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Partial fulfillment of the requirement of
Master of Business Administration
IBM, C.S.J.M.U KANPUR (2017-2019)


Mrs. Warshi Singh Disha Mishra

Roll No. 7131021


I Disha Mishra student of Masters in Business Administration from Institute Of

Business Management, Chhatrapati Shahu Ji Maharaj University Kanpur,
declare that the Project Report entitled “PLASTIC MONEY ” is an original
piece of research work carried out by me under the guidance and supervision of
faculty at Chhatrapati Shahu Ji Maharaj University Kanpur. The information
has been collected from genuine & authentic sources.The matter embodied in
this project report has not been submitted to any other University or Institution
for the award of degree. This project is my original work and it has not been
presented earlier in this manner. This information is purely of academic interest

Signature of Student

M.B.A (F.C) 4th semester


I am using this opportunity to express my gratitude to everyone who supported

me throughout the course of this MBA project. I am thankful for their aspiring
guidance, invaluably constructive criticism and friendy advice during the
project work. I am sincerely grateful to them for sharing their truthful and
illuminating views on a number of issues related to the project.

I would also like to thank my project external guide Mrs.Warshi Singh and all
the people who provided me with the facilities being required and conductive
conditions for my MBA project.

Thank you,






























Primary objectives
 To know the perception of people towards plastic money.

Secondary objectives
 To know the importance of plastic money in the daily life of consumers’ W.R.T
credit and debit cards.
 To study the benefits of debit card and credit cards.
 To find out the market leader among the various banks/companies issuing credit
and debit cards
 To know the problems faced by respondents using plastic money.
 To study the satisfaction level of consumers towards plastic money.


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.

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 at 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.

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 handling
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 Credit
cards in India are gaining ground. A number of banks in India are encouraging
people to use credit card. The concept of credit card was used in 1950 with the
launch of charge cards in USA by Diners Club and American Express. Credit
card however became more popular with use of magnetic strip in 1970.
Credit card in India became popular with the introduction of foreign banks in
the country.
Credit cards are financial instruments, which can be used more than once to
borrow money or buy products and services on credit. Basically banks, retail
stores and other businesses issue these. It was introduced around and has now
become an essential form of ready money. One of the main reasons for
introducing plastic money, especially credit cards is to reduce the risk of
handling a huge amount of cash by individuals/merchants. The growth and
popularity of plastic money in India has been phenomenal in the last few years.
In the present day world, no one wants to be bothered by the presence of huge
cash in his or her wallet and the Indians are no exceptions. The unprecedented
growth in the number of credit card users has stimulated the Indian economy by
a significant extent. The arrival of malls, multiplexes, online shopping stores
and shopping complexes have contributed to the growth of the use of plastic
The Best credit cards in India are usually meant for specific user group such as
women, students and small business owners. These cards are offered to the
prospective customers with appealing deals.
Over the years, Indians have been averse to credit cards. This is primarily
because they believed that spending through credit is a sure shot way of getting
into the debt trap. Of course, movies highlighting the sad state of a borrower did
not exactly help matters. And even the local kirana shops have the famous lines
Aaj Nagad, Kal Udhari (cash today, credit tomorrow). But the situation is not
actually that scary. And it is all about right timing. Credit cards can be a useful
tool at the hands of savvy consumers who can effectively use the benefits
offered by cards. It is important to know that credit card is a financial tool that
needs to be used responsibly. While it ensures cash flow, it is not advisable for
customers to borrow for a longer period of time. Use it effectively and take
good advantage of the time line and clear your debts, without any additional

Major Banks issuing Credit Card in India

 State Bank of India credit card (SBI credit card)
 Bank of Baroda credit card or BOB credit card
 ICICI credit card
 HDFC credit card
 IDBI credit card
 ABN AMRO credit card
 Standard Chartered credit card
 HSBC credit card
 Citi bank Credit Card

Global player in Credit card market are Master Card, VISA Card, American
Express, Diners Club International.

The first 6 digits of credit cards number are known as the issuer identification
number (IIN),previously known as bank identification number (BIN).These
identify the institution that issued the to the card holder

The IIN ranges used by the major card schemes are

VISA: Card number start with a 4.
Master Card: Card start with No.51 and 55
Diners Club: Card number beginning 36 or 38
Amex Ex: Card number beginning 34 or37


Concept of credit card

Progress in civilization in its turn has brought out radical changes in the manner
of trading. The need for something intrinsically useful and easily applicable in
everyday dealing is clearly felt. Cash in the form of currency notes and coins
makes up just one form of the payment system. Development in banking while
also giving inputs to the further development of cash brought about a second
phase in payment namely paper instructions such as cheques and credit
transfers. The requirement for greater flexibility and convenience has led to
electronic payments, and this is where plastic cards have proved their worth. It
allows the card issuers to limit the sum of money the card-holders wish to
spend. The spending of card-holders who have defaulted on payments or who
are over their credit limit can be restricted until the balances are cleared.

Definition of credit card

A credit card is a credit-token within the meaning of section 14(1), Consumer

Credit Act 1974 of the UK which defines a credit-token as a card, cheque,
voucher, coupon, stamp, form booklet or other document or thing given to an
individual by a person carrying on a consumer credit business, who undertakes:-
 That on the production of it (whether or not some other action is also
required), he will supply, cash, goods and services (or any of them) on
credit, or
 That were, on the production of it to third party (whether or not any other
action is also required), the third party supplies cash, goods and services
(whether or not deducting any discount or commission), in return
for payment to him by the individual.
In very simple words credit card can be termed as
an unsecured personal loan offered to customers by the banks where the card-
holder could purchase goods and services from authorized merchant or
merchant establishments (MEs) of the bank up to a fixed limit on credit. Such
credit is normally made available for a period of 30 to 45 days.
A credit card can also be used to secure airline tickets and car rentals. Having a
credit card can make purchases and reservations easier; however, a credit card
should be used responsibly so that the consumer does not over extend his

Credit cards are usually issued by banks or other financial institutions. Some
credit cards may be available online.

Our society was once upon a time functioning without money; it is again likely
to become moneyless. While ancient society was confronted with the problems
of adjusting mutually satisfactory rates and basis of exchange, future society,
with the help of computers, electronics and telecommunications, credit cards,
telephone and other modern means of communications, would settle financial
transactions instantly. Money as a medium of exchange will serve its function.
The difference will be that in future coins, currency notes, cheques, etc., will be
dispensed with in favour of records. India has entered the stage of credit card
system and credit cards are gaining increasing relevance to facilitate industrial,
commercial and agricultural transactions.
Credit was first used in Assyria, Babylon and Egypt 3,000 years ago. The bill of
exchange – the forerunner of bank notes - was established in the 14th century.
Debts settled by one-third cash and two-thirds bill of exchange paper money
followed only in the 17th century. The first advertisement for credit was placed
in 1730 by Christopher Thornton who offered furniture that could be paid off
From the 18th century until the early part of the 20th, tallymen sold clothes in
return for small weekly payments; they were called “tallymen” because they
kept a record of tally of what people had brought on a wooden stick. One side of
the stick was marked with notches to represent the amount of debt and the other
side was a record of payments. In the 1920s shopper’s plate – “buy now, pay
later” system – was introduced in USA. It could only be used in shops which
issued it.
In 1950, Diners Club and American Express launched their charge cards in
USA, the first ‘plastic money’. In 1951, Diners Club issued the first credit card
to 200 customers who could use it at 27 restaurants. With the magnetic strip in
1970, the credit card became a part of the information age.

The origins of the bank credit card have been traced to John C. Biggins, a
consumer credit specialist at the Flatbush National Bank of Brooklyn, New
York. In 1946, Biggins launched a credit plan called Charge-It. The programme
featured a form of scrip that was accepted by local merchants for small
purchases. After the sale was completed, the merchant deposited the scrip in a
bank account, and the bank billed the customer for the total scrip issued.

Plastic Money: the Currency of Modern India

Indian consumers have never had it so good. The soiled notes are definitely out.
Carrying cash is no more `a pain in the neck' as consumers are relying more on
the `plastic card' which gives them money on credit.

Plastic money basically means debit cards and credit cards which is having a
magnetic stripe, logo, signature of the cardholder made of plastic.

Credit Cards have finally arrived in India. The card industry which is growing at
the rate of 20% per annum is flooded with cards ranging from gold, silver,
global, smart to secure….the list is endless. From just two players in early 80s,
the industry now houses over 10 major players vying for a major chunk of the
card pie.

Currently four major bishops are ruling the card empire---Citibank, Standard
Chartered Bank, HSBC and State Bank of India (SBI). The industry, which is
catering to over 3.8 million card users, is expected to double by the fiscal 2003.
According to a study conducted by State Bank of India, Citibank is the
dominant player, having issued 1.5 million cards so far. Stanchart follows way
behind with 0.67 million, while Hongkong Bank has 0.3 million credit card
customers. Among the nationalized banks, SBI tops the list with 0.28 million
cards, followed by Bank of Baroda at 0.22 million.

Parties involved:

 Cardholder: The owner of the card used to make a purchase; the consumer.
 Card-issuing bank: The financial institution or other organization that issued the
credit card to the cardholder. This bank bills the consumer for repayment and
bears the risk that the card is used fraudulently. American Express and Discover
were previously the only card-issuing banks for their respective brands, but as
of 2007, this is no longer the case.
 Merchant: The individual or business accepting credit card payments for
products or services sold to the cardholder
 Acquiring bank: The financial institution accepting payment for the products or
services on behalf of the merchant.
 Independent sales organization: Resellers (to merchants) of the services of the
acquiring bank.
 Merchant account: This could refer to the acquiring bank or the independent
sales organization, but in general is the organization that the merchant deals
 Credit Card association: An association of card-issuing banks such as Visa,
MasterCard, Discover, American Express, etc. that set transaction terms for
merchants, card-issuing banks, and acquiring banks.
 Transaction network: The system that implements the mechanics of the
electronic transactions. May be operated by an independent company, and one
company may operate multiple networks. Transaction processing networks
include: Cardnet, Nabanco, Omaha, Paymentech, NDC Atlanta, Nova, Vital,
Concord EFSnet, and VisaNet.


 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.

At the time of using the card he is not declared not as a defaulter even if misses
due date. A 2.95 per cent late payment fees (this differs from one bank to
another) is levied in the 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.

 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 authorisation 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.

 Diners 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

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

 Photo card

In this photograph is imprinted on a card, and 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.

 Global card

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

 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. .

 Affinity card

The card issuer ties up with popular organizations/ institutions which are often
non-profit organizations (Citi-WWF card or the stanch art-Cricket cards) to
offer an affinity card. When the card is used, a certain percentage is contributed
to the organization /institution by the card issue

 MasterCard and 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 customer’s world-wide may use their
respective credit cards to make various purchases.

 Visa card: Visa, Inc., commonly called VISA, is an economic joint venture of
21,000 financial institutions that issue and market Visa products including
credit and debit cards. The company was originally named Visa International
Service Association. The name change occurred in the fall of 2007 as a part of
Visa’s restructuring and IPO plan. The company is based in San Francisco,
California, USA.



Today, credit cards have many functions and are very versatile. They can be
summarized into the following functions:

The holder may obtain extended credit up to an agreed limit at a published
interest rate.

The holder can repay the whole amount at the end of the month, without charge
provided no cash advance has been taken.

On presentation at the appropriate banks, subject to check, cash can be obtained.
In most cases can also be used in ATMs to obtain cash.

Cheque guarantee
A cheque drawn on a bank may be guaranteed up to a published limit provided
it is accompanied by a Cheque Guarantee Card (or in some cases a Visa or
MasterCard card) issued by the bank on which it is drawn.

Cheque encashment
Cheque guaranteed as above may be used to obtain cash from branches of most
banks, although a charge may be levied in certain circumstances.

If the card is a member of Visa International or MasterCard International, you
can use your card at many countries where there are a lot banks who are
members of them.
Perhaps the most significant fact to emerge from the summary of card functions
is that strictly speaking, they are not debit cards. Although they can be used to
obtain cash via ATM, the debit will be made from the credit card account and
not from the holder's bank account.
The credit cards discussed above are bank cards. Different bank cards have
different card functions. The functions of bank cards really depend on the

individual bank itself. Some bank card may have all of the above functions and
some may not.
There other credit cards that are issued by retail stores such as Petrol Card,
Quasi Card and Private Label Card which may have some of the above
functions mentioned above.


All credit cards offer a variety of features. Knowing and understanding these
features will help to decide which card is right for.

Most credit cards charge fees for various things, and it is important to know
what these fees are and how to avoid them.

The annual fee

Some credit card companies charge you an annual fee just for using their card.
Because of stiff competition, you can often negotiate this fee away if you call
and speak to a customer service representative.

Cash Advance Fee

Most credit card companies will charge you a fee for cash advances. These fees
can vary but are usually somewhat hefty. Not only will they charge you a one-
time fee, but the interest rate for this money will be at a considerably higher
rate. Plus, unlike a regular purchase, where interest begins accruing after some
grace period passes, cash advances accrue interest charges from day one.

Many card companies are competing for your business and are now offering an
introductory cash advance and balance transfer rates for a specific amount of
time. This lower rate can be applied to any balances you may wish to transfer
from another card. Although it sounds good, some companies will charge you a
fee for the transfer. Know what the fee is before you transfer any balances.

Miscellaneous Fees
Things like late-payment fees, over-the-credit-limit fees, set-up fees, and return-
item fees are all quite common these days and can represent a serious amount of
money out of your pocket if you get whacked for any of these fees.

Since there are so many credit card companies, competition is stiff. Adding
incentives to their offers is one of the more popular ways to tip the scales in
their favor. Incentives like rebates on purchases, frequent flyer miles on certain
airlines, and extended warranties on purchases are just a few of the bonuses that
card companies will now offer.
For those of you who collect and use your frequent flyer miles, they also have
added incentives like travel insurance and car rental insurance for your
convenience. Of course, they are hoping that with all this traveling, you are
using their card to foot at least some of the bill.

Many card companies are looking to keep your business and are therefore
making it worth your while to use their card. Just simply by using their card you
can accumulate points that will in turn earn you rewards. What kind of reward
depends solely on the amount of points you accumulate. Since you can't
accumulate these points without charging things on your card, this is a classic
case of 'you have to spend money to save money.'
Bottom line is this: Know what you need and what you don't. No sense in
paying for any features that you won't use.

The annual percentage rate (APR) is the interest rate applied a balance carried
beyond the grace period. Credit cards can have different APRs for different

types of balances, e.g. balance transfers or purchases. Balance transfers and
cash advances usually have higher APRs than for purchases.
Your APR may increase when you're late on your payment to a particular
creditor, and other creditors if your card agreement includes a universal
default clause.
APRs can be fixed or variable. A fixed APR can change, but the creditor must
inform you in writing before changing the rate. A variable APR changes from
time to time.

Grace Period
The grace period is the amount of time you have to pay your balance in full
before a finance charge is applied to your purchase. If you carried a balance
from the previous month, you may not have a grace period for your new
purchases. In addition, balance transfers and cash advances typically do not
have a grace period. When balances don't have an applicable grace period,
interest is applied right away.
To find out the length of the grace period refer to the credit card application or
your credit card agreement. Your monthly statements should also include the
number of days in the grace period.



 Purchase Power and Ease of Purchase

Credit cards can make it easier to buy things. If you don't like to carry large
amounts of cash with you or if a company doesn't accept cash purchases (for
example most airlines, hotels, and car rental agencies), putting purchases on
a credit card can make buying things easier.

 Protection of Purchases
Credit cards may also offer you additional protection if something you have
bought is lost, damaged, or stolen. Both your credit card statement (and the
credit card company) can vouch for the fact that you have made a purchase if
the original receipt is lost or stolen. In addition, some credit card companies
offer insurance on large purchases.

 Building a Credit Line

Having a good credit history is often important, not only when applying for
credit cards, but also when applying for things such as loans, rental
applications, or even some jobs. Having a credit card and using it wisely
(making payments on time and in full each month) will help you build a
good credit history.

 Emergencies
Credit cards can also be useful in times of emergency. While you should
avoid spending outside your budget (or money you don't have!), sometimes
emergencies (such as your car breaking down or flood or fire) may lead to a

large purchase (like the need for a rental car or a motel room for several

 Credit Card Benefits

In addition to the benefits listed above, some credit cards offer additional
benefits, such as discounts from particular stores or companies, bonuses such
as free airline miles or travel discounts, and special insurances (like travel or
life insurance.) While most of these benefits are meant to encourage you to
charge more money on your credit card (remember, credit card companies
start making their money when you can't afford to pay off your charges!) the
benefits are real and can be helpful as long as you remember your spending


Blowing Your Budget

The biggest disadvantage of credit cards is that they encourage people to spend
money that they don't have. Most credit cards do not require you to pay off your
balance each month, so even if you only have $100, you may be able to spend
up to $500 or $1,000 on your credit card. While this may seem like 'free money'
at the time, you will have to pay it off -- and the longer you wait, the more
money you will owe since credit card companies charge you interest each
month on the money you have borrowed.

High Interest Rates and Increased Debt

Credit card companies charge you an enormous amount of interest on each
balance that you don't pay off at the end of each month. This is how they make
their money and this is how most people in the United States get into debt (and
even bankruptcy.) Consider this: If you have a $100 in savings, most banks will

give you at the most 2.0 to 2.5% interests on your money over the course of the
year. This means you earn $2.00 - $2.50 a year on your $100 savings. Most
credit cards charge you up to 10 times that amount of interest on balances. This
means that if you have $100 balance that you don't pay off, you will be charged
20-25% interest on that $100. This means that you owe almost $30 interest (plus
the original $100) at the end of the year. A good way to look at this is in
comparison to what you would earn in interest from a bank or owe in interest to
a bank loan: Savings accounts may pay you around 2% interest; if you have a
loan from a bank you may pay them around 10% interest (5 times as much as
you earn off your savings); if you owe money to a credit card company, you
may pay them around 20% interest (10 times as much as you earn off your

Credit Card Fraud

Like cash, sometimes credit cards can be stolen. They may be physically stolen
(if you lose your wallet) or someone may steal your credit card number (from a
receipt, over the phone, or from a Web site) and use your card to rack up debts.
The good news is that, unlike cash, if you realize your credit card or number has
been stolen and you report it to your credit card company immediately, you will
not be charged for any purchases that someone else has made. Even if you don't
realize your credit card number has been stolen (sometimes you might not know
until you receive your monthly statement), most credit card companies don't
charge you or only charge a small fee, like $25 or $50, even if the thief has
charged thousands of dollars to your card. There are several things you can do
to prevent credit card fraud:
 If you lose your card or wallet, report it to your credit card
company immediately.
 Don't loan your credit card to anyone and only give out your credit
card information to trusted companies or Web sites.
 Check your statement closely at the end of each month to make
sure all charges are yours.
 You can find out more about protecting your personal information
by visiting our Personal Safety course.
Credit cards can make life easier and be a great tool, but if they aren't used
wisely they can become a huge financial burden. If you do decide to use credit
cards, remember these simple rules:
 Keep track of all your purchases.
 Don't spend outside your budget.
 Pay off your balance on all of your credit cards at the end of each
Don't loan your credit or give out your credit card information to anyone but
reliable companies


There may be many people who suggest that you get a credit card, but before
you do you should carefully decide whether or not you really need a credit card.
The answer is that you can get by without a credit card. Although a credit card
can be a useful tool, when used properly (paid in full every month), it can be a
bigger liability than an asset. Here are five common misconceptions about
needing a credit card.

1. Credit Card to Build Credit

You build credit by paying your bills on time. You can build enough credit to
qualify for a home loan by paying your rent on time for several years. You
destroy your credit when you do not pay your bills on time. The utility
companies and other businesses can send you to a collection agency if you do
not pay on time. You do not need a credit card to build your credit history. You
may find it a little easier to do with a credit card, but you should be very careful
as you try to do so.

2. Credit Card to Shop Online or Rent a Car

Since debit cards have been introduced you no longer need a credit card to do
these things. In fact you can do everything with a debit card that you can with a
credit card, except spend money that you do not have. You should not be doing
that anyway. Debit cards can be used anywhere a credit card can. This
completely debunks the statement that you need one to rent a car.

3. Credit Card for Emergencies

If you plan well you should set up an emergency fund for emergencies. Your
emergency fund should have at least $1000.00 in it, but you should try to have
three to six months of expenses saved up. This much money should be able to
handle any emergency that comes your way. If you are stranded on the road and
need to be towed you can use your debit card to pay for the tow, and your
emergency fund to cover those expenses.

4. Credit Card to Save Money on Purchases

Many stores will offer discounts for having a store credit card. Stores do not
offer cards to give you discounts; they offer cards because they realize that
while most people intend to pay the card off every month, few actually do. They
make more back on interest than they the discount they offer to you.

5. Credit Card to Earn Rewards

This is a dangerous game to play. If you are responsible and pay off your
balance in full each month, you may consider having a rewards credit card. You
should make sure that you have a credit card with no annual fee. Additionally it
is important to remember that the credit card offers its rewards, because the
company realizes that most people are not going to pay off their credit cards in
full each month. This means that they make more money off the customers, then
rewards they give out.

Fraud Question

What kinds of credit card frauds are more prevalent?

Counterfeit and CNP (card not present) continue to be the two main types.
Physical theft of cards is not such an issue. Since online transactions typically
don't require the card to be presented, the information sitting on the card and
other customer authentication details are sometimes compromised and used for
transactions. This is becoming a big problem. However, India has been pro-
active in this regard and has introduced the two-factor identification system,
wherein a customer transacting online must also have a T-Pin for transactions
where the card is not present.

What is being done to prevent such fraud?

Visa is doing a number of things in partnership with issuers to introduce

measures which can easily prevent such frauds.
Since the prevention of theft is of utmost important, banks are offering
customers the option of opting for alerts whenever there is a transaction.
This measure is immediate in nature and can help the customer know about his
or her transactions in real time.Also, we are increasingly encouraging issuers to
opt for chip cards, which can go a long way in controlling fraud. We would like
all banks to issue chip cards to increase security.

Why is a chip card safer?

It is very difficult to copy, as a unique cryptogram or code is generated for each
transaction. So, even if a card is counterfeited, it will be declined.
In India, banks are selectively issuing chip cards to consumers, depending on
their usage pattern.

What are some of the most effective fraud detection tools that Visa has?

Some very sophisticated ones are in place. Some are rule-based tools, wherein a
customer can define a set of rules for transactions like a spending limit, places
of transactions, etc.If there is a deviation from these, and the transaction won't
be complete. In the USA, neural networks (artificial intelligence) are being
deployed to ensure the authentication sits on the back-end. These networks
basically study the pattern of usage by a customer and any deviation comes up
for further verification. So, a customer gets a call if there is a deviation from his
or her set pattern.

What can a customer do to avert card-related frauds?

They should first opt for customer alerts each time there is a transaction. Second
would be dynamic authentication by using chip cards.
Also, they should be careful of hidden cameras in ATMs and should watch for
fake ATM fronts, where your card can be skimmed.


The debit card has emerged from the shadow of its older sibling, the credit card.
Over the past decade, debit card has grown from accounting for 274 million
transactions in 1990 to 8.15 billion transactions in 2002, to challenge the credit
card as the preferred payment card. As it stands, the debit card industry is a
multi-billion dollar engine that helps drive bank profits and point-of purchase
consumer sales - but is also beginning to redefine traditional payment options in
the business and government sectors, such as food stamps, benefits, and payroll.


Two decades ago, the number of debit cards in circulation was approximately
19 million. This figure is projected to cross 34.4 million by 2016.

A debit card (also known as a bank card or check card) is a plastic card that
provides an alternative payment method to cash when making purchases.
Functionally, it can be called an electronic check, as the funds are withdrawn
directly from either the bank account, or from the remaining balance on the
card. In some cases, the cards are designed exclusively for use on the Internet,
and so there is no physical card.

In many countries the use of debit cards has become so widespread that their
volume of use has overtaken or entirely replaced the check and, in some
instances, cash transactions. 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 check guarantee card. Merchants may also
offer cash back facilities to customers, where a customer can withdraw cash
along with their purchase.

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

Types of Debit Card systems

 Online Debit Card

 Offline Debit Card
 Electronic Purse Card System
 Prepaid debit card

Debit card

An example of the front of a typical debit card:

1. Issuing bank logo

2. EMV chip

3. Hologram

4. Card number

5. Card brand logo

6. Expiration date

7. Cardholder's name

An example of the reverse side of a typical debit card:

1. Magnetic stripe

2. Signature strip

3. Card Security Code

There are currently three ways that debit card transactions are processed: online
debit (also known as PIN debit), offline debit (also known as signature debit)
and the Electronic Purse Card System. It should be noted that one physical card

can include the functions of an online debit card, an offline debit card and an
electronic purse card. Although many debit cards are of
the Visa or MasterCard brand, there are many other types of debit card, each
accepted only within a particular country or region.

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

Offline Debit System

Offline debit cards have the logos of major credit cards

(e.g. Visa or MasterCard) or major debit cards 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.

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-

Prepaid debit cards

Prepaid debit cards, also called reloadable debit cards or reloadable 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 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

Working of Debit Card

The user has to present the card to merchant who will swipe it through the
electronic terminal and enter the amount of purchase. The customers need to
sign the transaction slip. Account will be automatically debited for the amount
of the purchase and the transaction can be verified by entering the PIN. Debit
Card can be used to access the Account from over 5,000 Shops, Department
Stores, Petrol Pumps and Restaurants and over 235 ATMs in India .It can also
be used at over 4 million Visa Electron merchant locations and equally strong
MasterCard outlets. If Debit Card ever gets lost or stolen, card companies
protect from fraudulent usage at the loss.

It is necessary to have a savings or current account with the debit card issuer; by
filling an application form. The card company then couriers the card across
around a week’s time. The Debit card does have a daily limit which could be
somewhere around Rs. 15,000 at ATMs, and Rs. 10,000 at merchant locations.
This again is subject to the balance available in the account.

Advantages and Disadvantages of Debit Cards

The widespread use of debit and check cards have revealed numerous
advantages and disadvantages to the consumer and retailer alike.

Advantages of debit cards

 A consumer who is not credit worthy and may find it difficult or

impossible to obtain a credit card can more easily obtain a debit
card, allowing him/her to make plastic transactions. For example,
legislation often prevents minors from taking out debt, which
includes the use of a credit card, but not online debit card
 For most transactions, a check card can be used to avoid check
writing altogether. Check cards debit funds from the user's account
on the spot, thereby finalizing the transaction at the time of
purchase, and bypassing the requirement to pay a credit card bill at
a later date, or to write an insecure check containing the account
holder's personal information.
 Like credit cards, debit cards are accepted by merchants with less
identification and scrutiny than personal checks, thereby making
transactions quicker and less intrusive. Unlike personal checks,
merchants generally do not believe that a payment via a debit card
may be later dishonored.
 Unlike a credit card, which charges higher fees and interest rates
when a cash advance is obtained, a debit card may be used to
obtain cash from an ATM or a PIN-based transaction at no extra
charge, other than a foreign ATM fee.

Disadvantages of debit cards

 Use of a debit card is not usually limited to the existing funds in

the account to which it is linked, most banks allow a certain
threshold over the available bank balance which can
cause overdraft fees if the users transaction does not reflect
available balance.
 Many banks are now charging over-limit fees or non-sufficient
funds fees based upon pre-authorizations, and even attempted but
refused transactions by the merchant (some of which may be
unknown until later discovery by account holder).
 Many merchants mistakenly believe that amounts owed can be
"taken" from a customer's account after a debit card (or number)
has been presented, without agreement as to date, payee name,
amount and currency, thus causing penalty fees for overdrafts,
over-the-limit, amounts not available causing further rejections or
overdrafts, and rejected transactions by some banks.
 In some countries debit cards offer lower levels of security
protection than credit cards. Theft of the users PIN using skimming
devices can be accomplished much easier with a PIN input than
with a signature-based credit transaction. However, theft of users'
PIN codes using skimming devices can be equally easily
accomplished with a debit transaction PIN input, as with a credit
transaction PIN input, and theft using a signature-based credit
transaction is equally easy as theft using a signature-based debit

 In many places, laws protect the consumer from fraud much less
than with a credit card. While the holder of a credit card is legally
responsible for only a minimal amount of a fraudulent transaction
made with a credit card, which is often waived by the bank, the
consumer may be held liable for hundreds of dollars, or even the
entire value of fraudulent debit transactions. The consumer also has
a shorter time (usually just two days) to report such fraud to the
bank in order to be eligible for such a waiver with a debit
card, whereas with a credit card, this time may be up to 60 days. A
thief who obtains or clones a debit card along with its PIN may be
able to clean out the consumer's bank account, and the consumer
will have no recourse

Debit Cards Benefits

Debit Cards offer the following benefits:

 They help people to be disciplined financially, since one cannot
splurge with the limited amount of funds deposited for the card.
 A person with poor credit can obtain a debit card too much trouble.
 Debit cards can be used to make online purchases and payments.
 They provide freedom from carrying cash checks while traveling,
herby offering more safety.

Debit Cards: Issuers

The banks issuing debit cards include:

 Bank of America
 Citibank
 American Express
 Standard Chartered

Debit Cards vs. Credit Cards: Similarities and Differences


 The same financial institutions offer both debit cards and credit cards.
Both cards offer special rewards, such as points and cash back on
purchases made through the card.
 Debit cards and credit cards can be used to make online payments with
the help of the pin number assigned to them.
 They can be used to withdraw money from ATM’s depending on the cash
limit available on these cards.


 In the case of a credit card, the issuer offers credit and overdraft facilities.
This facility is not available with a debit card, which will only debit
payments from existing and available funds within the cardholders account.
 A credit cardholder therefore has a monthly bill to pay in every month that
the card is used. If they don’t pay that bill, high interest charges are applied.
A debit card holder is free from the hassle of paying those bills and from the
risk of building up large debts to credit card companies.

Debit Card Problems can be worse than Credit Card Problems

When an improper charge appears on the credit card it cannot automatically out
the money and simply need to work with the credit card issuer to have the
charge removed from the bill. When an improper charge occurs with a debit
card, however, the funds are automatically taken from the account and customer
is burdened with attempting to get the money back. Meanwhile, he may
experience cash flow problems and the legitimate checks could bounce.

Traveling with your Debit Cards

The reverse side of the debit card will display the names or symbols of the
various ATM systems that will accept the card. Debit card can be used at any
ATM in the world as long as the ATM displays one of the same system names
or symbols that is on debit card. When obtaining funds at an ATM in a foreign
country the funds dispersed will be in the currency of the country going to visit.



Combining the wide acceptability of a credit card and the thoughtful prudence
of an ATM card, the ICICI Bank Debit Card is the most convenient accessory.
No more fear of overspending. No more searching for the nearest ATM. Only
more comfort and convenience in the debit cards provided by ICICI.

Various Products

 The ICICI Bank Private Banking Debit Card

 The ICICI Bank Gold Debit Card

 The ICICI Bank HPCL Debit Card

 The ICICI Bank Ncash Silver Card

 The ICICI Bank Ncash Debit Card


HDFC BANK Debit Cards give you complete and instant access to the money
in accounts without the risk or hassle of carrying cash.


 Easy Shop International Debit Card

 Easy Shop International Gold Debit Card
 Easy Shop International Business Debit Card
 Easy Shop Woman's Advantage Debit Card
 Kisan card



About - HDFC Bank Limited, India

The Housing Development Finance Corporation Limited (HDFC) was amongst

the first to receive an 'in-principle' approval from the Reserve Bank of India
(RBI) to set up a bank in the private sector, as part of the RBI's liberalization of
the Indian Banking Industry in 1994. The bank was incorporated in August
1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai,
India. HDFC Bank commenced operations as a Scheduled Commercial Bank in
January 1995.

Capital Structure

The Indian Private Equity Fund, Mauritius (IPEF) and Indocean Financial
Holdings Ltd., Mauritius (IFHL) (both funds advised by J P Morgan Partners,
formerly Chase Capital Partners) together hold about 5.5% of the bank's equity.
Roughly 27.5% of the equity is held by FIIs, NRIs/OCBs while the balance is
widely held by about 214,000 shareholders. The shares are listed on The Stock
Exchange, Mumbai and the National Stock Exchange. The bank's American
Depository Shares are listed on the New York Stock Exchange (NYSE) under
the symbol "HDB"


Managing Director Aditya Puri

Executive Director Kaizad Bharucha
Chief Financial Sashi Jagdhishan
Chairman Deepak Parekh
Assets and Credit Pralay Mondal

About – ICICI Bank Limited,

In 1955, The Industrial Credit and Investment Corporation of India Limited

(ICICI) was incorporated at the initiative of World Bank, the Government of
India and representatives of Indian industry, with the objective of creating a
development financial institution for providing medium-term and long-term
project financing to Indian businesses. In 1994, ICICI established Banking
Corporation as a banking subsidiary. Formerly known as Industrial Credit and
Investment Corporation of India, ICICI Banking Corporation was later renamed
as 'ICICI Bank Limited'

Capital structure

ICICI Bank is India's second-largest bank with total assets billion (US$ 108.7
billion) at March 31, 2010.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and
the National Stock Exchange of India Limited and its American Depositary
Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).


Managing Director Sandeep Bakhshi

and Chief executive
DeputyManaging Vishakha Mulye
Executive Director N.S.Kannan



HDFC bank credit cards provide a facility of easy availability of cash and
convenience to the cardholder.



Silver Credit Card

Value plus Credit Card

Health plus Credit Card

Gold Credit Card

Titanium Credit Card



ICICI Bank Credit Cards give you the facility of cash, convenience and a range
of benefits, anywhere in the world. These benefits range from life time free
cards, Insurance benefits, global emergency assistance service, discounts, utility
payments, travel discounts and much more.


 Premium Cards

 Classic Cards

 Value for Money Cards

 Co Branded Cards

 Affinity Cards

 EMI Card

Who's the banking king? ICICI or HDFC?

Their offices reflect their attitudes. ICICI Bank's headquarters in suburban

Mumbai is a huge, imposing edifice in glass and granite. HDFC Bank's office in
central Mumbai is comparatively smaller and more sedately furnished.The two
banks have carried forward their style statement in their approach to business.
ICICI Bank thinks big, is all for growth and hungry for market share.HDFC
Bank is more conservative and cautious, grows at a measured pace, without
taking any undue risks.ICICI Bank began its retail banking venture in mid-
1999. By January 2000, it had moved on to introducing home loans, car loans,
personal loans and credit cards.Realising the need for a bigger retail deposit
base, the bank started building a branch and an ATM network. The acquisition
of Bank of Madura in March 2001 added 263 branches, many of them in cities
where ICICI Bank did not have a presence.The merger of the erstwhile financial
institution ICICI Limited with the bank in April 2002, gave it a ready-made
corporate clientele. The flip side was that ICICI Bank had Rs 10,000 crore (Rs
100 billion) of restructured assets for which it had to make provisions.

On the other hand, HDFC Bank kick started its operations in 1995 with a focus
on corporate banking, targeting the top-end of the market. Reminisces Paresh
Sukthankar, head, credit and market risk, HDFC Bank, "Although the asset
yields may have been lower, we were able to cross-sell products so that the
overall returns were better. We may have grown slower than our peers, but the
risks were lower."

HDFC Bank ventured into retail lending in 1998, a year before ICICI Bank. But
in products like credit cards, it was slow to get off the mark. For instance, its
credit cards were launched only two years ago.

By then ICICI Bank had been present in the credit card business for nearly three
years. According to some industry experts, growth for ICICI Bank may have
come at the cost of quality.


The number tell story

Share of the wallet

Bank Bank

Branches 4,805 4867

ATMs 12,260 14367

Cities 2,657 932

Total assets
₹1,018,170 879,189.16

₹95,461 72,385.52

Credit 85.4
cards (Mn) Lacs

(Mn) 82,724

Profit 67.77
(crore) Billion

ICICI Bank has issued 54.6 million credit cards -- that is more than twice the
number of HDFC Bank's credit card users. However, industry observers point
out that ICICI Bank's effective users for credit cards may not be high.

However, consultants believe that HDFC Bank could have leveraged its parent's
customers far more effectively to cross-sell products and grow faster.
Says a banking consultant, "While HDFC Bank has about two years to get ready
for the future, ICICI Bank probably has three years." Should HDFC Bank and
its parent be merged, it could catapult them to a new league.
But round one of the banking sweepstakes has clearly gone to ICICI Bank.
Calling the customer

Both players targeted the same customer -- the upper-middle class. The
marketing channels used by both, including direct sales agents (DSAs), were the

Yet, there was a difference. While ICICI settled for nothing less than film star
Amitabh Bachchan as an ambassador, HDFC Bank chose to rely on the trusted
lineage of its housing finance parent, Housing Development Finance
Corporation (HDFC).

"While HDFC was no doubt a great brand, it was a single-product brand. Hence,
it was a challenge to make it work with other products."

In the past two years, the bank has spent less than Rs 100 crore (Rs 1 billion) on
advertising and publicity (In comparison, ICICI has spent Rs 185 crore).

HDFC Bank says that its spends have always focused on other channels such as
direct sales and phone banking rather than mainstream advertising. It made
sense to get the direct communication right rather than focus on the masses.
Meeting the customer face-to-face is important."

Is the brand visible enough? The ICICI brand does have greater visibility,
though that HDFC Bank is well-known even in smaller towns.


 ICICI Bank and HDFC bank has to improve its brand image, i.e. it
has to position itself in the minds of prospects in a better way in
comparisons to others.

 It should provide better career opportunities for the retention of its

potential advisors.

 People who deal with customers should have complete knowledge

about the different products and their features.

 It should more emphasize in advertising, as it is the most powerful

tool to position ant brand in the mindsets of customers.

 It should provide online training and for those who are in jobs and
want to become advisors ICICI should provide evening training
classes, so that they can join the training after doing there jobs.


In the last two years, spending pattern through plastic money has changed
drastically. Travelling, dining and jewellery are the top three purchases that
Indians make 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 in 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
per cent so 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.

After doing a research and studying the materials available on internet,

newspapers, and journals. I want to conclude that people prefers ICICI Bank
more than HDFC


 Marketing Management (10 Edition), Philip Kotler
 Research Methodology (2nd Edition), C.R. Kothari