The Environmental Impact of Digital Over Cash Payments in Europe
Commissioned by European Digital Payments Industry Alliance
On behalf of the European Digital Payment Industry Alliance (EDPIA), our report on “The Environmental Impact of Digital over Cash Payments in Europe” seeks to evaluate carbon emissions across payment systems at point of sales.
Businesses and governments are becoming more and more focused on mitigating the effects of climate change through processes and policies, and the payment sector is no exception. As digital payments become more prevalent—with the number of non-cash payments doubling from 21% in 2016 to 41% in 2022 in the euro-area alone according to the European Central Bank—there has been a growing need to understand the environmental effects of these shifting preferences. Although some evidence indicates that digital payments have a smaller environmental footprint than cash payments, there has not been a comparative lifecycle assessment done between the two of them. In addition, given large differences across geographies, the actual impacts of payment methods at points of sales (POS) can differ widely from country to country.
To examine this issue, this study utilises a Life-Cycle Assessment (LCA) following the International Organization for Standardization (ISO) guidelines. A method Oxford Economics has added to its toolkit, the LCA is a holistic approach that appraises environmental impacts across stages of a product lifecycle on a variety of categories. Which, in this case, includes a total of different 18 categories including for example, global warming potential, mineral resource scarcity, and ionizing radiation. This cradle-to-grave approach is used for three purposes:
- Firstly, to consider the separate processes of cash and non-cash payments in order to isolate the environmental “hotspots” and their respective impacts.
- Secondly, to understand the processes in three countries with different rates of payment adoption—Italy, Germany, and Finland—for comprehensive results.
- Thirdly, to compare the environmental impact of cash and non-cash payments at point of sales in the different impact categories.
To download the report that has been approved by an expert panel review, please click the button below.
The experts behind the research
Our Economic Consulting team are world leaders in quantitative economic analysis, working with clients around the globe and across sectors to build models, forecast markets and evaluate interventions using state-of-the art techniques. The lead consultants on this project were:
Jan Sun
Senior Economist
Hannah Zick
Economist
Johanna Neuhoff
Associate Director Of Consulting
Tags:
Recent related reports
Key take-aways from COP30
COP 30’s agenda had placed a strong emphasis on countries’ implementation of their emissions reduction target and, for the first time, several workstreams included discussions on unilateral trade policies.
Find Out More
Flooding risks diverge across UK cities, sectors and economies
Climate-linked flooding is becoming more severe, reshaping risks for UK cities, real estate, and local economies. Which areas face the greatest impact—and why?
Find Out More
COP 30 in focus: How to stay the course on the path to Net Zero
EMDEs are projected to account for 70% of global CO₂ emissions by 2050, making accelerated emissions reductions in these economies essential. Yet gaps in AE leadership—such as US policy rollbacks and insufficient climate finance—risk slowing the global transition.
Find Out More
Advanced economy leadership is key to the low-carbon transition
We modelled how advanced-economy leadership in innovation and finance could accelerate a global low-carbon transition.
Find Out More
