Quantifying the Environmental Impact of Payment Systems: Part 1

Every time we get paid or buy something, we inevitably face the decision of how to pay. But it’s not always clear how those decisions affect the environment. One of this year’s most exciting initiatives at Ripple is our commitment to be carbon net-zero by 2030.

As we set out to evaluate our own carbon footprint, we also wanted to understand the environmental impact of other payment modes such as other cryptocurrencies, credit cards, and cash. It’s imperative that as consumers and community members, we have the information to make environmentally conscious decisions about how we pay.

Elenabsl/Shutterstock. Design: Ashley Britton/SheKnows. 

The payment ecosystem is vast and extremely diverse. To narrow down scope, we focus on a few payment modes broadly adopted around the world.

  • Credit cards: Visa and Mastercard are the largest credit card networks globally. Although both companies have achieved 100% renewable energy since 2019, their prior levels of carbon emissions could help us understand the sustainability implications of card networks in general.
  • Cryptocurrencies: Bitcoin and Ethereum have the largest market caps and trading volumes. Differences in their carbon emissions could shed light on the sustainability of various blockchain technological and operational architectures.
  • Paper money: In over 30% of countries, cash-in-circulation (CIC) has experienced faster growth than non-cash payment methods in 2019. We will deep dive into the dollar to provide a baseline estimate for paper money’s environmental impact.

It’s worth noting that the evaluation of XRP carbon footprint was done externally by Watershed, a tech company that helps companies build climate programs, and we won’t cover that in this blog post.

Before moving onto research, we should first define the objective metrics to calculate. Some past research has shown network-level estimates; for an apples-to-apples comparison between payment modes, our goal is to show the electricity consumption and carbon emissions per transaction. Some input requirements naturally emerge: total electricity used for operating the payment system, total number of transactions, the location of electrical grids used by the payment system, and their carbon emission levels. This serves as the basic framework for our analysis.

Credit cards

Prior to reaching 100% renewable energy, Visa and Mastercard released corporate responsibility and sustainability reports annually. Within those reports, we were able to find the companies’ total electricity consumption, the distribution of electricity towards operating data centers, and total switched transactions. We could make a reasonable assumption that all transaction processing happens within data centers, and easily calculate their respective electricity consumption per transaction.


Even though the number of transactions are publicly accessible, Bitcoin and Ethereum electricity consumption are more difficult to quantify since there aren’t reliable raw data sources regarding energy input. To figure out how to calculate it, let’s first revisit how these blockchain technologies work.

When a user initiates a Bitcoin transaction, it is processed in “blocks” and added to a public and immutable blockchain for record keeping. Miners with specialized computers compete to solve complex mathematical problems in order to verify and process these blocks. When a new block is generated, the “winning” miner is rewarded for their efforts in Bitcoin—and that’s how new Bitcoins are produced.

Typically, Bitcoin miners operate on mining “farms”—large clusters of specialized computers commonly known as application-specific integrated circuit (ASIC) mining rigs. Therefore, we could start off our approach using the energy efficiency of ASIC mining rig models which is publicly available. But there are hundreds of models—which ones are people using?

We’ll discuss this more in depth in part 2 of our series. If you’d like to help create a green digital financial future, join our team!