A service provider (SP) is an organization that performs a sequence of activities to satisfy a need for a specific group of customers or for the general public. Consultancies, financial services, and telecommunication services are typical examples of SPs. The service is delivered to the users by means of a chain of activities, which may involve several partners: planning and managing the supply chain is therefore a key aspect of this business A sustainable service supply chain (SSSC) is a combination of a group of companies utilizing their resources to meet the end user’s demand in an efficient way and at the right time. In the last decade, the concept of sustainability has been introduced in SSSCs, but the body of knowledge on green service supply chains is not sufficiently structured yet. In addition, both from the users’ and the managerial perspectives the advantages of programs aimed at introducing sustainability in this field are not completely clear. Therefore, the presentation and discussion of case studies on SSSC is particularly significant.
The present study is focused on the payment service and, more specifically, investigates the case study of one of the biggest payment service provider
(PSP) companies in Iran. PSPs offer core services (e.g., the technical processing of payments) and some complementary services that concern the same activity (e.g., the payment transaction) and are valuable to their customers. In particular, every transaction is confirmed by the production of a receipt that is usually printed on thermal paper. Previous research shows that thermal paper, being biohazardous material, causes environmental problems, and it is even hazardous to mix it with normal paper waste in the recycling process. On the other hand, using these papers and thermal printers enforce the PSP companies to provide maintenance service for the POS (Point of Sale) machines throughout the country. In a recent report (February 2019 [1
]), Ibena (Iranian economic and banking news channel) highlighted that thermal papers are one of the most relevant consumable costs for the banking network and payment service sector in Iran. Moreover, the preventive maintenance
(PM) of the thermal printers itself causes a huge number of unnecessary trips that are mostly made by car or motorcycle.
It is worth remarking that payment services are widespread and a large part of their processes are based on digital technology. However, even if the payment transaction receipt can be digital, in many countries, the users still show a tendency to print it: the volumes of thermal paper used and the associated environmental costs are not negligible. For instance, a study by Yaaguby [2
] points up that the thermal paper receipts used in Iran in six months could wrap around the earth nine times. Plans of waste reduction in this sector could therefore produce considerable environmental benefits. Nevertheless, the scientific literature on the subject is still rather limited. The present paper offers a contribution to the discussion on the transition of the payment service supply chain towards sustainability, highlighting some obstacles to an otherwise technically feasible digital transformation of the whole service.
The study investigates the case of a PSP that delivers its services through a mix of “soft” activities (e.g., the digital payment) and “hard” activities (e.g., the production of the paper receipt). One of the company’s strategic goals is to remove the waste from the service supply chain, making it more sustainable and efficient. On this account, the identification of technically feasible alternatives to deliver the complementary service is a first step of the study, which aims to address the question: what are the alternative ways for the thermal paper receipt, which are feasible for the target company? The analysis and evaluation of the alternatives was then carried out, in order to answer a second question: which alternative is the most effective in enabling the transition towards sustainable service, ensuring a service that is reliable and acceptable for the users? The evaluation surely depends on the main actors of the payment service, namely the PSP and the users (sellers and customers), and on the regulations in force in the specific country, which may impose requirements and limitations to the technical solutions. Furthermore, the evaluation criteria should be related to the above mentioned company’s goal and to the key dimensions of sustainability. In summary, in order to address the two questions, the methodology is based on a multi-criteria model in which the feasible alternatives are assessed against a set of criteria validated by the company managers and the priorities are obtained by means of empirical surveys administered to the payment service provider and users. The present study is an attempt to provide the company with a structured method for aiding the identification and selection of the most effective solutions, and, at the same time, to individuate the barriers to improving the sustainability of the payment service supply chain.
The next section presents the results of the review of the scientific literature that points out the research gap concerning sustainability in the payment service supply chain. Section 3
illustrates the general methodology employed to address the above mentioned questions and its application to the selected case study. The results of the application are presented in Section 4
and discussed in Section 5
. Some concluding remarks are included in Section 6
2. Literature Review
The service supply chain links the service provider to other businesses or end users. The SP delivers value added services by means of a chain of activities that can be “hard” (such as the production or management of physical entities) or “soft” (such as the transmission of digital data). The nature of the service, the characteristics of the SP and their clients may influence the mix of hard and soft activities, and the features of the service supply chain. In particular, the transition to a green service depends both on the strategic objectives of the service and on the clients’ behavior. Indeed, the consumers’ behavior is a critical issue, which influences the cost and performance of the whole process in the service providing sector [3
]. A recent study by Pagell and Shevchenko emphasizes several dimensions of sustainability in supply chains and highlights the importance of environmental and social issues: “Future SCM research will have to treat a supply chain’s social and environmental performance as equally or more valid than economic performance” [4
In order to individuate the studies related to sustainable services, a structured search on the Scopus database was carried out. The search was limited to peer-reviewed papers and the language was limited to English by click box selection in the advanced search toolbox of Scopus database.
The process of literature review included the following steps:
search for relevant literature on PSP (only one paper published in Scopus);
search for relevant literature on sustainability in the service sector, digital services and sustainability, MCDM in sustainability studies in the service sector;
evaluate the relevance of sources;
report the highlights in the literature review.
Scopus was selected since it is the largest abstract and citation database of peer-reviewed literature. The results are shown in Figure 1
. The string of the search on the database is as follows:
TITLE-ABS-KEY ((“service provider” OR “service providing”) AND (“sustainable” OR “sustainability” OR “Circular Economy” OR “Green”) AND (“supply chain”)).
Notwithstanding some studies are focused on natural systems and the influence of sustainable supply chain (see e.g., [5
]), the research on socio-ecological integrated systems has not been carried out in the service sector as much as in the production supply chain. In particular, most of the case studies are limited to the last five years. Papetti and colleagues suggested the web-based platform as a tool for eco-sustainable supply chain management [6
] and Hussain and colleagues studied sustainability of the health care service supply chain [7
]. Figure 1
illustrates the trend in the studies on the sustainability of service supply chains. The figure reveals that only 122 peer reviewed documents including 91 journal papers and 31 conference papers have been recently published which are significantly related to the topic “sustainable service supply chain”. The line graph in Figure 1
shows a sharp increase in the quantity of the publications in the last seven years; furthermore, comparing our literature review to the one by Liu et al. [8
], we also witness a significant increase from 2017 to 2019. Nevertheless, the Scopus database does not include any studies related with sustainability of payment services, while only one paper investigates the PSP supply chain, which is focused on the internet of things and the importance of the service supply chain to achieve a positive return on investment [9
The main activity of a payment service provider (PSP) is selling and buying for the end users. This service was studied in detail by O’Mahony in 1997 [9
]. Payment methods include e-commerce, mobile payment, online banking, credit cards, bank transfer and others. Usually, PSP is connected to multiple banks and uses a wide range of banking networks. The largest part of the core and ancillary services offered by PSPs are digital services. The service supply chain connects online service providers, retailers and wholesalers, and the end customers that use online payment service to pay. PSPs also offer complementary services like the production and delivery of documents such as the transactions receipts. Documents can be produced in digital (soft) or physical (hard) formats, which imply different flows of activity and materials. In many contexts, the electronic payment service is traditionally enabled by POS terminals whose management requires supplying material and other supporting services (e.g., maintenance). Other complementary services may require the management of hard activities and materials; thus, they could be subjected to close scrutiny in order to improve the service sustainability.
Since the studies that focused on PSP service are limited to one published paper, the authors decided to perform a second search on Scopus in which only two general keywords were used: “Sustainab*” and “Digital services”. 71 indexed papers were found. Several of them report studies on the digitalization of services that have been usually delivered by means of hard activities. Supply chain and logistics are the most popular subject areas, where solutions of smart mobility and transportation have been evaluated considering CO2
emission as the key environmental aspect [10
]. In a case study of YouTube as a digital service provider in 2019, Preist et al. investigated how Sustainable Interaction Design of digital services can contribute to the corporate strategies for greenhouse gas
(GHG) reduction [16
]. Koukopoulos et al. in 2019 presented a prototype digital system that supports the goal of sustainability for a modern public library [17
]. However, the main objective of this study was attracting a wider audience of library visitors and provide new sources of revenue. Digital product-service-systems constitute another investigated subject area [18
]. In 2017, Agbozo studied the development of a digital government framework, and he considered the social aspects of sustainability and eService adoption, cybersecurity challenges, etc. [19
In the last decade an interest in intangible offerings and service innovation has emerged, replacing the focus on tangible products and “hard” activities. In this respect, the popularity of product-service innovation
(PSI) is increasing because of the inherent interrelation between firm performance and PSI [20
]. In production firms, the customer and logistics IT processes are considered the necessary basic elements of service innovation [21
]. A recent stream of research conducted by a group of European researchers has focused on product-service innovation (PSI) and green servitization [20
]. They studied different companies that implement digital solutions to support business operation. For example, they highlighted the role of “firms willing to offer green services should consider offering digital services first” [22
]. Sectoral studies reveal that remanufacturing and recycling in the computer and electronics industry increases flexibility and sustainability of the supply chain [23
], and implementing digital and green servitization causes significant increase of firms productivity in the automotive industry [22
]. Also, in food companies of the retailing sector, companies try to add new value to products by promoting digital servitization to gain competitive advantages [24
Many of the analyzed papers explore means of digitalizing the activities of production, transfer and storing of information connected with the core services, which, as e.g., in logistics, often require hard activities. In the payment service, while the core service is mainly delivered through soft activities, the complementary service of documenting the transaction is traditionally based on hard activities. The receipt is printed on thermal papers using POS terminals. Thermal receipts are widely used in payment services. Most of the POS terminals, shopping receipt in selling points and shops and automated teller machines
(ATM), which print a paper receipt, use this sort of paper. The paper is coated with different chemicals to make it printable and the reactant acid in coating material is mostly Bisphenol A
(BPA). Several epidemiology studies disclose BPA exposures and threats of adverse health outcomes [25
]. Because BPA is hazardous, mixing thermal paper receipts with other material to recycle them should be avoided. Indeed, BPA can contaminate other recycled paper products including paper bags or toilet paper.
On account of the diffusion of payment services, the volumes of thermal paper used and the environmental costs that it can cause, the scarcity of studies on this topic testifies a notable gap in the research on sustainable services. It is worth remarking that this complementary service is indeed a value-added service for the client and it is required by the regulations of many countries. Alternatives to the printed transaction receipts should then be identified and evaluated in order to reduce the waste and impacts produced by the service. It is therefore necessary to individuate attributes or criteria of sustainability that can be valid for the service sector and employ a method that can support the evaluation in presence of several criteria.
In sustainability studies, the criteria or indicators used by researchers in quantitative analysis and multi-criteria decision making
(MCDM) methods are different and depend on the subject area. For instance, in agricultural studies, Balezentis et al. used four criteria (total output, total water footprint, Shannon equitability index and downside coefficient of yield variation) [30
]; while in aquaculture Martinez-Cordero and Leung tried to find the best decision regarding the employment, foreign exchange earnings, economic rent maximization, and total pollution minimization, subject to land availability and local market demand constraints [31
]. The emergence of new concepts such as “servitization” and product-service systems (PSS) highlighted the need to consider socio-ecological aspects [32
]. In this case, the interrelation between the services to enhance the production is the main objective. In 2019, Zhao et al. used customer centricity, service efficiency enhancement, reduced credit risk, and the development of scenario finance as criteria in a study to improve “Financial Service Innovation Strategies” for improving China’s Banking Industry [33
]; nevertheless, the main goal of the authors was creating competitive advantage. Also, Raut et al. focused on banking service and introduced 32 criteria for sustainability in the banking industry [34
]. However, the published studies that follows quantitative multi-criteria/attribute analysis in the context of sustainable services are rather limited.
In the sector of pure services, i.e. where services are not related to manufacturing, the studies that used MCDM approaches are very limited and they mainly include the healthcare, urban mobility and transport, and hospitality services. For example, a paper by Liu et al. in 2019 was focused on health care service and the authors used integrated decision making trial and evaluation laboratory
(DEMATEL)-based analytic network process
(DANP) and a modified VIKOR (VIseKriterijumska Optimizacija I Kompromisno Resenje) method to form a DDANPMV (DEMATEL + DANP + Modified VIKOR) model to examine consumers’ adoption of mobile health care to promote the sustainable development of medical resources [35
]. Moslem et al. analyzed stakeholder consensus for a sustainable transport development decision by the Analytic Hierarchy Process
] and Ozturkoglu et al. studied the dimensions for “sustainability-oriented hospitality service innovation
]. These studies were all published in 2019, showing that research on the application of decision support tools like MCDM for the evaluation of sustainable solutions in the service sector is still lacking.
5.1. Responsible Consumption
The habit of using the printed receipts is presently very common among sellers and end customers, who usually produce and take them. Such cultural aspect is key and should be changed. For instance, the owners of the POS terminals could inspect their reports online and save a digital copy instead of printing them. As results from the interviews with the SEM experts, using thermal printers for long reports results in wear of the mechanical parts, which require maintenance before schedule and maybe emergency maintenance service and, consequently, extra transportation. On the other hand, if the transaction is successful, both seller and buyer can refute the printed receipt. In fact, the end users often check the receipt once and threw it away immediately. Moreover, since the SMS reporting of the transactions is cheap in Iran—yet more expensive than email with Iran’s national internet—all of the electronic payment users can be encouraged to use the SMS reporting service for their bank account; indeed, they can receive an immediate SMS from the bank for any withdrawal from the account. This means that, the habit of printing the receipt can be considered as a “false using culture,” which could be changed by providing the users with accurate information.
According to the survey results, the majority of the respondents are aware of the toxicity of thermal papers, while a 34% are not aware of the environmental impact caused by the paper receipts. The histogram in Figure 7
shows how much the respondents are concerned with environmental issues, while the histogram in Figure 8
shows the number of respondents who habitually take the receipt after electronic payments in general. In addition, 54% of the respondents declare that they suggest to others to take the paper receipt. This confirms that even if the majority of subjects are aware of the environmental and safety issues, they have a strong tendency to use the traditional form of this complementary service. In sum, the respondents’ environmental awareness and practices are not aligned.
shows the level of preference, on a 1–5 score, for using the paper receipt in a micro-zone in Tehran, in whole Tehran and in another city. Comparing the histograms B and C unveils that the social preference is very similar in different cities; on the contrary, the answers of the micro-zone appear to be rather different. In the specific, the chosen micro-zone is a commercial area with many shops and malls. It seems that in a commercial zone, users prefer to take the paper receipt after their transactions. This might be related to the characteristics of the commercial transaction which is strongly regulated by traditional habits. To sum up, in order to decrease the use of thermal paper receipts, efforts for cultural change and public awareness are the first step.
All the interviewed experts agree on the influential role played by the regulations related to online payment in Iran. According to the instructions of the standards SHP_STD_EFTPOSRECEIPT, providing a receipt is a necessary complementary service for PSP companies. Nevertheless, this receipt could be sent by email. The paper receipt is not a requirement but just a traditional way to provide this service, which established a habit and culture that could be changed. The dematerialization of the receipt, on the other hand, is technically possible by adding a new function script in the main software of the PSP company.
According to this regulation, the POS terminal must offer the opportunity to print the receipt, but the service provider can add another option besides printing. Therefore, even if the PSP company adopts greener alternatives, the “print” option must always be available: the selection depends on the client’s decision. Furthermore, if the POS terminal cannot give the paper receipt, whenever the user selects the print alternative, the transaction fails. This legal necessity calls for a culture of responsible consumption. Indeed, the whole transition to a sustainable supply chain will strongly depend on the end users’ requirements and preferences. It is the end user who chooses to print the receipt or accept a green alternative. In this case, a change of habit could result from a more widespread communication of the issues connected to the hazardous material on the thermal papers and the difficulties and social costs associated with recycling this paper.
A revision of the regulation is also possible. In fact, every year representatives of the payment service sector and the authorities gather to review the obligations and rules, and survey the operations and functions of PSPs. Then, a stronger commitment to provide a greener service could be promoted within the updated regulation. On 15 September 2016, the Iranian government enacted the adoption of the agenda 2030 in all the cases where its goals are not contrary to the law. Moreover, on 10 May 2017 the Iranian foreign minister declared,” We have no obligation to follow the agenda in cases that not comply with internal laws and customs”. This means that the government will support the efforts to solve environmental issues. Since the elimination of hazardous material is associated with environmental issues, the Iranian government will also promote and support the requirements for the transition to a more sustainable supply chain in the payment service.
5.2. Unnecessary Trips
Thermal printers in POS terminals are the source of a considerable number of trips for maintenance. Classical POS terminals have more hardware problems and high-tech sets have more software problems. The majority of the POS terminals in Iran are classical models. Therefore, the best way to decrease the maintenance operations of the POS is through the reduction of the causes of hardware wear and roll replacement, which confirm the above-mentioned conclusion. In addition, in order to decrease the transportation waste, an optimization of the route travelled for maintenance by the technicians could be useful. In the selected zone, many of the inspection locations are closer than 50 meters together (see Figure 4
). Since petrol is very cheap in Iran, there is an unintentional inclination to use internal combustion engine vehicles even for short distances, which is an important source of CO2
emission and traffic in big cities. These facts call for another cultural change to march a close distance on foot. To conclude, two kinds of improvement are required to decrease the transportation waste: first, the best route to reach all of the inspection points, and, second, the transportation means, from vehicle to foot.
A robust plan for collecting the thermal paper receipts is still lacking. By all accounts, using thermal papers is not an eco-friendly way of reporting and monitoring the payments and transactions. The existing consumption of printed receipts is the source of a huge amount of thermal paper containing hazardous material. This paper waste is collected together with other solid waste and is frequently wrongly mixed with normal recyclable paper, thus contaminating the final product of the recycling activity. As previously remarked, at the end of the service supply chain there are two types of subjects, shop owners and end customers, who use the payment service and take the receipt. As for the end customers, only 17% of the respondents declared to separate the thermal paper as hazardous material, 36% of the respondents separate the paper from other kind of trash but they mix the receipts with other papers. On the other hand, there was only one of the interviewed shop owners who regularly collects the thermal receipts in a separated bin when the customer does not need to keep it anymore. To conclude, a robust plan for collecting the thermal paper waste especially in selling points and shops is necessary.
5.4. The Best Alternative to Paper Receipt
The TOPSIS evaluation shows that, according to the survey results, the most appropriate alternative to the thermal paper receipt in the service supply chain of SEP Co. is the notification sent by an application (app notification). This will be a great transition toward sustainability in the service sector in Iran. Nevertheless, as remarked by an interviewed Android POS Developer of the company, some cyber-security issues will arise in case of setting up the app notification instead of the thermal paper receipt. Moreover, several end users do not use the smart phones yet, while many smart phone owners will need tutoring to be able to use the app notification.
After the internet shutdown in Iran in November 2019, many internet users distrust internet-based services. However, the proposed service can be based on the national internet, which seems to be considered more reliable after that event. Still, the cyber security of the national internet will be an issue to be settled. To sum up, implementing the app notification needs more studies on cyber security, training programs for the end users and keeping the option of printing the receipt for the group of customers who do not use smartphones.
5.5. Managerial Implications
The interviewed experts agree that the adoption of alternative way of reporting in the service supply chain might affect the managerial processes of the company. It has been remarked that the investigated service is complementary; therefore, a possible dependence on external providers of IT services is possibly less problematic than the case of the core service. Nevertheless, the risk of lock-in cannot be neglected: partnership administration thus becomes a core managerial activity. Particularly in the supply chain planning phase, risk management becomes a necessary administrative measure to ensure that the service is resilient and sustainable. Furthermore, as previously observed, the identified alternatives require a close collaboration with the national internet service. This cooperation might reduce the power of the company’s management on strategic decisions concerning technology selection and updating, thus diminishing the company’s agility.
The experts concur that the introduction of the proposed solutions will have organizational benefits too, as it will simplify some resource-consuming processes (e.g., material flow management), which, in the specific case, are presently associated only to complementary services. Moreover, the transition to the eReceipt will reduce the maintenance of the POS terminals, and the associated direct costs, but also the administration cost for managing and scheduling the maintenance service and the operators. These outcomes will eventually free up management resources that can be assigned to the core services. In addition, a partnership with the key external service suppliers could provide a competitive advantage by using IT technology to design new value-added services or open up new markets.
5.6. Limitations of the Study
The main limitations of the present study concern the structure of the evaluation model and the general validity of the results. The MCDM model employs a small number of criteria related to sustainability. This allowed to reduce the time required for the interviews and their complexity, which was compatible with the available resources for the survey. However, in order to carry out a more detailed evaluation, a wider set of attributes of the concept “sustainability” should be used. The attribution of weights to the criteria, which in the present study were validated by the interviewed experts, could be more accurate by means of assessment procedures like the “swing weights” or pairwise comparisons. Still, such procedures require a more demanding interaction between interviewer and respondent. As far as the results are concerned, it must be remarked that they clearly depend on the surveyed samples. In particular, the identified alternatives to the printed receipt were validated by the SEP experts and they are probably applicable to other Iranian PSPs. Nevertheless, their acceptability in other contexts should be confirmed as it depends on the technology that is economically available and the legal requirements in force.
The service that is investigated in this study is made up of digital core services and complementary services that can be based on soft or hard activities. The end users value the opportunity to retrieve a receipt after a payment transaction and this is often regulated by the law. Traditionally, the receipt is printed on thermal paper, which is the source of waste and environmental costs. Therefore, this study addressed the first research question, i.e., what feasible substitutions of paper receipt can be implemented, by means of interviews with the company experts. Three main alternative ways and nine sub-alternatives were identified. The second question was addressed by ranking the alternatives according to a set of criteria proposed in agreement with the company experts. In summary, a reduction of the waste produced in the traditional service offered by the investigated PSP in Iran, is possible by offering two options to the users:
using the app notification as a rule;
printing the receipt only in particular cases—as previously noted, the legislation on electronic payment sets out this requirement.
The transition to the green service needs some changes in the core managerial activity like partnership administration and the elaboration of a risk management plan. On the other hand, the new configuration of the service could provide some organizational benefits, such as a leaner service supply chain and reduced administration costs. However, this approach has some limits that should be considered. Since the first option needs a cooperation with third parties, like Telecommunication Company of Iran, and providing some private data to the external companies, cyber security and customer privacy should be considered in the process of sending the eReceipt. In order to make the second option viable, it is necessary to raise the public awareness on the use and disposal of hazardous materials, and reinforce a responsible consumption behavior of the users of the payment service. On the other hand, the second option strongly depends on legal requirements and users’ habit. In fact, the results of this study show that the public is well aware of the environmental and safety issues in general, but their declared preference for the traditional printed receipt markedly contrast with that. The complete substitution of the paper receipt with eReceipt will be possible only if public support for sustainable consumption is strong enough to influence the regulatory bodies and transform actual practices.