The evolution of payment processing

We’ve come a long way since launching Splash Plastic, the UK's first prepaid card. PPS is now the number one choice for global brands and enterprises to handle their processing, issuing and prepaid programmes. Along the way we have seen payment processing evolve to meet changing consumer demands, and our sights are set firmly on the next stage of evolution. Our CEO, Ray Brash, recently spoke to 11:FS about why green finance is the future of the payments industry.

The future is green

A study across 24 countries revealed in 2021 that 58% of adults are more mindful of their impact on the environment, and 85% said they’re willing to take personal action to combat environmental and sustainability challenges. More than half (54%) of those surveyed believe it’s more important to reduce their own carbon footprint since COVID-19.

Another recent study found the vast majority of consumers value sustainability in their financial service purchases, with more than 60% looking for more sustainable finance services and products.

As society become more focussed on the environment, PPS is working to ensure it remains at the forefront of consumer needs. This means looking at our partners beyond how much money we can make or what are we going to provide: the businesses we work with are making a greener future possible through finance.

With the demand to reduce the plastic footprint generated by cards, PPS is able, through its relationships with multiple card vendors across the UK and Europe to provide recycled plastic cards made our of r-PTEG (recycled PET waste streams, such as plastic food containers and drinks bottles) as well as plastic free cards such as wood. For example, we achieve this through our partnership with Austrian-based card manufacturer exceet Card Group which offers plastic-free cards made out of alternative materials.

There are currently several PPS programmes in production at exceet Card Group AG, which will offer our customers’ end-users 100% sustainable wooden cards which are EMV-compliant and dual interface-capable, so that both contact and contactless payments are possible. As part of exceet’s commitment to sustainability it also uses 100% renewable energies (hydropower and photovoltaic) during the card production.

One such programme is with UK-based ekko , a climate-friendly debit card, app and ecosystem that empowers consumers to make a difference in the fight against climate change while engaging in routine actions like shopping and paying bills.

With every five transactions an ekko user makes, one ocean-bound plastic bottle is diverted to a recycling plant. It was the first UK fintech to join the Mastercard Priceless Planet Coalition, which aims to restore 100 million trees by 2025. With every 50 transactions, a tree is strategically planted and maintained for the first five years of its life. Users can even track their green activity and monitor their carbon footprint via an intuitive carbonmeter on the ekko app.

Our parent company Edenred has an EcoCheque product that is used by customers in Belgium to purchase eco friendly products and services.

More recently, one of our clients has started working with a partner that is able to calculate the carbon footprint of everything you buy. You can actually set yourself a carbon footprint target on what you're spending and decide to buy products based on their carbon footprint. Ultimately, consumer spending is the big lever to change in industry; everything is driven by consumer behaviour, and this is how fintech can be a driving force behind change.

The PPS origin story

This idea of a value-added proposition, in which an offering addresses more than just a transactional need, is what PPS in founded on.

We started life as a prepaid processor, and a lot of our products in the early days had non-traditional finance uses, like gift cards. We also worked in the employee benefits space to enable companies to distribute employee benefits using a card system. In other words, prepaid wasn't just about financial transactions; it was about transactions with a real value proposition.

One of the other differences about prepaid processing was it had to work in real time. That might sound odd to point out today, when so many things can be accessed in an instant. But consider that when you check your banking app on a Monday morning, you don't see any of the transactions you made over the weekend. That's because bank processors are typically running in batch or retrospective processing. Prepaid processors on the other hand always had operate in real time because there was no credit.

Why is all this relevant? Because value propositions and real-time processing are the foundations of the fintech revolution.

As consumer needs and habits have evolved, so has fintechs’ offering, shifting from commodity products to intelligent services.

Intelligent services focus on what really matters to the customer and are designed to fix specific customer problems without creating new ones. During the pandemic, consumers became used to paying how they want, in real time. The socially conscious among us are now turning to finance for more sustainable financial options that offer convenience, but not at the expense of the planet.

When we were in the gift card business, you could say we were just giving people another way to spend money, but the cards were valued more than cash, because someone had taken the time to think; about you, your interests, what matters to you.

As a society, what matters to us will evolve over time, but the idea of added value, which has its roots in our prepaid heritage, will always be at the core of what our clients do and what we believe in.