Payments is Helping Save the World

Fintechs are joining the fray to fight global warming

5 min readJan 19, 2021
Photo by Li-An Lim on Unsplash

There’s no need to rehash the catastrophic impact that climate change will have (and currently has) on our planet. Nor do I feel the need to list facts that highlight the existence of human-driven global warming, nor statistics that showcase the magnitude of damage we have on our planet.

I firmly believe that global warming is the most pressing, and most existentially threatening issue of our lifetime, and I hope that everyone reading this will agree with that statement.

As the Doomsday Clock — a symbolic clock that denotes humanity’s remaining time left — ticks 100 seconds to midnight, how can we reduce greenhouse emissions and preserve the existence of our species?

Even though some scientists are pointing out the near-insurmountable tasks we have at reaching out target climate, I hope that, in my lifetime, we can come together and agree on a plan of action to mitigate our damage on the environment — both through multilateral public policy and through private-sector innovations.

The payments industry has joined in the fight against global warming

It’s been inspiring to see the private sector drive progress against climate change: Elon Musk with Tesla and his grand plan for a multi-planetary human race, Memphis Meats and their vision for environmentally-conscious meat cultivation, SunPower and many others for their alternative energy solutions.

It’s already great to see that payments is also joining in the fight against global warming — an industry that has little direct relation with greenhouse gas emission.

It’s a sign that every company — in any industry — has to do its part to help humanity in this fight.

As governments collaborate on policy, companies must work within the framework of capitalism to make it economically viable and attractive to reduce greenhouse gases.

Initiative #1: Per-Payment Donations

The first, and main, lever for climate change impact for payments companies is enabling per-payment donations — micro donations to green organizations on a per-transaction basis.

On October 2020, Stripe launched Stripe Climate — a product that allows Stripe merchants to set up automatic donations to carbon reduction companies.

Source image via Stripe Climate

These donations will be added to a pot that Stripe itself contributes $1 million every year, ensuring that Stripe and Stripe’s customers are working together to fight climate change.

Stripe Climate is an easy-to-use API that automatically sets up donation — made as a percentage of each transaction that Stripe processes for its customers. This low-lift solution allows companies to donate or invest into environmental organizations without the hassle coordinating donations or vetting legitimate companies.

Stripe, like with payments, is offering easy and frictionless way to contribute to combat climate change

So far, the donation recipients are green-tech companies selected by Stripe. Stripe calls them “earthshots” — innovations that initially need a lot of capital to get started and lack the initial economics to run as a for-profit business, but they can offer a step-change positive impact on combatting greenhouse gas emissions compared to tactics that exist today.

Stripe first round of earthshots are carbon removal schemes, believing that it’s not enough to reduce greenhouse emissions, but we need to actively remove carbon from our air in order to limit the global temperature increase.

  • CarbonCure captures carbon dioxide in the air and embeds it into concrete
  • Climeworks constructs manufacturing plants that remove carbon from air
  • Project Vesta plans to add a mineral called olivine into beaches. When olivine is broken down by waves, a chemical reaction occurs that captures carbon dioxide and stores it in limestone on the ocean floor.
  • Charm Industrial is converting waste into bio-fuel

More recipients are to be announced, and the list will be refined over time.

Stripe believes that carbon removal is needed to achieve our target climate. Source via Stripe.

Initiative #2: Carbon Offsetting

In addition to donations, payments companies are building carbon offset programs — to ensure carbon neutrality for themselves and their customers.

Shopify’s Shop App is a B2C product that helps aggregate SKUs, payment, and delivery tracking across all Shopify merchants for shoppers.

Shop App launched a Carbon Offset program that offsets delivery emissions for customers. Shopify calculates the emissions of a delivery and offsets the emissions through tree protection and conservation efforts.

Image via Shop App

In addition to Shopify, the XRP Ledger — a cryptocurrency and blockchain — has a Carbon Offset proposal that will collaborate with NGOs to plant trees to offset energy consumption from using the XRP Ledger.

Currently, the XRP Ledger also lets you calculate the carbon emission from various payment methods — fiat and crypto.

Initiative #3: Green Infrastructure

Lastly, companies are moving toward running their payments infrastructure fully using renewal energy sources.

It has long been known in the crypto industry that Proof of Work (PoW) consensus is a energy-intensive way of confirming a transaction.

Luckily, nearly 80% of crypto miners are using renewal energy sources such as hydro, wind, and power. Sadly, only ~40% of the total energy consumed by PoW miners comes from renewal energy sources.

It’s imperative that the crypto industry works towards lowering energy consumption and moving toward a fully green energy model.

ETH2, the next iteration of Ethereum, plans to drastically reduce energy consumption by switching to a Proof of Stake consensus model.

Ripple, a blockchain cross-border payments company, has publicly pledged to achieve carbon neutrality by 2030, and is leading an initiative called EW Zero that allows any blockchain to use renewal energy sources for their infrastructure and operations.




Product manager, DAO contributor, crypto enthusiast