Meet the bank that's replacing every debit card with wood

GLS Bank

GLS Bank, founded in Germany in 1974 at the beginning of the global environmental movement, emphasizes sustainability in every aspect of its business. But its switch from first-use plastic payment cards to a sustainable material in 2018 had one big problem.

The material it chose — polylactic acid (PLA), which is commonly made from corn — was designed to have the same look and feel as ordinary plastic. It wasn't a differentiator. 

"Visually, haptic, it's exactly the same as a plastic card," said Alexander Schulz, senior advisor of payment transactions at GLS Bank. It chose to move its full debit portfolio to wood because the material is "recognizable, sustainable and an identifying mark for the bank," he said. 

GLS, a small bank based in Bochum, Germany, caters to a European audience that rewards sustainability. It's at the forefront of a broader movement of financial institutions and companies in other industries — including hotels — moving away from first-use plastic for identity and access cards. 

As a cooperative bank, GLS answers to the needs of its members instead of the whims of the stock market. It also publishes a list of its commercial loans in a customer magazine to demonstrate that it offers financing only to sustainable businesses.

Thus, it could not pass up the opportunity to replace its PLA cards — already a more expensive option than first-use plastic — with wood cards, even at triple the cost. "We are not driven by making money," though the card's distinctiveness does provide a marketing benefit, Schulz said.

"When you pay at the point of sale with a Timbercard, it creates a lot of talking and everybody asks, oh, is it real wood?" Schulz said. "Most people don't believe that it's a wood card."

The Timbercard is made by Copecto, a unit of DG Nexolution in Germany, and GLS began testing this product in September 2022 with 1,500 cards. It went into full production in October 2023, replacing PLA debit cards with wood as the old cards expire, and in that time GLS has converted 40,000 of its 300,000 debit cards to the new material. GLS also has about 132,000 PLA credit cards in circulation, but its German customers rarely use these except for travel or online purchases, and thus the credit portfolio is not a part of the bank's transition to wood.

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The Timbercard itself is a mix of four layers of wood pressed together with a layer of paper to hold the copper wire antenna. Copecto uses an EMV chip and antenna provided by Thales, a French manufacturer.

A cubic meter of wood is enough to create 100,000 of these cards, according to GLS; this amount of wood grows naturally in Germany every three to four seconds, making the materials almost instantly renewable, according to the National Forest Inventory conducted by the country's Federal Ministry of Food and Agriculture.

Instead of painting over the cards with ink, GLS has its brand laser-etched into it, maintaining the look and feel of the wood it's made from (a mix of maple and sycamore). The only pop of color is a sticker for Mastercard's logo, since the card network insists that its logo must be in color (the bank is negotiating this point, Schulz said).

Even though the Timbercard is made almost entirely of biodegradable components, Schulz still advises users to find a recycling bin for their expired payment cards due to the metal elements that compose the antenna, EMV chip and magnetic stripe. In a later version, GLS hopes to remove at least the magstripe.

Another Timbercard issuer, a bank-owned company in Switzerland called Viseca, suggested that users could instead remove the metal components on their own and toss the card in a compost heap or the soil of a potted plant. 

Either option is preferable to plastic. First-use plastic is produced from fossil fuels and contains highly toxic chemicals. Plastic takes centuries to break down — and as it does, its components can be inhaled or ingested by humans, or leaked into the environment where it will harm other forms of life. 

"The problem with plastic is the durability. It lasts extremely long, and even nature doesn't know how to get rid of it,"  Bedrija Hamza, senior innovation manager at Viseca, said in an earlier interview with American Banker. 

GLS' choice to treat the Timbercard as a differentiator is consistent with the way that Thales, which makes the card's metal components, frames the product. Thales likens the card to one made entirely of metal, which issuers typically market as part of a premium account due to the material's cost.

Other banks that have switched away from plastic cards have reported similar reactions to what GLS has heard from his customers. 

One example is the Bank of New Hampshire, which is a mutual bank, meaning it has an ownership structure that is comparable to that of GLS. And like the German bank, its customers are keenly interested in improving the environment.

Thus, when the $2.5 billion-asset bank began switching its plastic debit cards to PLA in 2022 — at a premium of 30 cents more than what it paid for first-use plastic — cardholders expressed more curiosity about the sustainable material than the underlying expense.

"Every time you talk to a customer about a biodegradable card made out of nonedible corn, it always gets people talking," said Eric Carter, the bank's digital solutions and innovations officer, in an interview last year with American Banker. One of the common questions is whether the corn-based card can be eaten (it can't). 

Judith Enck, former regional administrator with the U.S. Environmental Protection Agency and president of Beyond Plastics, characterized these banks as trendsetters.

"It is interesting to see this kind of leadership coming from banking cooperatives," Enck said. "We need them to lead the way and show other banks how it's done. I applaud their move and hope to see more initiatives like this in the banking sector."

Other issuers are creatively marketing their use of alternative materials. Last week, American Express began issuing a new version of its Delta SkyMiles Reserve and Reserve Business Card, made from metal that has been recycled from the parts of two retired Boeing 747 aircraft. As part of the premium design, the card bears the plane's tail number, first and last flight dates, and miles flown. Amex issued a similar metal Delta card in 2022; the older version got 25% of its metal from a retired Boeing 747, whereas the new version uses 33% of its material from the grounded planes.

On a broader scale, several banks have made long-term promises about replacing first-use plastic with recycled plastic or biodegradable alternatives. Bank of America, which issues 54 million cards a year, announced a plan in April 2022 to ensure that all of its credit and debit cards would be made from at least 80% recycled plastic as of last year. 

And Mastercard will require all banks to use sustainable materials in any new card issued as of 2028. It is working with three European card manufacturers — IDEMIA (France), Giesecke+Devrient (Germany) and Gemalto (a Dutch unit of Thales) — to make sure there is a ready supply of alternative materials in the market for its issuers to use. 

"I am encouraged to see banks moving away from PVC plastics and relying on alternatives to plastic, including wood," Enck said.