Your Friday fix for global fintech and payments news
This week’s round up of industry news takes a look into sustainable cards in Europe, how UK consumers are now more willing to try different payment methods when shopping online, and lastly whether Buy Now Pay Later schemes could break into the Islamic Banking market.
Our weekly round-up brings you a dose of some of the biggest news announcements from the past seven days so you can keep an eye on all that’s shaping our world this week.
- Santander accelerates roll out of eco-friendly cards
- One in three Brits confident trying new payment methods
- Untapped Potential to Combine BNPL and Islamic Finance
Santander has become the latest bank to announce that they are going green with their payment cards, switching the age old plastic for recycled PVC and corn-based polylactic cards. Not only are the materials sustainable and recyclable, but they also require less energy to produce.
By 2025, Santander aims to have all debit, credit and prepaid cards in Europe made from sustainable materials, which will save more than 1,000 tonnes of CO2 each year.
Last August, we wrote about whether sustainable plastic cards are a viable solution to environmental issues . With around 3.5 million tonnes of plastic and other solid waste per day across the globe, every little certainly helps.
According to statistics from American Express and YouGov, around a third of Brits feel confident to try new online payment methods.
Surveying 1,013 UK consumers who are familiar with online banking and online shopping, 20% of respondents said that the pandemic has made them more willing to try different payment options when it comes to shopping online. Almost two-thirds of respondents said that they intend to continue to buy online even when restrictions are lifted and high street retailers reopen.
Director of American Express’s Pay with Bank transfer division, Holly Coventry said: “As e-commerce will continue to be critical for many businesses, they need to make sure they’re staying on top of the latest payments tech. Consumer expectations are higher than ever, so offering a fast and frictionless, but highly secure, payment option is key to long-term sales success.”
The payments industry has seen the massive success of Buy Now Pay Later (BNPL) providers, with many consumers around the globe now relying on the service. Global management and technology consultancy, Capco has now released a paper exploring the opportunities for a market that BNPL providers have not yet managed to break into: Islamic Finance.
The leaders in the BNPL market are not currently Shariah compliant due to the charging of interest and the missing Aqd (Islamic contract) between the BNPL provider and the consumer.
Mohsin Khan, Principal Consultant, Islamic Finance Capability Lead at Capco, said: “The UK’s Woolard Review urges the regulation of BNPL services to keep consumers protected and treated fairly and highlights questions around debt and creditworthiness. Introducing Shariah-compliant offerings would solve many of these issues, as the focus of Islamic Finance BNPL solutions would be on providing interest-free credit, with reasonable charges and an emphasis on mutual benefit rather than any potential exploitation of customers through late payment and other fees. This is something that would potentially appeal to the broader population too – an ethical BNPL service built around fair trading and the wellbeing of the wider community.