Citizens Financial Group got a very favorable stock bump after unveiling its new eco-friendly Mastercard debit and ATM card this week. Given the existing pressures toward more environmentally-friendly cards, this could be the start of a larger trend.
The card is made from 90% recycled PVC and carries the Mastercard sustainable card badge, reflecting its lower environmental impact in terms of energy, material consumption, and carbon footprint.
The response from Wall Street was immediate. Citizens Financial Group’s stock jumped 7.61% in a single day, ending a two-day losing streak.
Mastercard itself plans to produce all of its plastic payment cards using sustainable materials by 2028. This would include not just recycled PVC plastic as in the Citizens Financial card, but substances like Polylactic Acid and recycled Polyethylene terephthalate plastic as well.
New Modes of Eco-Friendly Cards
The Citizens Financial card is the latest in a series of moves designed to make plastic less of a factor in the cards we carry. California came very close to banning plastic retail gift cards this year, simply to cut down on the environmental impact of single-use plastic.
Governor Gavin Newsom vetoed the measure over concerns about how it would affect small businesses, but that type of legislation is likely to come back at some point as concern for the environment grows.
The trend could possibly make even more of an impact on prepaid cards—which are single use—than on long-term credit cards. Future prepaid cards could be constructed out of eco-friendly recycled materials or even cardboard, depending on local laws and trends. If it becomes unrealistic for issuers to produce different stock of gift cards for different states, that could accelerate the move to digital cards.
“Debit and credit card products realize the benefit of being ahead of potential legislation on environmental topics,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “In this way, they’re much like other card stock products in gift carding or even access cards, hotel keys, and such. Issuers also understand that the option creates goodwill among customers who value eco-friendly products, providing residual benefits in customer acquisition and retention.”