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Speeding the path to net zero through green payments innovation

The spending habits of consumers over the world have a massive impact on the environment. From discarded packaging littering our oceans to the strip mining of resources to meet the demand for electronic devices, the evidence of our consumption can be found etched in the landscape. Our spending is supported by the network of payments services providers (PSPs) who facilitate our transactions.

Deloitte commissioned a survey [1] to explore the awareness, perceptions, preferences and intentions of UK consumers. Specifically, we wanted to understand their payments preferences as well as their awareness of, and attitudes towards, a new breed of payments apps and tools that can help them track the eco-friendliness of their spending.

As we reported earlier this year only 5% of UK consumers were aware of the green PSPs available to them. Developing these themes further, and in the run-up to the always busy holiday spending period, we are returning to this analysis to shed more light on the perceived barriers to green PSP adoption, and the elements of these proposition that land best, and worst, with UK consumers.

We began by asking our survey respondents how they felt about the environmental impact of their consumption habits[2], and the extent to which they liked to feel that these habits contributed to them being more environmentally friendly. More than two-thirds (69%) agreed with this notion, which resonated particularly strongly with female respondents, three quarters of whom (75%) looked for such a connection (see Figure 1 below). Interestingly, older customers also wanted to feel this connection between what they spend and the impact on the environment, with 72% of over-55s agreeing, compared with only 60% of 18-24s.

Figure 1: Sentiment of survey respondents to the following statement: “I like to feel that with my consumption habits, I can contribute to being more environmentally friendly”

Source: YouGov, Deloitte analysis, the analysis excludes those answering “Don’t know”

Having set the baseline, we also wanted to understand what barriers these consumers might believe were holding them back from leading an eco-friendlier lifestyle. The results were intriguing.

Dashed on the rocks of good intentions

Our survey found that there was a significant gap between the proportion of consumers who said they care about the environment, and the share willing to follow-through on their good intentions.

More than two-thirds (68%) of those surveyed said they would “feel happy and satisfied if my PSP offers environmentally friendly products and services”. A further 53% also told us they would like their PSP to help them be more environmentally friendly in their daily life. However, when focusing in on the carbon footprint of individuals, we found far less enthusiasm for the types of help that green PSPs currently offer.

Fewer than one-third (32%) declared they would be “happy to share additional personal/behavioural data, without additional effort, with my PSP, if it improved the level of insight on my carbon footprint”, while fewer than half (45%) said they “would recommend my PSP to family, friends and/or other individuals if it offers green products and services”. Importantly, a further one-third disagreed with the statement, with less than two-fifths (38%) telling us they would be willing to “consider changing my PSP based on its eco-credentials”. See Figure 2 below.

While some of the intent signalled here is undeniably positive, the jury is out when it comes to the extent to which this might manifest as action, particularly when compared with intent and action in other areas of banking such as personal current account switching.

Figure 2: Comparison of the sentiment of survey respondents to the following five statements

Source: YouGov, Deloitte analysis

So, what could account for the gap between perception and intention?

Mind the aspiration gap

While one-third of respondents to our survey (33%) saw no impediment to leading a more environmentally friendly lifestyle, for the remaining majority the challenge is three-fold. More than one-third (37%) called out the cost and limited range of eco-friendly products as a key barrier, while for almost one-fifth (18%) the challenge turned on the convenience of making greener choices and scarcity of suitable products. A further 18% said they would struggle to free themselves of old habits.

Of course, PSPs – green or otherwise – have little control over the cost, convenience, and availability of eco-friendly products. However, when it comes to helping consumers to form new habits, they may have more of an opportunity to add value. The trick however seems to be in choosing the right ways to engage.

No shame on you

So, what help would consumers like? Interestingly only a minority (46%) wanted visibility of their individual carbon footprint. In this instance, both sexes were broadly balanced in this view, with 43% of men and 48% of women wanting to know. However, we saw more variation by age brackets, with 56% of 25-34s welcoming this information versus only 39% of over-55s.

As consumers’ minds move from abstract eco-ideals to more practical considerations around the specific eco-friendliness of their own behaviour, we see enthusiasm ebbing in other dimensions too. When offered real-time prompts and alerts concerning the carbon intensity of their purchases, only around one-third (38%) were in favour, while almost half (48%) were against it. Again, preferences change with age, with 49% of 18-24s in favour versus only 30% of over-55s. Likewise, when it came to setting a “maximum carbon limit” for their purchases with their PSP, only 30% were in favour. Opposition was relatively uniform on this one, with 35% of younger customers in favour versus 26% of over-55s.

While the concepts of monitoring and judgement may be driving consumers’ concern, it may be that the lack of awareness noted in our earlier article was a factor too. Not knowing which providers deliver eco-friendly services may also indicate a lack of awareness around how innovations – such as self-imposed spending limits based on carbon intensity – might work. Here then may be an opportunity for the industry to deliver comfort to nervous consumers through awareness-raising initiatives, eliminating misconceptions, and stimulating greater interest in green payments.

Elsewhere, this could also be explained by fear of embarrassment or guilt, two emotions that stem from a perceived sense of personal wrongdoing. The self-reflection prompted by a nagging alert or hitting a carbon limit could trigger a very human threat response, suggesting that it may be counterproductive for PSPs to push these too hard with consumers who may rather to be eased gently into a future of greener consumption.

Good habits

The change will be easier to effect if eco-friendly behaviours are habitual, requiring less mental effort to action. And to form a habit, behaviours must be repeated. Every habit – good or bad – begins with a psychological “loop" comprising three components. First, there is the reminder, clicking the brain into auto-pilot so the behaviour in question can be executed. Next, there is the routine, the behaviour itself, followed by the reward, providing positive stimulus to reinforce the behaviour. Hence, to form a new eco-friendly habit, each of these three components should be addressed – the reminder must be clear and obvious, the routine must be easy to perform, and the reward must be satisfying.

Taking a cue from food packaging, which nowadays prominently displays its nutritional contents, carbon labelling applied to individual products (e.g., food, clothing) and services (e.g., travel) could help to both raise awareness and lower the barriers around engaging with our individual carbon data. PSPs can make habits easier too, through simple contextual changes. For example, more or less environmentally friendly purchases could be made more conspicuous in the context of the app, delivering specific, timely information to the consumer. Likewise, by incorporating incentives and rewards, PSPs can help to reinforce eco-friendlier choices. Importantly, a key area where the majority of survey respondents (62%) agreed was their desire to be rewarded for doing the right thing, with discounts, offers, and congratulatory messages receiving strong support, particularly amongst 18-24s, 73% of whom were in favour, compared to 55% of over-55s.

Existing research shows that extrinsic incentives (e.g., rebates, tiered pricing, cash) can encourage consumers to adopt and maintain sustainable behaviours. For instance, as Chemero, McKinney et al evidence in their recent draft paper, extrinsic incentives can result in new habit formation, as their effect is sustained even after the reward itself has been removed.[3] Likewise, intrinsic incentives (i.e., those that make us feel a certain way) are also important when it comes to forging lasting habits, opening the door to the same sort of gamification and positive reinforcement that Apple has achieved through its “fitness rings”.

‘To do’ list for PSPs

Over these two articles, we have dug into how low levels of awareness and the gap between the aspirations of shoppers when it comes to living greener through their consumption habits and the reality of being faced with their carbon footprint, is failing to drive enthusiasm for green PSPs. With 45% of survey respondents saying they are willing to recommend a PSP based on its green credentials, 38% willing to consider switching to one, and 32% willing to share the data needed to make them tick, this nascent sector of the payments industry faces its future with some positive trends. Nevertheless, intent must be converted into action for any of this to deliver a positive impact – for customers, providers, and the wider environment.

We believe there are some steps that PSPs can take to positively bridge their users to the eco-friendlier financial futures they imagine for themselves. These include:

Raising awareness of the value proposition of green PSPs with consumers to not only raise their profile, but also to potentially assuage the concerns of a largely uninformed consumer base.

Majoring on promoting reliable data to feed back to the customer around their spending habits, free of judgement and measurement. This will accustom users to the green PSP experience and can be backed with articles and insights that help promote greener choices.

The gamification of payments (e.g., in terms of driving a footprint score or relative rankings) could be hived off to sub-brands targeting specific demographics and/or presented as togglable options in-app, giving customers the freedom to choose how they want their data to be served to them, and “change lanes” into a more data intensive experience at a pace that suits them.

Finally, by tailoring data and experiences to the needs of different users may also boost the relatively low intent to recommend noted in the survey providing a positive outcome for the PSPs and the environment at large.

[1] Deloitte commissioned YouGov to survey 2,000+ UK consumers using digital payment methods with a set of questions around both the intent and the action of consumers as far as sustainability is concerned when using digital payments. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2094 adults. Fieldwork was undertaken between 4th - 5th November 2021. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

[2] Question: To what extent do you agree with the following statement? “I like to feel that with my consumption habits, I can contribute to being more environmentally friendly”. 69% of respondents agreed with the statement, comprising 17% who “strongly agreed” and 52% who “tended to agree”.

[3] See “Habit, Ontology, and Embodied Cognition Without Borders, Draft Chapter for Caruana and Testa (eds.), Habit: Pragmatist Approaches from Cognitive Neurosciences to Social Sciences” Tony Chemero, Jonathan McKinney, and Maki Sato, link.


The Authors would like to thank Dr. Alexandra Dobra-Kiel for her contribution to this research.

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