Contactless Technology and Its Growing Impact

Nineteen cities around the world have cut their emissions by more than 20% over the past decade, marking a shift towards greener urban hubs. As smart cities invest in eco-friendly initiatives, it’s clear that technology is paving the path to a less polluted world.

From electric cars to booking scooters on apps, these innovations could rewrite the future. But where do payment solutions fit in?

In this guide, we’ll look at how payment solutions can help smart cities cut waste and the exciting initiatives inspired by digital transactions.

Types of Contactless Payments in Cities

Contactless payments enable users to make transactions without inserting their card or inputting their PIN. Instead, they tap their bank card or digital wallet on a point of sale (POS) terminal, and the transaction is seamlessly completed.

Users can also make contactless payments via QR codes and app transfers, bringing plenty of versatility to payments.

In smart cities, this tech is being used across industries. On transport systems, for instance, Automated Fare Collection is now standard in many cities, including London and New York. Passengers can use contactless bank cards, digital wallets, or specific transport cards (like London’s Oyster card) to tap in and out of the systems.

Reducing Paper and Plastic Waste

When exploring how contactless technology reduces waste in cities, one of the most significant advantages is the reduction of paper.

As cash payments fall, demand for banknotes is at a 20-year low, highlighting the shift to card and contactless payments. This reduces the need for new banknotes to replace old, worn-out money, cutting the strain on printing. With less printing demand, more paper (or plastic, depending on the type of currency) is saved.

Contactless transactions are also cutting down on receipts. Digital alternatives sent straight to the user’s email inbox align with the convenience of contactless payments, making them the obvious choice. If they prefer, users can also track digital payments via mobile banking apps.

These systems enable city users to maintain a record of their payments, but without the need for unnecessary paper use. It’s an easy switch for more sustainable cities.

A Simpler Infrastructure

A shift that contactless payments bring to cities that’s often overlooked is the gradual disappearance of bulky, resource-heavy infrastructure.

Traditional payments require a plethora of physical systems, including ticket machines, plastic bank and travel cards, and cash points. All of this infrastructure requires raw materials and energy to produce, alongside ongoing maintenance. Over time, it adds up not just in cost, but in waste.

Contactless tech is much sleeker and more streamlined. Users can pay on devices they already carry, like smartphones or smart watches, and there’s less need for money-related infrastructure.

Think of a train station, for example. Rather than cash points, ticket machines, and an in-person payment kiosk, contactless payments require a simple upgrade to ticket barriers and a smartphone. Simple, but powerfully sustainable.

Cutting Down on Emissions

Cash is a physical object that needs to be hauled from place to place. This transportation releases emissions, contributing to climate change.

Interestingly, though, when looking at the footprint of banknotes, transportation emissions are outnumbered by those produced at the cash point. ATMs are responsible for 60% of emissions associated with cash, making them a potential drain on the carbon budget of smart cities.

Contactless payments remove the need for both hefty transport and ATMs. Users on both ends of the transaction (paying and receiving the payment) can enable transactions from their smartphones, which most people already have. There’s no need for extra shipping, and ATMs are out of the picture.

If organisations want a dedicated payment terminal, these small, lightweight machines are far easier to ship around than bags full of coins and notes. After delivery, the organisation is good to go, with no further need for transportation.

Encourage Recycling

Contactless payment tech is driving eco-friendly innovation. As so often happens, it’s created a domino effect of new ideas and green initiatives, including one to encourage recycling.

This scheme is already established in Aarhus, Denmark, and here’s how it works:

The customer buys a product – let’s say a coffee in a single-use coffee cup from a local cafe.
The product includes a recycling deposit within the total price.
They pay for the product contactlessly using a bank card or digital wallet.
When they’ve drunk their coffee, they can go to a designated recycling point, recycle the cup, and use their card or digital wallet to redeem their deposit.

This is an example of how widespread the benefits of smart payments truly are. They can enable exciting eco-initiatives across smart cities, all while maintaining the streamlined convenience that our modern urban hubs are known for.

Make Data-Driven Decisions

One of the most powerful benefits of contactless payments is the data they unlock.

Every tap of a card or digital wallet generates valuable, real-time insights into smart city life. These aren’t personal details (GDPR exists for a reason), but patterns of the people who live and travel around the city. By utilising payment data, smart cities can find out:

Peak travel times
High-footfall retail and hospitality areas
Busy periods for entertainment venues and events
Demand patterns in public services
Underused services that may be over-resourced
Seasonal and weather-driven patterns
Payment trends across different neighbourhoods

For city planners and service providers, this is a game-changer. Instead of relying on estimates or data that’s always one step behind, they can make decisions based on how people are interacting with the city right now.

With clearer visibility, cities can reduce waste at the source rather than simply managing it.

Transport services can be scaled to avoid empty or underused journeys, for instance, while energy use in public spaces can be adjusted to match real demand. Retailers and venues can also better predict footfall, reducing overproduction, excess stock, and unnecessary packaging.

Even public services can become leaner and more efficient, ensuring resources aren’t over-allocated where they’re not needed. The result is a city that uses less, wastes less, and responds more intelligently to how people actually live.

Final Thoughts

Smart payments have impacts that go far beyond the surface. While yes, they absolutely make everyday transactions simpler, the examples in this article highlight that payments are the tip of the iceberg, and when it comes to reducing waste, investing in contactless systems is a no-brainer.