‘Green’ credit card comes to PH

BLACK BUT GREEN Zalora card

Credit card is referred to as “plastic money” precisely because it is made of plastic. But in this day and age when people are more mindful of their plastic and carbon footprint, some decoupling is under way.

An “eco-friendly” credit card—touted as the first of its kind in the Philippines—was recently launched by fashion and lifestyle e-commerce platform Zalora in partnership with RCBC Bankard and payments giant Mastercard.

This cobranded Zalora credit card seeks to capture a meaningful share of “revenge” spending as well as the Christmas spending by digital-savvy Filipinos, especially consumers who increasingly seek planet-friendly alternatives.

For Zalora—which began as a fashion online retailer in 2012 but has diversified into selling home essentials and even electronic items during this pandemic—this is so far its biggest launch in the Philippine market.

Zalora credit card “is not just commercial innovation for our consumers, it’s also in line with our sustainability commitment and values,” Zalora chief executive officer (CEO) Gunjan Soni stressed during the product launch.

The card itself is 80-percent made of polylactic acid (PLA), a plastic substitute made from fermented plant starch, in this case nonedible corn. PLA is increasing in popularity as a substitute to petroleum-based plastic, but it’s the first time that this has been used as material for credit cards in the Philippines, which is also the first market for the Zalora co-branded card.

For consumers who don’t want any physical card at all, a digital-only option is available.Beyond the card

Sustainability is one of Zalora’s key differentiators in the e-commerce space, not just in the Philippines but across Southeast Asia, Zalora Philippines cofounder and CEO Paulo Campos said at a recent press briefing.

For the Philippine market, Zalora had aspired for a biodegradable card and found kindred partners in RCBC Bankard and Mastercard that made it happen. To recall, RCBC Bankard’s parent bank, RCBC, has stopped lending to coal-fired power plants and tapped the burgeoning sustainability bond market to fund projects with environmental and social benefits. Mastercard has committed to plant 100 million new trees worldwide by 2025 and to attain “net zero” emissions by 2050 in line with the Paris Agreement.

Zalora itself is part of Global Fashion Group, a leading fashion and lifestyle destination in Asia Pacific, Latin America and Eastern Europe. The Ayala group—the first conglomerate to commit to the mid-century net zero goal—has been a strategic investor in Zalora Philippines since 2017.

But greening the card itself is not enough. As e-commerce boomed during this pandemic, so did the volume of plastic waste used for packaging. For some, it has taken the fun out of bursting bubble wraps, which lost their novelty as waste disposal became a greater burden.

“We’re very happy to move to a form of recycled plastic that we started using just at the start of the pandemic. And that really allowed us to lower our carbon footprint generally,” Campos said.

Zalora is also striving to minimize its carbon footprint in operating its warehousing and other facilities, he said.

Another pillar of its sustainability program is to promote “ethical” sourcing. In its app, Zalora has an “Earth-Edit” selection for products and brands that meet its sustainability criteria. The assortment is in line with these themes: preloved, sustainable materials, eco-production, fair production, animal friendly, community engagement.

With its own private label, Campos said Zalora was also using “sustainably sourced” materials.

Supporting sustainability projects in the community and promoting environmental consciousness among its employees is also among Zalora’s commitments, he said.The perks

About 38.88 million Filipinos today are purchasing consumer goods via the internet. With this, the total value of consumer goods in the e-commerce market has increased by 42.5 percent, according to Janio Asia, a cross-border logistics service provider.

Campos said e-commerce in the Philippines was still going strong, and poised to become a $15-billion industry by 2025, coming from just $3 billion in 2019 and $4 billion in 2020.

To attract its fair share of consumers, Zalora credit card offers free P5,000 shopping credits upon account opening. It allows cardholders to earn Zalora credits on all card transactions, and offers unlimited free shipping with no minimum spend, zero-percent installment, alongside exclusive sweeteners on Zalora orders.

RCBC Bankard and Zalora also waive the annual fee for the first year of enrollment. Cardholders will be given access to RCBC Bankard’s “Spend Monitor” and “Spend Analyzer,” which are tools to manage their expenses.

“This strategic partnership is very timely given the growing e-commerce industry and the improving economic outlook in the Philippines. Further, the Zalora credit card is a testament to our commitment to our customers that we will continue innovating to deliver mobile and payment solutions that truly respond to their needs and deliver the best customer experience,” said Arniel Vincent Ong, RCBC Bankard president and CEO.

Credit card limit depends on one’s earnings capability. “We normally cap it at P5 million, but we can go higher depending on one’s capacity to pay,” Ong said.

Amid improving economic outlook and health conditions, card payments in the country are expected to rebound by 15.4 percent this year, coming from a slump of 7.4 percent in 2020.

“As more Filipinos adopt cashless digital payments to enable how they live and work, it is critical that Mastercard together with partners like Zalora and RCBC Bankard continue to bring digital-first user experiences to market. In addition, Mastercard credit cards are designed to be safe, simple and secure so consumers can have peace of mind that every transaction is protected,” said Simon Calasanz, country manager at Mastercard Philippines.