Paying by debit is less damaging for the environment than paying with cash. A payment with a debit card costs just as much power as an 8-watt energy-saving bulb that burns for one and a half hours. Besides that debit payments mainly cost energy due to the production of the terminal, card and the energy consumption of the device. Those devices are usually running 24 hours a day. Furthermore, the power consumption of the data centers that process the payments and the production costs of the debit card contribute to the emissions.
Paying by cash is equivalent to letting the same lamp burn for two hours. Also with cash payments, the transport of banknotes and coins is particularly bad for the environment. Furthermore, the extraction of copper ore and the electricity consumption of the ATMs result in the relatively higher ecological footprint.
Source: DNB Working Paper