector.

“Paying digitally is a climate action. The quantitative evidence of today underlines the potential of digital payments to bolster the advancement of the twin transition,” said Emoke Peter, Chair of the ESG Task Force of EDPIA and Head of European Public and Regulatory Affairs of Worldline.

“The EU needs to set forth ambitious new objectives for the widespread adoption of digital payments across European society, delivering tangible benefits to both society and the environment,” Peter added.

“As we move forward to a new legislative term, we remain committed to leveraging these insights and collaborating with policymakers and industry partners to drive positive environmental outcomes in the payment space,” Peter concluded.