Professional Documents
Culture Documents
1 Introduction
Meaning
Plastic money refers to credit cards, you use them whenever you want
and pay later (with interest, of course). It makes it too easy for people to buy
things they normally could not afford, which makes it easier to get into debt.
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Definition
A slang phrase for credit cards, especially when such cards used
to make purchases. The "plastic" portion of this term refers to the plastic
construction of credit cards, as opposed to paper and metal of currency. The
"money" portion is an erroneous reference to credit cards as a form of
money, which they are not. Although credit cards do facilitate transactions,
because they are a liability rather than an asset, they are not money and not
part of the economy's money supply.
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Ch.2 The History Of Credit Cards and Debit Cards In
Plastic Money
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Plastic Becomes the Standard
The first Diner's Club cards were made out of cardboard or celluloid.
In 1959 American Express changed all that with the first card made of
plastic. American Express created a system of making an impression of the
card presented at the register for payment. Then that impression was billed
to the customer and due in full each month. Several American Express cards
still operate like this as of 2010. It was not until the late 1980s that
American Express began allowing people to pay their balance over time
with additional card options.
The Visa association of cards took credit cards to a new level in 1989
when they introduced debit cards. These cards linked consumers to their
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checking accounts. Money was now drawn from a checking account at the
point of sale with these new cards and replaced check writing. This helped
the merchants check that money was available and made it easier to track
the customer if the funds could not be obtained. Consumers liked the
convenience of not having to write checks at the point of sale, which made
debit cards a safe alternative to cash and checks.
The Future
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Ch.3 TYPES OF PLASTIC MONEY
Different types:-
Credit card
• A credit card is plastic money that is used to pay for products and
services at over 20 Million locations around the world. All you need
to do is produce the card and sign a charge slip to pay for your
purchases. The institution which issues the card makes the payment to
the outlet on your behalf; you will pay this 'loan' back to the
institution at a later date.
Debit card
• Debit cards are substitutes for cash or check payments, much the
same way that credit cards are. However, banks only issue them to
you if you hold an account with them. When a debit card is used to
make a payment, the total amount charged is instantly reduced from
your bank balance.
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• Don't borrow on your credit card! Here's why
• A debit card is only accepted at outlets with electronic swipe-
machines that can check and deduct amounts from your bank balance
online.
Charge card
• A charge card carries all the features of credit cards. However, after
using a charge card you will have to pay off the entire amount billed,
by the due date. If you fail to do so, you are likely to be considered a
defaulter and will usually have to pay up a steep late payment charge.
• When you use a credit card you are not declared a defaulter even if
you miss your due date. A 2.95 per cent late payment fees (this differs
from one bank to another) is levied in your next billing statement.
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Amex card
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Global card
Co-branded card
• Co-branded cards are credit cards issued by card companies that have
tied up with a popular brand for the purpose of offering certain
exclusive benefits to the consumer.
• A debit card with a difference
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• For example, the Citi-Times card gives you all the benefits of a
Citibank credit card along with a special discount on Times Music
cassettes, free entry to Times Music events, etc.
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Smart card
Photo card
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Ch.4 CREDIT CARD
INTRODUCTION
DEFINITION:-
The credit card can be defined as “A small plastic card that allows its
holder to buy goods and services on credit and to pay at fixed intervals
through the card issuing agency.
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MEANING:-
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ADVANTAGES & DISADVANTAGES OF
CREDIT CARD
a) A credit card is an integral part of banks major services these days. The
credit card provides the following advantages to the bank: the system
provides an opportunity to the bank to attract new potential costumers.
b) To get new customers the bank has to employee special trained staff. This
gives the bank an opportunity to find the latent talent from among existing
staff that would have been otherwise wasted.
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d) This also provides additional customer services to the existing clients. It
enhances the customer satisfaction.
e) More use by the car holder and consequently the growth of banking habits
in general.
f) Better network of card holders and increased use of cards means higher
popularity and image of the bank
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c) Months purchases can be settled with a single remittance, thus, tending to
reduce bank and handling charges.
d) The card holder has the period of free credit usually between 30-50 days
of purchase
e) Cash can usually be obtained with the card, either on card account or by
using it as identification when encasings a cheque at the bank.
g) The credit card saves trouble and paper work to traveling business man.
c) The retailers gain from the impulse buying and trading up the tendency to
buy the bigger or better article
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e) Suppliers/sellers no longer have to send reminders of outstanding debits.
a) Some credit card transactions take longer time than cash transactions
because of various formalities.
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d) The cardholder is responsible for charges due to loss or theft of the card
and the bank may not be party for loss due to fraud or collusion of staff, etc
f) It might lead to spending habits and cardholders may end up in big debts
i) Avoid the entire cost and security problem involved in handling cash.
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MARKETING STRATEGIES
Why? Experts make more money and get more media attention and
that’s free advertising! Let’s face it; it’s easier to trust a specialist than a
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generalist who’s trying to be everything to everyone. Once you’ve identified
your niche, let the world know about how you can help. Provide free
information products, write articles and white papers about the problems
your clients face and how they can solve them.
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Institute a system to keep track of all of the people who are
interested in your product or services, and find creative ways
of keeping in touch with them on a regular basis.
To start, go through your notes. Put together a list of all of the people
you’ve spoken to in the last 6-9 months who’ve showed interest in you but
haven’t become paying customers. Follow up with them in a variety of
ways: call them to touch base, use email, ask them to subscribe to a
newsletter, send them interesting articles, or invite them to join you at
events. It takes numerous impressions to make the sale; that’s why you see
commercials on TV over and over again for the same products.
• Ask them for referrals - right away (if you were a car salesman you
wouldn’t wait for the new car to get dirty and dented!)000000000000
• Ask them to write testimonials for you, (also right away) and compile a list
of testimonials to use in your all of your marketing collateral.
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Create a marketing calendar and keep to it consistently.
It’s much easier to get business from customers who are already
happy with your services or products. So develop additional services or
products to keep customers coming back for more.
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STEPS FOLOWED IN CREDIT CARD
TRANSACTION
1. AUTHORIZATION
2. Merchant balancing
• This is also known as batching out. Most pos terminals and all
payment gateway per firm an auto close functions at the and of the
day and batch out automatically.
3. Capture
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4. Clearing
• During this stage the back end processor performs compliance checks
and risk management procedures and transmits the transaction to
V/MC or to the appropriate card issuer for other card types.
6. Settlement
• During this stage the Issuing Bank calculates fees and deductions and
routs the net funds to the appropriate Card Issuer which determines
the daily deposits for the merchants.
7. Merchant ACH
• During this stage the acquiring bank or card issuer transmits the
merchant deposit to the merchant’s checking account.
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Different Types of Credit Cards
Credit cars are of various types, every one has to select credit cards on
the basis of the pros and cons of each type of credit card and at the same
time the nature of use. This article gives an insight into the several types of
credit cards available in the market
Today, credit card customers enjoy more options and choices than ever
before. To gain new customers, credit card companies compete by offering
new services and cards to customers. No matter what your needs, chances
are good that there is a card out there that would be ideal for you. If you are
looking for the right card, you can begin by considering the many types of
cards available to you:
These types of credit cards offer very low interest. In some cases,
these cards just charge a few percent interests. The reasons for this are
numerous. In most cases, the low interest rate is for a limited time only.
After a set number of months, you will begin paying higher interest rates. In
some cases, low interest credit cards are not really credit cards at all - they
are debit cards linked to a low-interest loan such as a line of credit. Check
your agreement to find out what type of card you have. If you need to
consolidate debts or if you like the idea of having low interest for a while,
this type of credit card can be perfect for you.
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Instant Approval Credit Cards
These cards are really a product of our fast-paced society. The idea
behind this type of credit card is that once you fill out your application, you
will be told whether you are approved or not right away. The approval
process only takes a few minutes. Instant approval credit cards are very
popular online and applicants can apply via the internet or over the phone.
If you are very impatient or need credit right away, these types of
cards can be for you. However, you should be aware that these cards do not
guarantee that you will be approved right away - sometimes, more time is
needed to process your application. Another drawback to these cards is that
they rely heavily on your credit score. If you have poor credit or any
extenuating financial circumstances, these types of cards may not be for
you.
If you are in debt, a balance transfer card can be a great way to get out
of debt. It offers the convenience of one bill and low rates. However, some
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cards have high fees. Also, if you run up your other cards after consolidating
your debts or if you are unable to pay off your new card in the limited time
before the low interest rate increases, you may find yourself even more in
debt than before.
These types of cards are really a marketing tool for card companies.
Companies know that customers love rewards and prizes and so offer these
enticements to lure customers. The major advantage of these cards is that
they can help you get more cash value for your money. They can also be fun
and rewarding for almost any credit card customer. However, not all reward
credit cards are a deal. Some charge high fees to offset the costs of the
bonuses. Some also have very low points systems, meaning that you need to
spend a lot with your credit card to get any rewards at all. Read the fine print
carefully before signing.
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Cash Back Credit Cards
Cash back credit cards give you money rewards. When you make a
purchase with this type of credit card, you get some points based on the
amount of money you have spent with your credit card. When you
accumulate enough points, you get cash back. On most cards, you can get
back about 1% of your total purchases.
These cards are great for those who are budget-conscious as they give
you some money back from your purchases. However, there are several
drawbacks to these types of cards. Some cards have low cash-back
percentage rates. Some charge high fees or have limits on how much money
you can get back each year. Most cards only offer you cash back advantages
on purchases - not on your balance. If you decide this card is right for you,
do compare several card offers to find the best cash back credit card option.
This type of card allows you to accumulate frequent flyer points on all
your credit card purchases. If you travel a lot or love to travel, this card can
help you accumulate points for a free trip or for a discount ticket. In many
cases, these cards are great because they allow you to gather points for every
purchase. However, these cards can also charge high fees. In some cases,
your points will expire if you do not use them within a specified time.
Worse, some airline credit cards make use of a point system that is not very
user-friendly. You may have to slowly accumulate an enormous amount of
points to qualify for a trip. If you do not love to travel and if you do not use
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your Credit card a lot, then, your ability to get rewards you like may be very
limited.
These cards are sometimes called junior credit cards. They are not
truly credit cards at all, since you are not getting credit or loans from the
credit card company. Instead, these cards work by having you deposit some
money into the card account. You can then use your card to charge any
amount up to the amount in the account. When you add more money, you
can charge more to your card.0000000000000000000000000000000000
Secured credit cards use collateral to ensure that the card company
will be paid back. Often, these cards are used by people with no credit or
bad credit. With secured credit cards, you can enjoy credit card convenience
even if you do not qualify for traditional cards. However, you will also have
to cope with the additional fees and low credit limits that these credit cards
have.
Bad credit credit cards are designed for people with poor credit
histories. These cards generally have very low credit limits and charge extra
fees. This is because they are designed for people who are considered far
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less likely to repay their debts. If you have a bad credit rating, these types of
credit cards can be a great way to rebuild your credit history. These cards
can also allow you to have credit even if you would be rejected for most
other cards due to your credit history.
Student credit cards are cards meant to attract college and university
students. These cards often offer sign-up bonuses for students. They are also
easier to apply for, since credit card companies recognize that students have
much shorter credit histories than the average customer.000000000000
If you are a student, student credit cards can be a great option. They
are simple to use and can help you build a good credit rating before you
graduate. However, there are some disadvantages to student credit cards.
These cards may have no reward programs and may have fewer benefits,
including fewer bonuses and services, than other cards.
Business credit cards are created especially for business use. They
offer many of the same advantages as traditional credit cards, but also offer
services that can really help a business. With some business credit cards, for
example, you can enjoy higher interest rates, extra cards for business
employees, monthly reports on your expenses, and services that let you keep
your personal and business expenses separate on the same card. These
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advantages mean that using this card for your business is more convenient.
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Silver Cards
Silver credit cards rank lowest among the metal named cards, and,
because of lower prestige when compared to gold and platinum cards, are
commonly known as basic and standard credit cards. Silver credit cards
come with advantages such as lower annual membership fees if there is any,
and a lower threshold salary which banks use to evaluate your application in
case you should apply.
Silver credit cards will provide you with almost the same credit limit
as other cards provided you have a good credit history. You can also avail of
0% interest balance transfer schemes which are made available for a period
of 6-9 months for silver card holders.
There are also some disadvantages to using silver credit cards. One
would be the lower cash advance limits, less rewards and promotional
packages, and less travel perks compared to gold and platinum cards. HDFC
Bank, ICICI offer silver credit cards through their HDFC Bank Silver cards
and ICICI Sterling Silver credit card
Gold and platinum credit cards are a status symbol for any credit card
holder, bringing prestige since getting gold and platinum cards usually
require that you have good credit rating and a higher income levels. Gold
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and platinum cards offer higher limit for cash advance withdrawals and
sometimes can provide higher credit limits as compared to standard or silver
cards.
If you have a gold or platinum card, you also get better perks and
privileges such as travel insurance, extended warranties for appliance
purchases and special deals on specific products, and purchase protection
insurance.
You can also engage in some loyalty schemes that are offered for gold and
platinum credit card holders which can sometimes involve cash back promos
and reward points systems.
Some popular gold and platinum cards available are the American Express
Gold card, and the ICICI Solid Gold Credit Card.
It is not possible to cover them the exact offerings of these cards but I
will highly advice you to check all these websites of the banks to get all the
info about the credit cards they are offering. Also try to talk to your friends
who are having credit cards to get more info.
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Types of Credit
Cards offered
By
Indian Banks
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Credit Card Data
Credit Card is either Visa or MasterCard which is the Most popular and in
some instance American Express.000000000000000000000000000000
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Ch.5 DEBIT CARD
Like credit cards, debit cards are used widely for telephone and
Internet purchases and, unlike credit cards, the funds are transferred
immediately from the bearer's bank account instead of having the bearer pay
back the money at a later date.
Debit cards may also allow for instant withdrawal of cash, acting as
the ATM card for withdrawing cash and as a cheque guarantee card.
Merchants may also offer cash back facilities to customers, where a
customer can withdraw cash along with their purchase.
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Online Debit System
Online debit cards require electronic authorization of every
transaction and the debits are reflected in the user’s account immediately.
The transaction may be additionally secured with the personal identification
number (PIN) authentication system and some online cards require such
authentication for every transaction, essentially becoming enhanced
automatic teller machine (ATM) cards. One difficulty in using online debit
cards is the necessity of an electronic authorization device at the point of
sale (POS) and sometimes also a separate PIN pad to enter the PIN, although
this is becoming commonplace for all card transactions in many countries.
Overall, the online debit card is generally viewed as superior to the offline
debit card because of its more secure authentication system and live status,
which alleviates problems with processing lag on transactions that may only
issue online debit cards. Some on-line debit systems are using the normal
authentication processes of Internet banking to provide real-time on-line
debit transactions. The most notable of these are Ideal and POL.
Offline debit cards have the logos of major credit cards (e.g. Visa or
MasterCard) or major debit cards (e.g. Maestro in the United Kingdom and
other countries, but not the United States) and are used at the point of sale
like a credit card (with payer's signature). This type of debit card may be
subject to a daily limit, and/or a maximum limit equal to the
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current/checking account balance from which it draws funds. Transactions
conducted with offline debit cards require 2–3 days to be reflected on users’
account balances. In some countries and with some banks and merchant
service organizations, a "credit" or offline debit transaction is without cost to
the purchaser beyond the face value of the transaction, while a small fee
may be charged for a "debit" or online debit transaction (although it is often
absorbed by the retailer). Other differences are that online debit purchasers
may opt to withdraw cash in addition to the amount of the debit purchase (if
the merchant supports that functionality); also, from the merchant's
standpoint, the merchant pays lower fees on online debit transaction as
compared to "credit" (offline) debit transaction.
Prepaid debit cards, also called reload able debit cards or reload able
prepaid cards, are often used for recurring payments. The payer loads funds
to the cardholder's card account. Prepaid debit cards use either the offline
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debit system or the online debit system to access these funds. Particularly
for companies with a large number of payment recipients abroad, prepaid
debit cards allow the delivery of international payments without the delays
and fees associated with international checks and bank transfers. Providers
include Caxton FX prepaid cards, [Escape prepaid cards and Travelex
prepaid cards. [ Whereas, web-based services such as stock photography
websites (stockpot), outsourced services (odes), and affiliate networks
(Media Whiz) have all started offering prepaid debit cards for their
contributors/freelancers/vendors.
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BENEFITS & FEATURES OF DEBIT CARDS
• NO BACKGROUND CHECK
When we are applying for a debit card, the ban does not need to look into
our credit history. All we need is the documentation to open a bank, account,
and money in our bank when we use our debit card.
• CASH WITHDRAWALS
The customer can withdraw a minimum of Rs. 100/- and a maximum Rs.10,
000/- per day
• CONVENIENCE
A Debit card fees us from carrying a lot of cash or a cheque book. In case,
we are an international traveler, we don’t need to stock up on Traveler’s
Cheques or cash. We can use our debit card to withdraw Cash from over
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500,000 ATMs around the world in over 100 countries. We can withdraw in
the local currency of the country we are in, limited only by the money we
have back home in our account, and Business Travel Quota (BTQ) limit
arability.
• FAIR EXCHANGE
If we return merchandise or cancel services paid for with a Debit card, the
transaction is treated as if it were made with cash or a check. Customers
usually get cash back for offline purchases; for on-line transactions, the
amount is credited to our account.
• STATEMENT OF ACCOUNT
Your Debit card can be used as ATM card at any ATM across the world, as
well as for making purchase at merchant locations. You can also withdraw
cash from any of the 12000 ATMs in India.
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FEATURES OF DEBIT CARD
B) The Debit Card services in meant for withdrawals against the balance
already available in the designated account.
D) A Debit card is more affordable than credit card. We just our bank
account for all our transactions. No credit period. Our bank account is
debited immediately.
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Process Debit Card Transactions
If you choose to accept debit cards offline, be sure that the debit card
has a VISA or MasterCard logo. Otherwise, the debit card won’t be
approved and you won’t be able to process the debit card offline
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An online debit card transaction works much like a credit card
transaction, except that after your customer swipes his or her debit card, they
will enter a PIN instead of signing the receipt.
For example, you pay a flat fee for each debit card transaction that
you process, instead the flat fee plus percentage rate that you are charged
when you accept credit cards. Over time, this can potentially save you a lot
of money. 0000000000000000000000000000000000000000000000000
Another advantage when you process debit cards is that you can’t be
charged higher “downgrade” fees.
But when you accept debit cards, you always pay the same flat rate,
with no danger of the rate increasing.
You can also cut down on checkout time when you accept debit cards.
It takes an average of 30 seconds to hand over the pen, wait for the customer
to sign the receipt, and then take the pen back.
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If you process 20 credit card transactions a day, you’re losing 100
minutes a day just passing a pen back and forth! That’s almost two hours.
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Plastic Fraud
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Ch.6 Advantages & Disadvantage
Advantages
Plastic money, unlike paper money, will not burn easily and can resist
higher temperatures than paper money.
Plastic money, unlike paper money, will not burn easily and can resist
higher temperatures than paper money.
Paper money also picks up dirt and stains more easily than plastic
money.
Plastic money is the debit and credit cards. Plus point of plastic money is
that you won't have to carry your cash around all the time.
It also doesn't wear after time as paper does nor does it rip and tear.
Give you incentives, such as reward points, that you can redeem.
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and over the telephone.
Disadvantage
Cost much more than other forms of credit, such as a line of credit or a
It also doesn't wear after time as paper does nor does it rip and tear.
Paper money also picks up dirt and stains more easily than plastic
money.
cheaper to make.
Its disadvantage is that, some extra money will be deducted for the
bank services.
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It’s around 2.5% of the money you spent.
One of the most important features that Plastic Money offers is the
technology associated with this business.
Credit card businesses rely on very reliable and secure technology and
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There is an immense need of reliable wide area connectivity and this
market is so huge and lucrative that it can accommodate many more
industry giant
The Basics
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Investigation
Felony
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fraud and is convicted of a felony the result could be being deported to their
country of origin.
Ch.9 CONCLUSION
They also need to identify potential customers and target those using
mailers. As internet is growing at a fast rate the net users can be targeted by
having interactive sites. The prospective company’s card personality could
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also be used in the home page to solve customer queries in the ‘Best
Possible Manner’.
Ch.10 BIBLIOGRAPHY
BOOKS
WEBSITE
WWW.GOOGLESERCH.COM
WWW.YAHOO.COM
WWW.RBI.ORG
WWW.WIKIPEDIA .COM
WWW.INFOSEE.COM
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WWW.INDIANMBA.COM
WWW.INDINBANKING.ORG
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