The Payments Association has released a report calling for a standardised approach to measuring carbon emissions in digital payments processing.

The report finds that while the emissions from digital payments per transaction are small, the industry's scale makes a significant impact.

The organisation said it wants a framework that enables payments firms to meaningfully measure carbon emissions in the digital payments value chain to help them build a more sustainable future.

The study suggests that research on digital payments has been "slow to get off the ground".

According to The Payments Association, Lloyds Bank took 15 months to establish initial data points due to the complexity of the payment ecosystem.

The bank identified challenges like the sheer volume of data points across physical and electronic payments and the inconsistency in measurements across different organisations.

The Association says that by understanding the environmental footprint of different payment methods, the industry can begin to "identify areas for improvement and promote greener practices."

The organisation's ESG team has outlined details a multi-faceted approach for measuring and reducing emissions in the industry, including a standardised approach to carbon emissions; industry collaboration across the value chain; the influence of regulatory development; and connecting sustainability goals with commercial viability.

"Agreement on a standard way to measure emissions when people pay or get paid will provide a useful starting point for meaningful discussion,” said Tony Craddock, director general, The Payments Association. “And it will help us decide what tools are needed to ultimately reduce carbon emissions, too.

“We believe this will contribute to increasing shareholder value, improving customer outcomes and reducing the environmental impact of payments.”

---