The Environmental Impact of Digital vs. Cash Payments in Europe – Independently Reviewed LCA
Can paying digitally instead of cash reduce the environmental footprint of the payment sector? The European Digital Payments Industry Alliance (EDPIA) published the Oxford Economics white paper “The environmental impact of digital over cash payments in Europe” to answer exactly this question. The study has been The study has been critically reviewed by an independent panel led by Niels Jungbluth, CEO of ESU-services – a quality assurance step that makes LCA results credible, comparable and ready for public debate and policymaking.
Why This Study Matters
With the study, EDPIA wants to contribute to the public debate on how the payment value chain can actively take part in achieving a low-carbon economy – and showcase which areas are likely to deliver the best decarbonization potentials. Because such claims influence policy and public perception, the underlying Life Cycle Assessments (LCAs) must withstand independent scientific scrutiny. This is where critical review according to ISO 14040 and ISO 14044 comes in.
What Oxford Economics Investigated
Oxford Economics based the white paper on two Life Cycle Assessments (LCAs) to measure the environmental impact of both cash and digital payments at point of sale in 2022. The analysis covered three Eurozone countries with different digital payment maturity levels:
- Finland – the most advanced digital payment market of the three
- Germany – a mid-level market
- Italy – the least digitally mature market of the three
The LCAs were carried out cradle-to-grave, following the International Organization for Standardization (ISO) guidelines, and analysed the various processes and operations involved in cash and non-cash payments.
Key Findings of the Study
In 17 out of 18 impact categories analysed, digital payment has a lower environmental impact than cash. The differences are considerable:
- A cash payment emits as much CO2 as 2.1 digital payments in Italy, 5.9 in Germany, and 23.5 in Finland.
- An average consumer who chose to pay only digitally would save the annual CO2 equivalent of 37 single-use plastic bags in Italy, 49 in Germany, and 74 in Finland.
- The impact varies with the country’s digital payment infrastructure: Finland, with the lowest cash usage, needs very few ATMs – and the few that remain require longer travel distances, which reduces the overall efficiency of the cash system.
Based on the findings, EDPIA members Aircash, Nexi, Teya, Viva Wallet, and Worldline developed a roadmap of initial recommendations for policymakers and industry aimed at significantly reducing the carbon footprint of the payment sector.
The Role of the Critical Review Panel
Reliability and trust are essential when LCA results enter the public and political arena. The review panel, chaired by Niels Jungbluth, examined whether the LCA studies comply with the requirements of ISO 14040 and ISO 14044 – covering goal and scope definition, life cycle inventory data, impact assessment, and the interpretation of results. The panel’s independent assessment confirms the methodological robustness of the study and strengthens the credibility of its conclusions for policymakers, industry, and the general public.
With more than 30 years of LCA experience and over 140 reviews, verifications and validations conducted, ESU-services is a trusted partner for independent quality assurance of LCA studies, carbon footprints, and Environmental Product Declarations (EPDs).
Download Documents
- EDPIA ESG policy recommendations – June 2024 (PDF)
- EDPIA infographic LCA (PDF)
- “The environmental impact of digital over cash payments in Europe” – Oxford Economics for EDPIA, April 2024 (PDF)
- EDPIA press release on the Oxford Economics study (PDF)
Your LCA Study Needs a Review?
Planning an LCA or carbon footprint study that will be published or used in political communication? An independent critical review protects you against methodological errors and green-washing accusations before publication. Contact us for a non-binding offer – we review studies according to ISO 14040, ISO 14044, ISO 14067, the Greenhouse Gas Protocol, and EN 15804, as individual review or as a panel with chair.
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