CHAPTER-1

INTRODUCTION

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Introduction to Plastic Money

Plastic money or polymer money, made out of plastic, is a new and easier way of paying
for goods and services. Plastic money was introduced in the 1950s and is now an essential
form of ready money which reduces the risk of handlings a huge amount of cash. It includes
Debit cards, ATMs, smart cards, etc. Credit cards, variants of plastic money, are used as
substitutes for currency.

MEANING

Plastic money refers to credit cards, we use them whenever we want and pay later (with
interest, of course). It makes it too easy for us to buy things we normally could not afford,
which makes it easier to get into debt.

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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History of Credit Cards and Debit Cards In Plastic Money

Credit cards have evolved into a safe and secure manner to purchase goods and services.
The internet has given credit card users additional purchasing power. Banks have options like
cash-back rewards, saving plans and other incentives to entice people to use their cards. Debit
cards allow people the convenience of cards without the worry of racking up debt. The
convenience, security and rewards offered by credit and debit cards keep shoppers using their
cards as opposed to cheques or cash.

Credit Card Origins

The first credit cards were issued by individual stores and merchants. These cards were
issued in limited locations and only accepted by the business that issued them. While the
cards were convenient for the customers, they also provided a customer loyalty and customer
service benefit, which was good for both customer and merchant. It was not until 1950 that
the Dinner‘s Club card was created by a restaurant patron who forgot his wallet and realized
there needed to be an alternative to cash only. This started the first credit card specifically for
widespread use, even though it was primarily used for entertainment and travel expenses.

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 till 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.

Bank Card Associations

In 1966, Bank of America created a card that was a general purpose card or "open loop" card.
These "closed loop" agreements limited cards like Diners Club and American Express to
certain merchants, unlike the new ―open loop‖cards.
The new general purpose system required interbank cooperation and additional regulations.
To his created additional safety features and began building the credit card system of today.

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Two systems emerged as the leaders--Visa and Master Card. However, today there is little
difference between the two and most merchants accept both card associations.

Debit Cards Emerge

The Visa association of cards took credit cards to a new level in 1989when they introduced
debit cards. These cards linked consumers to their 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

There were almost 29 million debit card users as of 2006, with a projected 34.4 million users
by 2016. However, online services like PayPal are emerging as a way for people to pay their
debts in new, secure and convenient ways. Technology also exists to have devices implanted
into phones, keys and other everyday devices so that the ability to pay at the point of sale is
even more convenient.

TYPES OF PLASTIC MONEY

Different types of Plastic money are:-

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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 we need to do is produce the card and sign a charge slip to
pay for our purchases. The institution which issues the card makes the payment to the outlet
on our behalf; we will pay this ‗Loan‘ back to the institution at a later date.

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Debit card

Debit cards are substitutes for cash or cheque payments, much the same way that credit cards
are. However, banks only issue them to us if we hold an account with them. When a debit
card is used to make a payment, the total amount charged is instantly reduced from our bank
balance.

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.

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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.

Amex card

Amex stands for American Express and is one of the well-known charge cards. This card has
its own merchant establishment tie-ups and does not depend on the network of MasterCard or
Visa. Credit cards: Remember these dos and don'ts.

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This card is typically meant for high-income group categories and companies and may not be
acceptable at many outlets. There are a wide variety of special privileges offered to Amex

cardholders.

Dinner club card

Diners Club is a branded charge card. There are a wide variety

of special privileges offered to the Diners Club cardholder. For instance, as a cardholder you
can set your own spending limit.Besides, the card has its own merchant establishment tie-ups
and does not depend on the network of MasterCard or Visa.

However, since this card is typically meant for high-income groupcategories, it may not be
acceptable at many outlets. It would be agood idea to check whether a member establishment
does accept the card or not in advance.

Global card

Global cards allow you the flexibility and convenience of using a credit card rather than cash
or travellers cheque while travelling abroad for either business or personal reasons.
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Co-branded card

Co-branded cards are credit cards issued by card companies that

havetied up with a popular brand for the purpose of offering certain exclusive benefits to the
consumer. A debit card with a difference

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.

Master card & Visa

MasterCard and Visa are global non-profit organizations dedicated to promote the growth of
the card business across the world.

They have built a vast network of merchant establishments so that customers worldwide may
use their respective credit cards to make various purchases.

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Smart card

A smart card contains an electronic chip which is used to store cash. This is most useful when
you have to pay for small purchases, for example bus fares and coffee. No identification,
signature or payment authorization is required for using this card.

The exact amount of purchase is deducted from the smart card during payment and is
collected by smart card reading machines. No change is given. Currently this product is
available only in very developed countries like the United States and is being used only
sporadically in India.

Photo card

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If your photograph is imprinted on a card, then you have what is known as a photo card.
Doing this helps identify the user of the credit card and is therefore considered safer. Besides,
in many cases, your photo card can function as your identity card as well.

CREDIT CARD INTRODUCTION

A credit card is a small plastic card issued to users as a system of payment. It allows its
holder to buy goods and services based on the holder's promise to pay for these goods and
services. The issuer of the card grants a line of credit to the consumer or the user) from which
the user can borrow money for payment to a merchant or as a cash advance to the user. Usage
of the term "credit card" to imply a credit card account is a metonym. When a purchase is
made the user would indicate consent to pay by signing a receipt with a record of the card
details and indicating the amount to be paid. Issuer agrees to pay the merchant and the credit
card user agrees to pay the card issuer.

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.

MEANING:-

A credit card is a card or mechanism which enables card holder to purchase goods, travels
and dine in a hotel without making immediate payments. The holders can use the cards to get
credit from banks up to 45days.

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 The credit card relieves the consumers from the botheration of carrying cash and ensures
safety. It is a convenience of extended credit without formality. Thus credit card is a passport
to, ―safety, convenience, prestige and credit.

Advantages of Credit Card

The benefits of credit card can be grouped as follows:

(A) BENEFITS TO BANK

 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 customers.
 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.
 The most important function of a credit card, however, is simply to yield direct profit for
the bank. There is a scope and a potential for a better profitability out of income/
commission earned from the traders turn over.
 This also provides additional customer services to the existing clients. It enhances the
customer satisfaction.
 More use by the car holder and consequently the growth of banking habits in general.
 Better network of card holders and increased use of cards means higher popularity and
image of the bank
 Savings of expense on cash holdings, i.e. stationery, printing and
man power to handle clearing transactions while considerably is reduced.

(B) BENEFITS TO CARD HOLDER

The principal benefits to a card holder are:

 He can purchase goods and services at a large number of outlets

withoutcash or cheque. The card is useful in emergency, and can saveembarrassment.
 The risk factor of carrying and storing cash is avoided. It is convenientfor him to carry
credit card and he has trouble free travel and may purchasehis without carrying cash
or cheque.

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 Months purchases can be settled with a single remittance, thus, tending to reduce bank
and handling charges.
 The card holder has the period of free credit usually between 30-50 days of purchase.
 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.
 Availing credit with minimum formality.
 The credit card saves trouble and paper work to travelling businessman.

(C) Benefits to the Merchant Establishment

The principal benefits offer credit card to the retailer is:-

 This will carry prestigious weight to the outlets.

 Increases in sale because of increased purchasing power of the card holder due to
unbilled credit available to the card holder.
 The retailers gain from the impulse buying and trading up the tendency to buy the bigger
or better article.
 Credit card ensures timely and certainly of payments.
 Suppliers/ sellers no longer have to send reminders of outstanding debits.
 Systematic accounting since sales receipts are routed through banking channels.
 Advertising and promotional support on national scale.
 Development of prestigious clientele base.

Disadvantages of credit card

The following are the common disadvantages of the credit card:

 Some credit card transactions take longer time than cash transactions because of
various formalities.
 The customer tends to overspend out of immerse happiness.
 Discounts and rebates can rarely be obtained.

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  The cardholder is responsible for charges due to loss or theft of the cardand the bank
may not be party for loss due to fraud or collusion of staff, etc
 Customers may be denied cash discount for payment through card.
 It might lead to spending habits and cardholders may end up in big debts
 Avoid the entire cost and security problem involved in handling cash.
 Losses to bad debts and reduced an additional liquidity is
 It also allows him to delegate spending power to add on members
 Credit card is considered as a status symbol.

How card processing works

When a customer pays for products or services with a credit card, the card information is
recorded — either by manual entry, a card imprinter, point-of-sale (POS) terminal, or virtual
terminal—and then verified so that the merchant can receive payment for the transaction.

This process involves the following parties:

Cardholder:

The owner of the card used to make a purchase

Merchant:

The business accepting credit card payments for products or services sold to the cardholder

Acquirer:

The financial institution or other organization that provides card processing services to the
merchant

Card association:

A network such as VISA or MasterCard (and others) that acts as a gateway between the
acquirer and issuer for authorizing and funding transactions

Issuer:

The financial institution or other organization that issued the credit card to the cardholder.

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The flow of information and money between these parties — always through the card
associations — is known as the interchange, and it consists of a few steps:
1. Authorization:-
The cardholder pays for the purchase and the merchant submits the transaction to the
acquirer. The acquirer verifies with the issuer — almost instantly — that the card number
and transaction amount are both valid, and then processes the transaction for the cardholder.

2. Batching:-
After the transaction is authorized it is then stored in a batch, which the merchant sends to the
acquirer later to receive payment (usually at the end of the day).

3. Clearing and settlement:-

The acquirer sends the transactions in the batch through the card association, which debits the
issuers for payment and credits the acquirer. In effect, the issuers pay the acquirer for the
transactions.

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4. Funding:-
Once the acquirer has been paid, the merchant receives payment. The amount the merchant
receives is equal to the transaction amount minus the discount rate, which is the fee the
merchant pays the acquirer for processing the transaction.

The entire process, from authorization to funding, usually takes about 3 days. However,
Merchant Card Processing from some banks and financial institutions can offer next-day
deposits to their customers with a business checking account.

In the event of a chargeback (when there's an error in processing the transaction or the
cardholder disputes the transaction), the issuer returns the transaction to the acquirer for
resolution. The acquirer then forwards the chargeback to the merchant, who must either
accept the chargeback or contest it.

Different Types of Credit Cards - Know Which One to Go For

Credit cars are of various types, everyone 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

What are instant approval credit cards?

What is the principle behind reward credit cards

How do cash back credit cards work?

How prepaid credit cards can be made use of?

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

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for you. If you are looking for the right card, you can begin by considering the many types of
cards available to you:

1. Low Interest Credit Cards

These types of credit cards offer very low interest. In some cases, these cards just charge a
few percent interest. 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.

2. 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.

3. Balance Transfer Cards

Balance transfer cards are a type of temporary low-interest card that is meant to help you
consolidate your debt. They work this way: if you have several credit cards with a balance,
you can get a balance transfer card. You then transfer all your credit card debt onto the new
card and work to pay it off. Since the new card has a low interest rate, you can quickly repay
your bills.

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 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

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card in the limited time before the low interest rate increases, you may find yourself even
more in debt than before.

4. Rewards Credit Cards

Rewards credit cards offer you points, rewards, or bonuses for every cash purchase made
with your credit card over time. As you accumulate rewards or points, you can redeem your
bonus for entertainment events, purchases, travel, and other fun prizes. Some cards even offer
customers extra automatic-enter sweepstakes and draws. Each time you use your card, you
are entered into a draw to win specific prizes.

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.

5. 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.

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 6. Airline Credit Cards

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 your credit card a lot, then, your ability to get rewards you like
may be very limited.

7. Secured Credit Cards

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.

8. Credit Cards for Bad Credit

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 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.

9. Student Credit Cards

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.

If you are a student, student credit cards can be a great option. They are simple to use and can

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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.

10. Business Credit 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 advantages mean that
using this card for your business is more convenient.

If you own a business, you may wish to consider this type of card. The only real disadvantage
of business cards is that there are so many of them. Some cards offer fewer features and some
charge businesses additional fees for bonuses and services. You can avoid these problems by
seeking out the best possible business credit cards for your needs.

Now that you understand the different types of credit cards, you can make the right credit
card decision for yourself. Knowing which cards are right for you can help empower you to
make the right financial choices.

Types of Credit card offered by Indian banks

I. 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.
Onewould be the lower cash advance limits, less rewards and promotional packages, and less

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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

II. Gold and Platinum Cards

Gold and platinum credit cards are a status symbol for any credit
cardholder, bringing prestige since getting gold and platinum cards usually require that you
have good credit rating and a higher income levels. Gold

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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DEBIT CARD

A debit card (also known as a bank card or check card) is a plastic card that provides the
cardholder electronic access to his or her bank account(s) at a financial institution. Some
cards have a stored value with which a payment is made, while most relay a message to the
cardholder's bank to withdraw funds from a designated account in favour of the payee's
designated bank account. The card can be used as an alternative payment method
to cash when making purchases. In some cases, the primary account number is assigned
exclusively for use on the Internet and there is no physical card.

In many countries the use of debit cards has become so widespread that their volume has
overtaken or entirely replaced checks and, in some instances, cash transactions. The
development of debit cards, unlike credit cards, has generally been country specific resulting
in a number of different systems around the world, which were often incompatible. Since the
mid 2000s, a number of initiatives have allowed debit cards issued in one country to be used
in other countries and allowed their use for internet and phone purchases.

However, unlike credit cards, the funds paid using a debit card are transferred from the
bearer's bank account, instead of having the bearer pay back the money at a later date.

Debit cards usually also allow for instant withdrawal of cash, acting as the ATM card for
withdrawing cash. Merchants may also offer cash back facilities to customers, where a
customer can withdraw cash along with their purchase.

Types of Debit Card Systems

I. 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

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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 POLl.

II. Offline Debit System

Offline debit cards have the logos of major credit cards (for example, Visa or MasterCard) or
major debit cards (for example, 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
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 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.

III. Electronic Purse Card System

Smart-card-based electronic purse systems (in which value is stored on the card chip, not in
an externally recorded account, so that machines accepting the card need no network
connectivity) are in use throughout Europe since the mid-1990s, most notably in Germany
(Geldkarte), Austria (Quick Wertkarte), the Netherlands (Chipknip), Belgium (Proton),
Switzerland (CASH) and France (Mon€o, which is usually carried by a debit card). In Austria
and Germany, all current bank cards now include electronic purses.

IV. Prepaid debit cards

Prepaid debit cards, also called reloadable debit cards, appeal to a variety of users. The
primary market for prepaid cards are unbanked people,[citation needed] an umbrella term

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used to describe diverse groups of individuals- typically with poor credit ratings- who do not
use banks or credit unions for their financial transactions.

The advantages of prepaid debit cards include being safer than carry cash, worldwide
functionality due to Visa and MasterCard merchant acceptance, not having to worry about
paying a credit card bill or going into debt, the ability for anyone over the age of 18 to apply
and be accepted without regard to credit quality and the ability to direct deposit paychecks
and government benefits onto the card for free.

Some of the first companies to enter this market were MiCash, RushCard and Netspend who
gained high market share as a result of being first to market. However, in the past few years
there have been several new providers such as TransCash, 247card and iKobo that carry a
number of other benefits, such as money remittance service, card-to-card transfers and the
ability to apply without a social security number.

BENEFITS OF THE DEBIT CARD

1. FREE WITH OUR BANK ACCOUNT

Obtaining a debit card is easy. If we qualify to open a bank account, weusually get a debit
card, if our bank offers the service.•

2. 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.

3. CASH WITHDRAWALS

The customer can withdraw a minimum of Rs. 100/- and a maximum Rs.10, 000/- per day .

4. CONVENIENCE

A Debit card fees us from carrying a lot of cash or a cheque book. In case, we are an
international traveller, we don‘t need to stock up on Traveller‘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 are ability.

5. 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.•

6. STATEMENT OF ACCOUNT

A statement of transactions can be obtained from the customer‘s branch. For example, a mini
statement containing the last four transactions and balance can be obtained at a State Bank
Group during the working hours of the customer‘s branch.

7. BANKING CUM SHPPING CARD

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.

WIDELY ACCEPTED, INTERNATIONALLY VALID

Features of Debit card

The following are features of Debit Cards

 It is a combination of a cheque and ATM card. Therefore, there are no fees for using the
ATM for cash withdrawal, or as a debit card for purchase.
 The debit card service is meant for withdrawals against the balance already available in
the designated account.
 It is the card holder‘s obligation to maintain sufficient balance in the designated account
to meet withdrawals and service charges.
 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.
 No credit cheque is required to get a debit card.

26
 Use of card is terminated without notice, upon the death, bankruptcy or insolvency of the
cardholder or for other valid reasons.
 Spending is limited to our bank balance.

Process Debit Card Transactions

A successful business will usually accept debit cards as a part of their overall profile of
payment solutions. If you don‘t process debit cards, you may not be taking full advantage of
all the potential that your merchant account can deliver. There are essentially two ways you
can accept debit cards, online and offline.

Off line debit card transactions

An offline debit card transaction is still the way most merchants accept debit cards. This is
essentially the same as processing credit cards. You swipe your customer‘s debit card through
a credit card terminal and have them sign the receipt. 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

Online debit card transactions

The most advantageous way to process debit cards is to do it online. You will still be able to
accept debit cards at the point of sale, but you will need to install a PIN pad on your credit
card terminal.

An online debit card transaction works much like a credit cardtransaction, except that after
your customer swipes his or her debit card, they will enter a PIN instead of signing the
receipt. At this point the encrypted debit card information is sent to the customer‘s bank for
authorization, and you‘ll receive the funds just as you would for a credit card transaction.
Your business has many advantages when you accept debit cards. For example, you pay a flat

27
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. Another advantage when you process debit cards is that you can‘t be charged
higher ―downgrade‖ fees. In a credit card transaction, you are usually charged the ―discount
rate.‖ However, some transactions are considered to be a higher risk or expense to the bank,
and you are charged a higher rate as a result. 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.

If you process 20 credit card transactions a day, you‘re losing 100minutes a day just passing a
pen back and forth! That‘s almost two hours.

Plastic Fraud

State-of-the-art thieves are concentrating on plastic cards. In the past, this type of fraud was
not very common. Today, it is a big business
for criminals. Plastic cards bring new convenience to your shopingand banking, but they can t
urn into nightmares in the wrong hands. This pamphlet describes credit and debit cards and so
me common schemesinvolving card fraud with tips to help you avoid them

The following are the types of frauds

1. Stolen Cards at the Office

2. Extra Copies of Charge Slips

3. Discarded Charge Slips

4. Unsigned Credit Cards

5. Loss of Multiple Cards

6. Strange Requests for Your PIN Numbers

7. Legitimate Cards

8. Altered Cards

9. Counterfeit Cards

28
Advantages of Debit Card

 Plastic money, unlike paper money, will not burn easily and can resist higher
temperatures than paper money.
 You have no fear to be theft. And its easy to use.
 Paper money also picks up dirt and stains more easily than plastic money.
 Plastic money is the debit card 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 not rip and tear.
 Give you incentives, such as reward points,that you can redeem.
 Be more convenient to carry than cash.
 Provide a convenient payment method for purchases made on the internet an over the
telephone.
 Help you establish a good credit history.

Disadvantages of Debit card

 Cost much more than other forms of credit, such as a line of credit or a personal loan, if
you don‘t pay on time.
 Damage your credit rating if your payment are late.
 Allow you to build up more debt than you can handle.
 Have complicated terms and conditions.
 It‘s around 2.5% of the money you spent.
 Some extra money will be deducted for the bank services.
 It is cheaper to make.

29
CASE STUDY

What Happens in Credit Card Fraud Cases?

The Basics

A variety of crimes constitute credit card fraud. The term can describe a person using a stolen
credit card to purchase goods or services posing as the person named on the card. It can also
describe illegally and fraudulently withdrawing funds from an account that is not yours.
Identity theft, which is the act of posing as an individual to make purchases, is often
classified together with credit card fraud. A victim of credit card fraud can sometimes see
bank accounts emptied of all their funds or negative marks going on her credit report for
things she had nothing to do with. Many banks will monitor transactions made with a credit
card and alert the person named on the account of any potentially suspicious activity. This is
to protect the bank or Credit Card Company just as much as it is to protect the customer.

Investigation

Exactly what happens during a credit card fraud case depends a great deal on the actions of
the credit card company or bank involved. If fraudulent transactions are proven to have been
made on a person‘s account but the amount of the transactions is lower than the cost of an
investigation the company can credit the money back to a person and then close the account
to protect from further harm.

If the amounts of fraudulent charges are so great that an investigation is warranted, the police
will be noticed. The credit card company can look at a listof the fraudulent charges and
determine where they were made. At that point an officer can question witness and review
security camera footage in an attempt to identify suspects. If a suspect is arrested he can be
tried in a court of law.

30
CONCLUSION

21st Century banking has become wholly customer driven &

technology driven by challenges of competition, rising customer expectations & shrinking
margins, banks have been using technology to reduce cost & enhance efficiency, productivity
& customer convenienence. Technology intensive delivery channels like net banking, mobile
banking, etc have created a win-win situation by extending great convenienence. &multiple
options for customer.From educating customers about credit cards there is a need toeducate
them about the differentiating factors of the cards. Because visa and master card are
advertising regularly and thereby increases awareness. The strategy should be to emphasize
on its differentiating characteristics. 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 also be used in the
home page to solve customer queries in the ‗Best Possible Manner‘.

Plastic money growth in India fastest in Asia

The plastic money culture seems to be spreading fast if the total transaction volumes through
cards (both debit and credit) in the country for 2002 is anything to go by. Transaction
volumes include both cash withdrawals and purchases made through such cards.

Total transaction volumes have rocketed 103 per cent to $4.201 billion (over Rs 19,400
crore), making India the fastest growing market in Asia Pacific. The comparative figures for
2001 when the Indian market rose by 69 per cent was at $2.277 billion.

The debit card scene in India is also shifting more towards Visa International. Visa‘s debit
card — Visa Electron — has cornered 68.5 per cent of the total transaction volumes in debit
cards in 2002.

According to the latest Nilson Report, India has gone up in the rankings by one notch and is
now the eleventh largest market in Asia Pacific.
However, the total purchases through cards rose by only 31 per cent to $1.802 billion. India
has a long way to go compared with other Asian countries both in terms of total transactions
and purchases.

South Korea, the market leader in Asia Pacific, has shown a 39 per cent rise in transaction
volumes to $296.139 billion and a 48 per cent rise in purchases in total purchases to $104.589
billion.

31
It is followed closely by China, which has, however, seen a fall in total volumes of 8 per cent
to $208.283 billion.

However, the figures do not include the volumes of Cirrus and Maestro - the debit card issued
by MasterCard.

The total number of debit cards issued in the country for the period was at 82.99 lakh. Of this
Visa Electron issuances were 49.13 lakh, while Maestro issuances were 33.86 lakh.

The total volumes through the debit cards for the country stood at $3.550 billion of which
Maestro volumes were at $1.115 billion with the remaining volumes with Visa. However, the
purchases through debit cards in the country were much lower at $103.6 million.

This could be because, debit cards in the country are still primarily used as ATM card for
withdrawal purposes rather than for purchases.

This is more so among the customers of the public sector banks than for the customers of the
foreign banks or the private sector banks. Also banks are now issuing debit cards in lieu of
ATM cards thus propping up the figures.

The total volumes of Visa and Visa Electron in the country for fiscal 2002 has shown a
growth of 138 per cent to $3.724 billion, while the purchase volumes have increased by 36
per cent to $1.137 billion.

The total volumes for MasterCard has shown a rise of 20 per cent to $787.7 million while
purchases had increased by 22 per cent to $ 665.6 million.

The major issuers of Visa Electron cards are ICICI Bank and HDFC Bank while for Maestro
the major issuers are State Bank of India and Citibank.

32
 CHAPTER-2
REVIEW OF LITERATURE

33
 Cunningham Julie (Nov 98), Kansas state university in the study “College Student
using the Credit Card”:
Stated that there is a need to determine whether college students are responsible with
their credit cards. This study was concerned with the problem faced by the credit
cardholders. Consumer perception regarding credit cards and debit cards is very much
different as it is precisely in a defined sector. Role of online commerce or payment over
the internet. It future prospects of credit card and debit card in India. It also includes
consumer preference among debit card and credit card, consumer satisfaction level in
case of both cards.

 Loebecke S.Elliot (Jan 98) in his article “Smart Card Based Electronic Commerce:
Characteristic and Roles”:
Stated that the origin of smart cards began when consumer requirements for convenience
and security out spaced the capabilities of magnetic stripe cards. Providing increased
data storage and added security, smart cards were introduced in Europe in the early
1970‘s as stored value cards for payphones. These early smart cards were disposable and
were an effective means to reduce losses. Today‘s advanced contact less and dual-
interface smart cards technologies- together with emerging digital signature laws and the
development of biometric techniques- can bring a range of services to life on a single
piece of silicon.

 Swift,Kevin (May 1998) in his article “Credit Card and Debit Cards: What New?
Where To?”:
Stated that trends have changed and forces have impact on the card issuer, and
forecasting its future and the resulting impact on the card economy through the year
2002. The report takes a different viewpoint from many studies of the industry which
examined trends from the issuer‘s viewpoint. This study takes those trends as the end
point and looks at the forces that will impact the card issues. It offers insight into the
combination of industry, economic, demographic and technological changes. That will
have an effect on credit and debit card products and how together they will reshape the
industry landscape and result in a credit/debit card industry that will look far different in
the year 2002 that it does today. The convergence of the internet and various consumer
and other electronic technologies in combination with a desire on the part of companies
in a number of industries to forge new alliances and offer enhanced services has
34
 established a role for electronic cash.

 Hayashi, Fumiko and Weiner Stuart E. (Sept.2005) in their article “Competition

and Credit and Debit Card Interchange Fees”
Stated that there is a bridge between the theoretical and empirical literatures on
interchange fees. Credit and Debit card industries are examples of two – sided markets.
The distinguishing feature of two- sided markets is they contain two sets of end users,
each of whom needs the other in order for the market to operate. In the case of credit and
debit cards the two end user groups are cardholders and merchants.

Payment card systems take one of two principal forms. They may be three- party system:
Cardholders, Merchants and a single financial institution that offers proprietary network
services, For example: American Express. Alternatively they may be four-party systems:
Cardholders, Merchants, Card- Issuing Banks, and Merchant acquiring Banks, using the
services of a multi- party network such as MasterCard, Visa, or a domestic debit card
Network. In four-party system, the interchange fee is an instrument that networks can
Use to achieve a desired
Balance of cardholder.

 Chakravorti, Sujit (June 2003) in his article “Theory of Credit Card Networks: A
Survey of the Literature”:
Stated that Credit cards provide benefits to consumers and merchants not provided by
other payment instruments as evidenced by their explosive growth in the number and
value of transactions over the last 20 years. Recently credit card networks have come
under scrutiny from regulators and antitrust authorities around the world. Focusing on
interrelated bilateral transactions, several theoretical models have been constructed to
study the implications of several business practices of credit card networks.

 Hunt, Robert in this article “An Introduction to the Economics of Payment Card
Networks”
Stated that how payment cards work and explains how the market for consumer payment
methods differs from most other markets economists study. These differences have
implications for when, why, and how the rules of antitrust law- which regulate how firms
may exercise market power- should be applied to this industry. He focused on general
purpose credit cards such as Visa or Master Card, and debit cards. We do not discuss

35
 department store cards, oil company cards, or bank cards when they are used at ATM‘s
Debit cards allow customers to pay for goods and services at the point of sale by
authorizing a withdrawal from their checking or savings account. Most ATM cards can
be used at the point of sale as debit cards. Such transactions are called PIN debit
transactions because the cardholder must enter a four digit personal identification
number (PIN) to authorize the transaction. Funds are then immediately withdrawn from
the associated bank account. The transaction itself is routed through as electronic funds
transfer (EFT) network, For example Star , NYCE and pulse 7 transaction , a signature
debit transaction does not immediately remove funds from the cardholder‘s account; It
typically takes a day or two for the transaction to clear. MasterCard must also accept the
comparable brand of debit card.

 Chartered Financial Analyst in the article “Credit Card Crisis in South Korea”:
Stated that in the aftermath of the economic crisis of 97-98 South Korea has undertaken
several measures to deal with prudential problem relating to credit cards. This study
attempts to find out why the credit cards have been a disaster in South Korea in 1999, the
Korean policy makers came up with some revolutionary changes in the policy and law
that stepped up the usage of credit cards. Banks and credit card companies started issuing
credit cards without properly assessing the credit capacity of the customer. The South
Korean credit industry and the economy suffered a painful blow in 2003. It was a major
credit card fiasco throughout the country with thousands of citizens committing suicide
to avoid the burden of debt and fear of bankruptcy.

 Chartered Financial Analyst (Nov.2007) in the article “Ethical Issues and

Challenges”:
Stated that the credit card company has to take into consideration the challenges which
are there in the markets. Credit cardholders have the fear of losing the card and the card
is being misused by other person. The credit card is stolen or lost and being misused.
Credit card companies have to focus on the security and ethical issues related to credit
cards.

36
 CHAPTER-3

OBJECTIVES OF STUDY

37
 Primary objectives:

To know the perception of people towards plastic money.

 Secondary objectives:
1. To know the importance of plastic money in the daily life of consumers w.r.t credit and
debit cards.
2. To study the benefits of debit card and credit cards.
3. To find out the market leader among the various banks/ companies issuing credit and
debit cards.
4. To know the problems faced by respondents using plastic money.
5. To study the satisfaction level of consumers towards plastic money.

38
Need and Scope of the Study

Need of the study

It is rightly said the plastic money is need of hour. People are using these cards on a vast
scale. But after considering the review of literature it is seen the whole payment process of
processing these cards is not safe and customer are facing many problems relating to plastic
money. That‘s why study is focused on consumer perception regarding the plastic money.
Need of the study is to get to know about the comparative analysis of plastic money. There
are many ethical issues and challenges in the market of plastic money which is required to be
studied. This study is concerned with the Seven perks of plastic money. Convenience,
Budgeting technology, Reputation boosting, Corporate might, Cops and robbers, the float,
Openness to negotiations.

39
Scope of study:

The following are the areas covered by plastic money:

ATM cards are slowly being transformed into value-added debit cards. Bankers and analysts
see tremendous scope for growth in debit cards. ―There is tremendous potential for debit
cards. It will soon be substituting cheques. Utility payments will soon be made through debit
cards, either as the ATMs or at the counters. The debit card can be used to withdraw cash
from ATMs of other banks depending on whether the debit card-maker has a Visa or a
Maestro tie-up. Visa and MasterCard both confirmed yesterday that they had been notified of
the breach and had in turn notified several banks and credit card companies of the potential
data compromise. They declined to say how many companies have been notified. Credit
cards as well as convenient, accessible credit, credit cards offer consumers an easy way to
track expenses which is necessary for both monitoring personal expenditures and the tracking
of work-related expenses for taxation and reimbursement purposes.

40
 CHAPTER-4
RESEARCH METHODOLOGY

41
 Research methodology deals with the method of study i.e. how the study can be
carried out and what techniques can be used. It is the careful investigation and enquiry in a
systematic manner in order to find solution to find to find problems in research. It consists of
defining and redefining the problems formulating the hypothesis or suggestions solutions
collecting data and evaluating the data and at last carefully testing the conclusion to
determine whether they fit the formulated hypothesis or not.

Research Design: Research design states the conceptual structure within which research is to
be conducted. A research design is the arrangement of conditions for collections and analysis
of data in a manner that aims to combine relevant the research purpose with economy in
procedure. The different research designs available are:

Exploratory research: It generally emphasis on discovery of ideas and insights. It‘s more
qualitative rather than quantitative.

Descriptive research: It is concerned with determining the frequency with which something
occurs or extent relationship between two variables. This study will be having an exploratory
research which is based on discovery of ideas and insights.

Sampling Plan:-

Universe: The universe consists of all people who are using plastic money for different
purposes.

Sample size: This refers to the number of respondents to be selected from the universe to
constitute a sample. Large samples give more reliable results than the small samples. So the
sample size of 100 respondents was taken into consideration in case of research work which
includes both debit and credit card holders.

Sampling unit: Sampling unit implies that who are the respondents. In this sample all those
who are using debit cards and credit cards.

Sampling technique: The technique used for my study is convenient sampling that consists
of questionnaire, which are given to respondents who are the regular users of plastic money.

42
Methods of Data Collection:

Primary Data:

Primary data is that data which is collected for the first time and thus happens to be original is
character. In the study, primary data will be collected from direct source of information like
customers with the help of questionnaire survey and personal interview.

Questionnaire: The second tool used for study is questionnaire. Various questions regarding
the purposes of plastic money and the various procedures for obtaining credit cards, the
necessity of credit cards, increasing relevance of plastic money among consumers, market
leader among various companies issuing credit and debit cards.

Secondary Data:

Secondary data are those which have already been collected by some one. For this study there
will be following secondary data.

 Websites
 Magazines
 Articles and Newspapers
 Books

Tools of analysis:

 Pie charts and percentage

 Figures

43
CHAPTER-5

LIMITATIONS

44
The limitations of a study are:

1. The results are based on primary data.

2. The accuracy of the result is also limited to the reliability of methods of investigation,
measurement and analysis of data.
3. The present study is based on the data from Patiala city only and thus might not be
true for all others areas.
4. There was lack of time.
5. The data collected may or may not be accurate because of the biasness from
respondent side.
6. Findings are not justified because each market player have their unique characteristics
of debit cards and credit cards, so it‘s very difficult to decide which bank has upper
edge in plastic money.

45
 CHAPTER-6

DATA ANALYSIS AND

INTERPRETATION

46
 1. To know about respondents who are using the plastic money.

Respondents were asked whether they use plastic money or not. The results are as
follows:

Use of Plastic money by the respondent

Use of Plastic Money

No
0%

Yes
100%

Interpretation:

From the above figure it can be interpreted that 100 respondents who are taken for the
study are using plastic money and hence it can be said that majority respondents now a
days are using plastic money.

47
 2. Card possessed by respondents?

Respondents were asked to explain that which card they possess and the results are as
follows:

Card Possesed by Respondents

Both
14%

Credit Card
28%
Debit Card
58%

Interpretation:

From the above data collected we can interpret that the people mostly have debit card, as
credit card is little expensive than debit card so people mostly prefer debit card, but still
people have applied for their credit card also. Some people have both debit card and credit
card.

48
 3. Debit cards of different companies/banks owned by respondents?

Respondents were asked to explain that how many no. of debit card owned by them
and the results are as follows:

No. of Debit cards of different

companies/banks
Three
6%

Two
25%

One
69%

Interpretation:

The above data reveals that mostly people have one debit card; about 25% of the respondents
are using two debit cards from different companies, it‘s clear that people are satisfied with
their debit card.

49
 4. No. of Credit cards of different companies/banks owned by respondents?

Respondents were asked to explain that how many no. of credit card owned by them
and the results are as follows:

No. of Credit cards of different

companies/banks
Three
6%

Two
30%

One
64%

Interpretation:

From the above information it can be interpreted that 64% of the respondent have one credit
card from different companies/banks and 30% have two debit cards.

50
5. Companies/Bank card owned by the respondents?

Respondents were asked to explain which company/bank card owned by them. The
results are as follows:

Card owned

28%

22% 22%
%age. of respondetns

12%
10%

6%

HDFC Bank SBI PNB OBC ICICI BOI

Interpretation:
From the above data it‘s clear that people mostly prefer SBI Bank to get the plastic
money, after that respondent prefers ICICI and HDFC bank. People usually like to
have credit card with which they have account.

51
6. Time period of using the debit card/credit card/both ?

Respondents were asked to explain the time period for which they are using them.

Time period of debit/credit card use

More than 5
year Less than 1 year
18% 22%

Between 1- 3
Between 3- 5 year
year 26%
34%

Interpretation:
The above data reveals that mostly people are using plastic money from 3 to 5 year
and rest are using it for less than 3 year i.e. plastic money become a trend from the
last few years.

52
 7. Purposes for using the card?

Respondents were asked to explain the purpose of using the card. The results are as
follows:

Purpose for using Cards

All of above
Petrol filling 4%
14%

Shopping
37%

Hotel and
Restaurant
20%

Withdrawal of
money
25%

Interpretation:

It is clear that mostly people use the card for the shopping purpose and then for withdrawal of
cash, 20% use it for going for hotel and restaurants. So the plastic money is used by the
respondents everywhere. For all purpose related using is till now less i.e. 4%.

53
 8. Card which is more beneficial?

Respondents were asked to explain which card is more beneficial according to them.
The results are as follows:

Card which is beneficial

Both Debit card

30% 36%

Credit card
34%

Interpretation:

From the above figure it is clear people mostly prefer debit card but credit cards are not far
behind, about 34% of the respondents feel that credit card is more beneficial than debit card
and some feel that both are beneficial.

54
 9. Benefits provided by Debit card?

Respondents were asked to tell the benefits provided by debit card. The result is as
follows:

Benefits provided

50%
%age of Respondents

20% 20%

10%

Security Free from fraud Anytime access No interest charges

Interpretation:

From the above collected data it is clear that there are many benefits and respondents are
satisfied with these benefits, as they feel secured and easy to carry the money. They can use
wherever they want. So from analysis respondents are enjoying all the benefits of Debit card
with having a security 50% and accessing anytime.

55
 10. Benefits provided by credit cards?

Respondents were asked to tell the benefits provided by Credit card. The result is as
follows:

Benefits provided

27%
%age of Respondents

25%
25%

23%

Convenient to pay Overdraft facility Prestige to holder Easy to carry

Interpretation:

From the above study it can be seen that respondents agreed that credit card is easy to carry
and it give prestige to the holder. They can use it where ever they want and fulfil their wishes,
without thinking. As Credit card gives facility to the holder to do anything on credit. From
above 27% thinks it‘s easy to carry in case of cash.

56
 11. Problems faced in processing the card?

Respondents were asked the problems faced in processing the card. The results are as
follows:

Problem faced
Feeling of insecurity Fear of losing card
Unnecessary formalities High fee charged by bank

15%

30%

15%

40%

Interpretation:

From the data it is clear that the cardholders have the problem in processing the card. 40%
have a fear of losing a card, and 30% feel insecure that card might be misused by some other
person.

57
12. Future prospects of plastic money?

Respondents were asked to explain to future prospects of plastic money. The results
are as follows:

Future prospect
56%
%age if Respondents

32%

4% 6%
2%

Rapid growth Steady growth Stagnant Can't predict Declining

Interpretation:

It is clear from the figure that mostly people believe that the future of plastic money is at
boom. 56% people believe that there will be rapid growth and 32 % are of the view of steady
growth 6% can‘t predict anything.

58
CHAPTER-7

FINDINGS

59
 Findings

Following are the findings that are drawn from the study:

1. Respondents taken for this study are those who are using the plastic money in their
daily life.
2. 62% of the respondents believe that plastic money is the currency of modern India.
3. 69% of respondents own one debit card and 25% owns two debit cards.
4. People have less craze for credit card. Only 28% of the respondents have credit card.
5. Respondents mostly prefer the plastic money of SBI Bank, HDFC Bank and ICICI
Bank.
6. 34% using the cards for the last 3 years and the trend of plastic money have emerged
from the last few years.
7. Mostly people use the cards for shopping and withdrawal of money- plastic money is
mostly preferred at the time of shopping.
8. Debit card is more beneficial according to 36% respondents.
9. Debit card provide security to the cardholders.
10. 20% respondents are dissatisfied that debit card is free from fraud.
11. Mostly people agreed that debit card provide the facility of anytime access. Anytime
you can withdraw your money.
12. Credit card is convenient way to pay agreed by most of the respondents.
13. Credit card provide prestige to holders having the tie up with the famous card
companies it provide the sense of pride.
14. 30% cardholder agreed that the plastic money holders have to tackle with the problem
of insecurity.
15. Cardholders have to fulfil the unnecessary formalities while obtaining the card.
16. Plastic money has a rapid growth in the coming years.
17. The growth credit card in India is still very slow. Companies are going really hard to
increase the sale of credit cards.

60
CHAPTER-8

CONCLUSION

61
 CONCLUSION

In the last two years, spending pattern through plastic money has changed drastically.
Travelling, dining and jewellery are the top three purchases that Indian makes through credit
cards. Two years ago, it was jewellery and apparel purchases that formed the largest chunk of
purchases through plastic money. Fuel accounts for a very small portion of credit card
purchases as these are largely paid through debit cards.

Consumers were not only more open to the possibility of owning a financial card, but were
also more than willing to use their cards to settle dues. The status symbol aspect of owning
and using cards too played its part on bringing about such robust growth over the space of a
single year. Debit cards in particular proved immensely popular.

According to projections for the 2003-2008 period the number of financial cards in
circulation will register a compounded annual growth rate of nearly 51 percent sp the
satisfaction of consumers has also increased. There are many ethical issues and challenges for
plastic money issuing banks/ companies. Security relating to card should be first priority for
each bank/company.

Consumers are preferring these cards mostly for shopping online E- commerce has given a
better way to use the plastic money.

At last it is concluded that plastic money has a very bright future in the coming years because
of the increasing trend of E- commerce.

62
 CHAPTER-9

RECOMMENDATIONS

63
 RECOMMENDATIONS

1. Various offers and discounts should be provided on the plastic money so that all the
users feel satisfied with their card choice.
2. The interest charges on credit cards should be reduced so that people are encouraged to
use it in regular routine.
3. More facility should be provided to the card holder in order to satisfy them completely.
4. There should be more sales executives to reinforce new customers.
5. More outlets should be provided where the cards can be easily accepted.
6. The unnecessary formalities should be reduced in order to obtain the plastic money.
7. Advertisements should be given through TV‘s, magazines and hoardings to have
maximum reach because the respondents perceive these as important promotional tools.
8. The whole procedure of obtaining the plastic money needs to be authentic. Companies
should provide security to the card holders.
9. Companies should reduce the amount of the annual fee charged on the cards.

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BIBLIOGRAPHY

65
 BIBLIOGRAPHY

Kothari C.R, ―Research Methodology : Research and Techniques‖; Vishwa Prakshan, New
Delhi, 4th edition.

E.gordan and Natrajan, Financial Services, Himalaya Publishing House, Mumbai. 5th edition.

Articles

College Student using the Credit Card

Smart card based Electronics Commerce characteristics and Roles

Credit card and Debit cards : What new ? Where to ?

Competition and Credit and Debit card Interchange Fees

Theory of Credit card Networks: A survey of Literature

An introduction to the economics of payment card networks

Credit card crisis in South Korea

Ethical Issues and Challenges

Websites

www.rba.gov.au

www.federalreserve.gov

www.direct.gov.uk

www.paypal.com

www.google.com

66
ANNEXURE

67
 QUESTIONNAIRE
Dear Sir/Maam
I am student of MBA of Swami Vivekanand Institute of Engineering and Technology
and topic of my project report is ―Comparative Study of Plastic Money‖ and I want
your cooperation to fill this questionnaire related to my project.

Personal information
Name ______________________________________________
Address ______________________________________________
Occupation ______________________________________________

Q.1 Do you use plastic money?

a) Yes

b) No

Q.2 Which card do you have?

a) Debit card

b) Credit card

c) Both

Q.3. How many no. of debit cards of different companies owned by you?

a) One
b) Two
c) Three
d) None

Q.4 How many no. of credit cards of different companies owned by you?

68
 a) One
b) Two
c) Three
d) None

Q.5 Which companies / bank card do you have?

a) HDFC Bank
b) SBI Bank
c) BOI Bank
d) ICICI Bank
e) Any other if yes specify

Q.6 Since how long you have been using debit card/credit card/ both ?
a) Less than 1 year
b) Between 1-3 year
c) Between 3-5 year
d) More than 5 year

Q.7 Normally for what purpose do you use cards?

a) Shopping
b) Withdrawal of money
c) Petrol filing
d) Hotel and restaurants
e) All of above

Q.8 Which card according to you is more beneficial?

a) Debit card
b) Credit card
c) Both

Q.9. What are the benefits provided by debit cards?

a) Security
b) Free from fraud
c) No interest charges

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 d) Anytime access

Q.10 What are the benefits provided by credit cards?

a) Easy to carry
b) Convenient to pay
c) Overdraft facility
d) Prestige to holder

Q.11 What are the problems you are facing in processing the card?

a) Feeling of insecurity
b) Fear of losing the card
c) Unnecessary formalities
d) High fee collected by banks

Q.12 What are the future prospects of plastic money?

a) Rapid growth
b) Steady growth
c) Stagnant
d) Can‘t predict
e) Declining

70