An Analysis On Uses of Plastic Money in Kodagu

“An analysis on uses of plastic money in Kodagu”
CHAPTER 1
1.1 INTRODUCTION
Money is regarded as a medium of exchange and payment tool. Initially barter system
was used as the significant mode of payment. Over the years, money has changed its form
from coins to paper cash and today it is available in formless form as electronic money or
plastic card. The major change in banks which has been brought in by the technology is
through introduction of products which are alternative to cash or paper money. Plastic
cards are one of those types of innovations through which the customers can make use of
banking services just by owning the card issued by bank and that too without restricting
himself in the official banking hours. Plastic cards as the component of e - banking have
been in use in the country for many years now.
Plastic cards, or what is described as plastic money, happen to be the best-known

method of payment in this day and age. Most of us did not grasp how quickly that little
piece of plastic took its place in our lives. Credit cards online will continue to be used for
the multiple advantages they offer us.
We realize all too well that online credit cards work as an expedient payment option to
pay for our many purchases. Imagine stashing money in all your pockets as against
merely a little plastic rectangle.
Additionally, at present going around with a large quantity of cash on you is not a wise
choice in terms of safety. The safety issue assumes even greater significance when you
are visiting someplace far. Money is easy to spot and pick-pockets and thieves are able to
use nicked money equally easily because these funds are not traceable. Online credit card
dealings however, are detectable and carry an audit trail as well.
Most times, people find using online credit card their way out of an otherwise hopeless
situation. Several people found themselves purchasing airline tickets on-line, reserving a
hotel room, or renting a car. Then again, there are times when you require some more
ready money at once. In these kinds of emergency situations, you can switch to using
credit by using your credit cards online. Generally, credit card online give a maximum of
fifty days of interest free use of your credit. Likewise, some merchants state, in their
product promotion, that you have the ability to get yourself a high-priced article (e.g.
USD 6,000) today and pay for it in a particular number of even installments. Accordingly,
Department of MBA Page 1

you can handle your finances efficiently so as to remit your periodic payments and do so
without any additional charges for interest.
A lot of individuals look at your credit report (which lists your credit history and
is created and updated using information from banks, merchants and other creditors) to
evaluate you, consequently it`s crucial that your credit report is as good as possible.
Potential employers, insurance establishments, mortgage organizations, and several other
institutions will attempt to get an idea of your character by going through this factual
data. Possessing credit cards online and availing of it wisely will help create a positive
credit history.
There`s no need to get anxious over whether you`ve adequate money on your person or
whether you don`t. Nor do you need to use up large chunks of your time waiting in
lengthy queues in a bank branch, or spend time drawing money from an automatic teller
machine when instead you can always take your credit card wherever you go, and that
takes care of all your financial needs.
Several online credit card have travel insurance (that is, insurance to cover problems
associated with traveling) built into them as an inherent function. Consequently, if you
are among those that are often on the move, this feature might be a tangible plus point.
Even so, you must make sure to confirm if this travel insurance provides adequate
coverage for you. In addition, carefully go over the terms and conditions that come with
such insurance. Misplaced baggage is something which is almost always taken care of
with such insurance.
You may treat your online credit cards as an additional supplier of money when
abroad - and this whenever you don`t wish to avail of your prepaid visa master card as
your first source of funds, in order to avoid paying commission on out-of-country
transactions. Therefore, when you find yourself strapped for money or travelers` checks
you can bank on your charge cards as a fallback option. With such a plethora of useful
features when you`re under financial stress, it is a convenience that you cannot (rather
mustn`t) avoid. Indeed, online credit card is really an essential commodity in today`s
global environment.

Plastic Money or Polymer Money, made out of plastic, is a new and better way of paying
for goods and services and is used every day in place of actual bank notes. According to
Business
Dictionary, plastic money is a generic term for all types of bank cards, credit cards, debit
cards, smart cards, Automated Teller Machine cards and charge cards. In recent years,
there has been a dramatic growth in the usage of plastic money among the people.
1.2 HISTORY
With hundreds of millions of plastic cards in circulation today, these Plastic cards have
become a way of life. India alone is home to millions of them. Initially positioned as a
status symbol these plastic cards have caught on in a big way amongst the educated
population of the country. Extending credit to their customers has always been an
extremely common practice .However in the early 1940s, when individual retail
merchants in America found it more and more difficult to afford credit to these patrons,
financial institutions came into the picture.
1946 -The earliest plastic card was called Charge - It and was invented in 1946. It
revolved around a system of credit developed by John Biggins a credit consultant at
Flatbush National Bank, Brooklyn, New York. This "card" allowed the customers to
charge local retail purchases. The merchant deposited the same at Biggins Bank. The
bank reimbursed the merchant and collected payment from the customer.
1951 -The Franklin National Bank in Long Island New York issued the first official credit
card .In 1951, a Mr. Frank McNamara had just finished dinner in a New York restaurant
when ,to his acute embarrassment, he discovered that he had left his wallet in another suit.
While talking the restaurant owner into letting him pay the bill the next day, an idea for a
new credit card was already being concocted in his mind. Within a few months he formed
a company called Diners Club and convinced 27 restaurants and 200 people to join it.
1958- American Express saw this as direct competition to its traveler's cheque
division and brought out its own charge card in 1958. Within three months they managed
half a million cardholders.

1960 - Bank of America introduced its own card called Bank Americard. Beginning with
a small group of cardholders and merchants, the bank began to license regional financial
institutes to act as Bank Americard for their region. Bank Americard grew and in the next
few years more and more communities across the US became serviced by a regional
member
1966 -Fourteen US banks in Buffalo, New York formed Interbank - a new association on
the same guidelines.
1967- Four California banks changed their name to the Western States Bankcard
Association. They opened membership to other financial institutions in the west the
product called Master charge. Eventually all financial institutions and banks interested in
issuing credit cards became members of either Bank Americard or Master Charge. All
parties benefited from this system and led to rapid growth in cardholder accounts,
merchant accounts and sales volumes.
1977 – Bank Americard became VISA and in 1979 Master Charge became
MasterCard
1980-With only two players in domestic card industry, HSBC and Citibank the number
swelled to over 25 in the year 2010.
1981 – 2010 The market has virtually grown to over 4 million cards with over 25-30%
of compounded annual growth in new cardholder’s base.
The recent growth in the use of plastic money after 2010 mainly credit and debit cards has
been phenomenal. There are hundreds of millions of credit cards in circulation today;
these little rectangular pieces of polymerized substance have become a way of life. India
alone is home to millions of them.
Spending pattern through plastic money has changed drastically. Travelling, dining and
jewellery are some the top purchases that Indians make through credit cards. Few 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. This growing trend will soon rise up to the

point where the plastic money will completely replace the need for carrying cash. Will
this change be for good or bad only the future will decide?
The recent growth in the use of plastic money mainly credit and debit cards has been
phenomenal. After the Demonetization by the Prime Minister Mr. Narendra Modi and his
emphasis on Cashless Transaction, Initially positioned as a status symbol, these plastic
cards have caught on in a big way amongst the educated population of the country.
1.3 NEW AVENUES FOR PLASTIC CURRENCY

In a single masterstroke, the Modi government has tackled all three diseases currently
plaguing the economy. These are a parallel economy, counterfeit currency in circulation,
and terror financing.
Furthermore, the Indian economy has gone a “reset” with huge positive implications for
liquidity, inflation, fiscal and external deficit in the short term. With this move, India’s
position on transparency and corruption will improve on in the global stage, thus adding
to its investor appeal.
As the process of demonetization comes into force, we should also look towards plastic
money as a new alternative to cash.
Also, we should take a cue from the example of Sweden. Sweden is among the happiest
and least corrupt countries on the globe. In Sweden, cash transactions make up barely 2%
of the value of all payments. This figure is estimated to drop to 0.5% by 2020.
Astonishingly, about 900 of Sweden’s 1,600 bank branches no longer have cash on hand
or take cash deposits.
India in dire need for breaking through the barriers of corruption can take much
inspiration from this country’s rapid adoption of plastic money. Plastic money can
eliminate the need for carrying huge cash, which is also risky and inconvenient.
It also minimizes the risk of loss or theft as in the case of plastic money like debit/credit
card, you can report any matter of theft or loss to the bank and block the card for avoiding
misuse. One of the unique advantages it can provide is the convenience of using it
anywhere even abroad.
Future Prospects

In present technological world, we need secured payment options. Smooth, simple and
secure payment processes will help bring about behavioural changes and faster adoption
of digital payments and banking among un-banked segments. When new players enter the
market, each with a slightly different take on the market and with differing business
models, the increased competition will help the environment and offer more options for
consumers to choose from. A larger pie with more players is definitely good for the
changing dynamics of the payments industry, which is still nascent in India. Indian
consumption is still dominated by cash, with cards contributing only 5 per cent of the
personal consumption expenditure. In developed countries, 30-50 per cent of spends
happen through cards. So there is huge growth opportunity. The rapid growth of smart
phones, Internet penetration and e-commerce is complementing these; card payment
volumes have been growing in excess of 25 %. We expect this trend to continue, aided by
the continued increase in debit card activation and usage; debit card transactions have
been growing at 31 per cent each year. Intense competition and strategic collaboration
among existing and new market participants like the payments and small banks and
wallets will help scale up acceptance and foster more creativity, innovation and consumer
choice. According to him, the future holds exciting times for the payments industry in
India, as all stakeholders and regulatory authorities come together to achieve a “less-cash
dependent” and eventually “cashless” society.
The credit card industry in India sees greater acceptance among consumers this year.
According to World line India Card Payment Report 2014-15, the credit card base grew at
9.8 per cent in the past year. World line India is a leader in the payment and transactions
services in the country. Alternative methods like mobile wallets and prepaid cash cards
accounted for 3 per cent of digital transactions. This industry has been growing steadily
over the past few years. Card transactions, both by debit and credit cards, are on an
upward trajectory. There are interesting dynamics at play in the Indian payments industry.
1.4 PLASTIC MONEY: SIGN OF MODERNIZING ECONOMY
Money is always regarded as an important medium of exchange and payment tool.

Initially barter system was used as the significant mode of payment. Over the years,
money has changed its form from coins to paper cash and today it is available in formless
form as electronic money or plastic card. Hence, the major change in banks which has

been brought in by technology is through introduction of products which are alternative to
cash or paper money. Plastic cards are one of those types of innovations through which
the customers can make use of banking services just by owning the card issued by bank
and that too without restricting himself in the official banking hours. Plastic cards as the
component of e banking have been in use in the country for many years now. However,
the card-based usage has picked up only during the last five years. Payment by cards is
now becoming a much preferred mode for making retail payments in the country (Report
on trend and progress of banking in India 2006-07, RBI). Thus, plastic cards are such
payment tool which gives a customer an opportunity of noncash payment of goods and
services and are designed to facilitate small value retail payments by offering a substitute
for bank notes and coins and thus to complement traditional payment instruments. The
role of various parties involved in plastic cards payment
i. Customers or Cardholder: The authorized person holding the card and can use it for
purchase of goods and services also.
ii. Card issuing bank: The bank or institution which issues the card to its eligible
customers.
iii. Merchants: Entities which sell the goods and services to the cardholder and duly agree
to accept the card for payment.
1.5 PLASTIC CARDS: A KEY ELEMENT OF ELECTRONIC
Managing an account Money is continually seen as a basic trade of exchange and

installment. At first, system was used as the immense technique for installment.
Consistently, money is changing its shape from coins to paper and today it is available in
the form of electronic money or plastic card. Along these lines, the genuine change in
banks which has been obtained by rapid change in technology is through introduction of
things which are differentiating alternative to cash or money. Plastic card is one of those
sorts of modernization way through which the customers can make use of keeping cash
benefits just by owning the card issued by bank and without any fear. Plastic cards as the
piece of electronic-saving which have been being utilized in the country from long time;
In any case, the card-based use has gotten the latest five years.

Installments by means of cards is by and by transforming into an especially needed mode
for making retail portions in the country (Report on example and advance of dealing with
a record in India 2006-07, RBI). Thus, plastic card is a device which gives to customer a
possibility of non-cash stock support to financial declarations. These lines are enhancing
card as an instruments. The piece of various social events related with plastic card as per
Retail Payment System, 2004.
1.6 RESERVE BANK OF INDIA PITCHES FOR CASHLESS

SOCIETY
With the Indian economy expanding rapidly at more than 7.5% per annum and the
middle-class budding, several financial firms believe and predict that the use of plastic
money in India will become very popular. However, according to the recent estimates by
the Reserve Bank of India (RBI), the use of cashless transactions through credit card
usage among Indians is actually falling. The Reserve Bank of India (RBI) has prepared a
road map to provide card swipe machines to more than one crore retail businesses in the
next three years to promote electronic transactions for ushering in a less-cash society in
the country.
According to the road map prepared by the central bank for cash-less transactions, all
schools and colleges in the country will also be equipped to handle plastic transactions.
According to an RBI estimate, only six lakh retail traders accept credit card in the
country. Steps are being taken to make the facility available to at least one crore retailers
by 2015.The government and its financial institutions will initially bear the cost of each
card swap machine made available to retailers.
1.7 ABOUT CREDIT CARDS & DEBIT CARDS
The evolution of plastic money dates back to the 1920s, when the first payment
card was introduced in the USA. Diners Club and American Express launched the world's
first plastic card in the USA, in 1950. The first credit card was introduced by Diners Club
in 1951. The global card market is dominated by two US-based players, Visa and
MasterCard. Visa introduced its first credit card, Bank Ameri card in 1958, which went

on to become a great success acquiring universal merchant acceptance. Visa's card base
increased significantly through the decades and reached the one billion mark in 2000.
MasterCard International was established in the 1970s.
In the 1990s, having covered a majority of US and European markets, Master Card and
Visa shifted their focus to the East, especially the Asia Pacific region. By 2000,
MasterCard and Visa had established their debit cards as well in the Asia Pacific region.
In 2000, Visa debit cards reached the 48 million mark in the Asia Pacific region, while
the MasterCard debit card base touched the 37 million mark. MasterCard's credit card
base touched 80 million during the period.
Table 1.1 Difference between credit card and debit card
BASIS CREDIT CARD DEBIT CARD
About Credit cards are lines of Any time you use a debit
credit. When you use a card to buy something,
credit card, the issuer money is deducted from
puts money toward the your account. With a
transaction. This is a loan debit card, you can really
you are expected to pay only spend the money
back in full (usually you have available to
within 30 days), unless you.
you want to be charged
interest.
Connected To Not required to be Checking or Savings

connected to a checking Account
account.
Monthly Bills Yes No

Application Process Somewhat difficult, Easy, with basically no
depending on one's credit barrier to receiving a
score and other details. debit card.
Spending Limit The credit limit set by However much is in the

the credit issuer. Limits bank account connected
increase or stay the same to the card.
over time as a borrower's
creditworthiness
changes.
Interest Charged If a credit card bill is not No interest is charged

paid in full, interest is because no money is
charged on outstanding borrowed.
balance. The interest rate
is usually very high.
Security Credit cards in the U.S. A PIN makes them

are not very secure in secure so long as no one
and of themselves steals the card number
because many still use and PIN, and as long as
dated card security you don't lose the card
technology. However, itself. If the card/info is
consumers are not held stolen, debit cards are
liable for this poor very insecure.
security.
Fraud Liability Low. Rarely held liable High. If someone steals

for fraudulent activity. If your card and makes
you are, you are only purchases, that money is
held liable for a removed from your bank
maximum of fixed account. Investigating

amount. this damage takes time.
The longer you wait to
report the fraud, the more
likely you will be held
liable for your own
losses.
Credit History Responsible credit card Does not affect credit

usage and payment can history.
improve one's credit
rating. Credit cards
typically report account
activity to at least one of
the three major credit
bureaus on a monthly
basis.
Overdraw Fees Low. Some credit card High "overdraft" fees.

companies allow Possible to overdraw
overdrawing amount amount over the account
over the maximum credit limit.
line with a fee.
PIN In the U.S., this is Usually
uncommon, but PINs are
being phased in.
1.8 VARIOUS FORMS OF PLASTIC MONEY
1.8.1 CREDIT CARD

With a transaction using the credit card, there is no need to pay hard money to the
merchant or to Credit Card Company instantly.
That transaction amount is paid by Credit Card Company to the merchant and then you
can pay it to Credit Card Company during your billing period. Credit card facilitates your
payments during given period and in installments
SBI is also offering ‘zero annual fees’ SBI credit cards “Unnati” for a period of 4 yrs to
all its Accounts holders including “Jan Dhan accounts” with balance of at least Rs 25000.
1.8.2 DEBIT CARD


The debit card is the most real plastic money. Debit cards can be used for paying for fuel,
shopping, grocery, withdrawing money from the ATMs. You need not carry hard cash to
buy goods and services; the debit card does it for y
1.8.3 CHARGE CARD

Carrying all the features of credit cards, a charge card allows you to pay off the entire
billed amount billed by a due date. A high late payment charge is paid in case you default
on the payment.
1.8.4 SMART CARD

With the use of an electronic chip, a smart card stores cash. It is mainly used to pay for
small purchases, for example, tea or bus fare. This card requires no identification,
signature, or payment authorization.
Smart card reading machines deduct the exact amount of purchase from the smart card
during payment. No change is provided. Currently available only in very developed
countries like the US, it must be promoted in India too.
1.8.5 PHOTO CARD

The photo card may be debit or credit card which has an imprinted photograph for
identifying the user, thus it is considered safer. It may function as the identity card as
well.
Being a debit or credit card, you can use this card in every kind of financial transaction.
1.8.6 GLOBAL CARD

If you are traveling abroad for either business or personal reasons, global cards provide
the flexibility and convenience to use a credit card instead of cash.
You can use it for shopping as well as various other transactions
1.8.7 CO-BRANDED CARD


Co-branded cards are credit cards carrying exclusive benefits for the consumer as they
shop at various places. They are issued by card companies having tie-ups with a popular
brand.
Consumers can earn reward points to shop more and avail discounts with this type of
card.
1.8.8 AFFINITY CARD

Affinity cards are credit cards with the link to popular non-profit organizations/
institutions. Whenever a consumer uses the card, there is contribution of a certain
percentage to the organization /institution by the card issuer.
ADD-ON CARD
An add-on card is basically an additional credit card within the overall credit limit. These
are issued in the name of family members like father/ mother/ spouse/ brother/ sister/ all
children above 18 years of age. The main billing statement reflects the purchase details of
the add-on card.
This card is emerging as a convenient mode of payment in India. Why we should move
towards

1.9 PLASTIC CURRENCY
There is a huge potential for use of plastic money in India. Apart from providing
enhanced convenience to the customers, plastic money can ensure transaction secrecy and
integrity to them. With demonetization, as the interest rates can go down, the use of
plastic money can get further encouraged. Also, as you use credit cards and other such
options, your credit rating and CIBIL score will improve, leading to better chances of
availing a loan.
Also, the banking service sector can benefit a lot from this move. With quick payment
method, plastic money can ensure higher customer retention for banks with an enhanced
level of customer satisfaction. The government can also plug leakages of government
funds as plastic money will ensure electronic payment.
If the government starts to use plastic money, it will enable effective resource allocation
with fewer chances of corruption. Also, there will be no forgery headaches with plastic
money having a lifespan more than four to five times of paper money.

1.10 MERITS OF PLASTIC MONEY:
 Reduces the need to carry cash: Plastic money has not only provided us with
convenience, but it has also eliminated the inconvenience that is caused in carry cash. For
instance, when the job of a working executive involves a lot of inter-state travel he/she
has to entail numerous expenses like travel, stay, food etc. In such a case it is not only
troublesome to carry money but also there is a risk of theft.
 Reduction in crime: With credit or debit cards’ being used, one benefit is the
reduction in thefts and crimes. It is very difficult to hack the PIN of a card, for which a
person needs to know specific techniques. Thus the credit card holder can be sure about
the safety of his/her money to some extent. Also in the event the card is stolen, the credit
or debit card holder can ask the bank to block the card as soon as possible.
 Credit cards provide a credit facility: With the advent of credit cards an

individual can avail the benefits of credit facility and pay at a later date. This kind of
benefit is not available when cash is being used for making a purchase. Also credit cards
dismiss the need for go behind people to borrow money in case of emergencies and
financial needs.
 International acceptability: Owning an international debit or credit card

provides the ease to make purchases with that card itself rather than worrying about
running out of cash. Also it eliminates the inconvenience caused in conversion of
currency.
 Ease in making payments from home: Credit cards and debit cards can be used
easily for making online payments, transfer of funds and various other transactions. It is
very easy to make payments on online shops through plastic money. Further some online
retailers also provide discounts on making payments through credit and debit cards.

1.11 DEMERITS OF PLASTIC MONEY:
 Plastic money cannot be used everywhere: There are several places where there
is a need for cash only. For instance purchasing utilities from a small retailer or for
payments to milkman, newspaper boy, etc. Further religious places like temple generally
accept cash as offerings. Thus plastic money cannot completely replace cash and thus
cannot be used everywhere.
 Plastic money is also not completely safe: When we are making an online
purchase through a form of plastic money there a certain degree of risk involved as we
share our bank details and other financial information on the internet which is not always
a safe place. There are certain malicious websites on the internet with the intention of
looting people, thus it is very important to be careful while sharing an important detail
online.
 Interest liability: While it is true that credit cards give us ample time to pay for
purchases made through it, it can also not be ignored that on the lapse of that period the
card holder has to pay interest amount. This is not the case when making payment
through cash.
 Impulsive purchases: Having the ease to make payments makes a person unable

to keep a control on his/her purchases and enable the person to oversee if the purchase is
cost worthy or not.
 Damaged card: Sometimes the magnetic chip of the cards gets damaged due to
wear and tear or mishandling by the holder. In such an event it the person feels the need
to carry cash to avoid embarrassment. Although this is a rare case but it cannot be
avoided.

1.12 ISSUES THAT CAN BE FACED WITH PLASTIC CARDS
Plastic cards were launched with the purpose of making transactions convenient.
However, there have been cases of concern with incidents related to duplication of credit
cards, robbery of ATM cards. In order to succeed in the Indian market, plastic card
issuers should improve their customer service security.
Plastic money transactions have been in some trouble due to poor banking infrastructure
and machinery. Also, there is a major challenge of penetrating rural parts of India with
this new technology.

1.12.1 STAY AWARE
You must also stay aware of not sharing your ATM PIN or online banking password with
anyone. Even though you know a person very well, sharing your banking credentials may
land you in much trouble. So you must also stay alerted and keep your banking
credentials memorized. Even writing it on a paper or storing it on your computer is not a
risk-free idea.
The use of plastic money began with the rise of India as the IT hub. This current step of
demonetization can provide a further thrust to this concept. Now it is on the part of
Government and banks to further move India towards becoming a cashless society. As
there are chances of plastic money being a norm, the government should ensure adequate
use of technology and resources to make it a win-win situation for all.

1.13 OBJECTIVES OF THE STUDY
 To know the problems faced by respondents using plastic money.

 To find out the importance of plastic money in the present era.
 To find out the usefulness and popularity of plastic money.
 To assess the problems and reasons for the non usage of plastic money.
 To know the preferences behind using the plastic money.
1.14 SCOPE OF THE STUDY
The paper money has small life cycle and it cannot be recycled as compared to plastic
money because which has long life cycle and can be recycled for further utilization. Due
to this problem faced with the paper not the invention of payment has be introduced.
Another problem that arises is that one cannot keep the huge amount of cash with oneself
and this gave an impetus to the idea of plastic cards which is known as plastic money
accepted worldwide and one can keep the huge amount with oneself while going
anywhere in the world.
1.15 RESEARCH DESIGN
The research was an exploratory followed by descriptive one because the entire project
was based on questionnaire and analysis which is of exploratory nature followed by the
detailed description and analysis so the project is of descriptive design also.
The nature of the study was statistical pertaining actual field conditions .The reason for
choosing this type of data is qualitative research provides insights and understanding of
problem setting while quantitative research seeks to quantify the data and typically
applies some form of statistical analysis.

Sample Unit
Individuals who are salaried people and students of various colleges were chosen as
samples.
Sample Size
Total Sample size was of 250
Sampling Technique
The sampling method used was Non probability Convenience sampling because the
respondents chosen for filling the questionnaire were chosen conveniently from the area
of study which was entire Chhattisgarh State.
Data Sources
Primary Sources: This data include both qualitative and quantitative data. Data were
generated through questionnaire as a research instrument.
Research Approach: Survey method
Research Instrument: Questionnaire
Types of Questionnaire: Structured
Type of Questions: Open-ended and Close-ended questions
Secondary Sources: The data was collected from journals, internet, reports and
publications.
1.16 HYPOTHESIS
H0: There is no relation between the gender and the convenience of payment made by the
plastic money.
H1: There is significant relation between the gender and the
convenience of payment made by the plastic money.
H0: There is no relation between the gender and the type of money used for their daily
purchases.
H1: There is significant relation between the gender and the type of money used for their
daily purchases.

H0: There is no relation between the gender and the fear about the misuse of the plastic
money.
H1: There is significant relation between the gender and the fear about the misuse of the
plastic money.
H0: There is no relation between the gender and the types of card used by the people.
H1: There is significant relation between the gender and the types of card used by the
people.
1.17 LIMITATIONS OF THE STUDY
 The sample size is very small compare to population of the study.
 Geographically the scope of this study is limited.
 Primary data has its own limitations which might affect the conclusion of this study.

CHAPTER 2
2.1 LITERATURE REVIEW
1. NAME: Chakravorti and Emmons

YEAR: (1997), (2000)
The popularity of credit cards as a payment medium has been attributed to the
convenience of not carrying cash and checks, the limited liability of lost/ stolen
cards, and additional enhancements, such as dispute resolution services and perks
(i.e., frequent-use awards programs). They are frequently used for convenience,
telephone and Internet transactions.
2. NAME: Plouff, Yandenbosch and Hullan

YEAR: (2000)
TITLE: “Why smart cards have failed looking to consumers and merchant
reactions to a new payment technology”
describes that more than a decade, bankers and other outside financial services
community such as hardware manufacturers have sought to solidify the place of
smart card technology as a viable retail point-of-sale alternative and, more boldly,
as an outright replacements for cash in everyday consumption situations around
the globe. Despite strong development efforts and numerous fact- finding market
trials, many banks have found smart card technology to be a losing proposition.
This article presents a detailed case study of both consumer and merchant
adoption of one smart card –based retail point-of-sale system. The system, called
“Exact”, was test marketed for a full year in Canadian market. Various perceptual
and demographic data from consumers as well as firm –level data from retailers
are both presented and assessed. The ensuing discussion offers pragmatic

suggestions for those in the financial services community as to how the apparent
difficulties and shortcomings of smart card technology may be overcome.
3. NAME: Steindl
YEAR: (2000),
TITLE: “Credit cards, Economization of money, and Interest Rates.”
Shows the effect of interest rates on use of credit cards, which are increasingly
used to finance consumption. The corollary is a reduction in money demand,
which reduces the interest rates. Greater credit card usage increases the demand
for credit, which raises the interest rate. Three models employing a credit market
are used to resolve the problem. The principal result is that each establishes that
the interest rate must rise. An additional implication is the counterintuitive result
that credit does not simply substitute for money in financing expenditure; rather
increased credit card use must result in increased consumption expenditure.
4. NAME: Warwick and Mansfield

YEAR: (2000)
TITLE: “Credit card consumer: college student’s knowledge and attitude”.
Given the proliferation of the credit card industry in today’s US household, and
the aggressive promotional tactics employed to get college students to sign on as
customers. This exploratory study takes a look at the credit card activity of
college students at Midwestern campus. The majority of students surveyed did
not report knowledge of their credit card interest rate. Students appear to have a
realistic attitude toward using credit cards, although not knowledgeable about the
details of their card. This study raise the question of whether universities and
business schools are doing a better job of preparing their students to be
knowledgeable consumers in the market place or not.

5. NAME: Leung and Lai

YEAR: (2001)
TITLE: “Improving the quality of the credit authorization processes a
quantitative approach”.
This paper proposes that the quality of a company’s authorization system should
be measured by two major considerations. First, the system should enhance
quality of customer’s service by reducing the waiting time at the point of sale.
Second, it should reduce the risk of accepting transactions of bad credit. In this
paper, a major credit card company is used to demonstrate how the credit
authorization process can be improved using a quantitative approach.
Opportunities for quality improvement were first identified though brainstorming
sessions with top management, by using quality improvement tools. A queuing
model was then used to redesign the authorization process. Finally, simulation
model was used to test and evaluate the new process design. As a result of these
improvements, it was determined that more than US$2.5 million were saved
annually and authorization efficiency was improved by more than 40 percent.
6. NAME: Azhagaiah
YEAR: (2002)
TITLE: “Credit creation through plastic money.”
This paper focuses the issues of credit cards usage among consumers. It exhibits
the recent development, evaluate the present status ad assesses the future of the
consumer indebtedness by credit card debt. It also discusses the financial position
of the banking sector in India. Strategies used by the banks to meet competition in
credit/debit cards are also discussed. Credit to individuals and households has a
vital role to play to create bank’s credit and money supply. Author point out that
the role of credit cards in the money market, in the years to come, will be very

bright. There is no doubt, the banks which concentrate more on credit cards will
get more benefits by means of credit creation.
7. NAME: Lee, Jinkook

YEAR: (2002)
TITLE: “Consumers Use of Credit Cards:”
Store Credit Card usage as an Alternative Payment and Financing Medium.”

asserts consumers use of store-issued credit cards with particular attention to their
function as an alternative payment and financing medium. Using 1998 survey of
consumer finances data, the researchers found that credit availability through
bank cards is negatively correlated with consumer use of store cards as a
financing medium, suggesting the role of store cards as a supplementary credit
line. A negative relationship is also found to exist between consumer’s bankcard
usage and their use of store cards for a transaction purpose, indicating that store
cards function as a substitute payment medium. Consumer’s usage of store cards
varies according to function and is related to number of variables including the
use of bank cards, credit history, and attitude towards credit, income, education
and ethnicity.
8. NAME: Chakravorti
YEAR: (2003)
TITLE: “Theory of credit card networks:”
A survey of the literature” shows that credit card provide benefits to customers
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. The cost and benefits of credit cards to
network participants are discussed. Focusing on interrelated bilateral transactions

several theoretical models, have been constructed to study the implications of
several business practices of credit cards networks.
9. NAME: Gupta
YEAR: (2003)
TITLE: “Legal and regulatory framework of credit cards”
Asserts that the regulations of credit card business in India are diffused and need
to be streamlined. Whereas in developed countries the law on credit card business
in comprehensive and straight forward, its Indian version requires a structural
change. Hence, there is a need to explore that various legislative premises of the
inferior and unclear Indian version for protection of interest of cardholders and
healthy growth of the industry.
10. NAME: Saha

YEAR: (2003)
TITLE: “The booming credit card business of Indian banker.”
In this study analysis has been done of the credit card business in India. Article is
both from the banker point of view and from the user’s point of view. It is
estimated that the credit card volume is increasing around 15% p.a. on average
for last 10 years and volume of transaction increased by 20% on an average in
last 10 years in India. Various hypothesis and objectives are set to find out which
bank offer varieties of services to consumer in relation to credit card. A
comparative analysis is made for all the credit cards. In general, most of the credit
card is doing very well and the competition is cut throat. Different factors such as
income level, fees customers’ service network, add on card facility, revolving
credit facility, insurance facilities, cash withdrawal charges, lost card liabilities
etc. taken into account for selecting the best credit card provider in country. The

study also finds that city bank is the best card which provides all the facilities at
the minimal charges.
11. NAME: Bandyopadhyay

YEAR: (2004)
TITLE: “Credit cards look for an Ace”
Put the light on various issues like, major card players are issuing cards without
much checking credentials. It adds to non performing assets [NPA] levels in its
portfolio but overall, about 0.6 percent of personal consumption expenditure in
India is through credit cards. He suggested that (I) the increasing card use could
be by making all utility payments through cards by installing more electronic
draft capture (ii) the government can do by waiving the tax on credit cards which
is a big disincentive for card users (iii) to bring down the default rate, bank must
set up credit bureau. This will enable banks to detect the first sign of default in
advance and sound a red alert so that prospective defaulters can be weeded out.
12. NAME: Bhargava

YEAR: (2004)
TITLE: “Debit cards: A new generation plastic money”
Analyses that debit cards are fast catching up with the customers. A combination
of factors like ease of availability, debit-averse profile of customer and zero
interest rates are propelling the usage of Debit Cards. The study emphasizes to
increase the usage of these cards, bank will need to improve infrastructure and
continues to focus an increasing installations of point of sale [POS] in smaller
cities and on the locations which are frequently used by cardholders, and to
develop new marketing programmers that educate customers on the benefits of
replacing cash with plastic.

13. NAME: Braunsberger

YEAR: (2004)
TITLE: “The effectiveness of credit–card regulations for vulnerable
consumers”.
The study investigates how vulnerable consumers (i.e. College students) might
respond to the revised credit card disclosure requirement (i.e. amendments in
Truth in Lending Act) and investigates credit card knowledge of college students.
The study examine external validity issues, that is, whether urban college students
are more knowledgeable about credit cards than rural students, and whether adult
populations are more knowledge than student populations. This study further
investigates the relationship among objective and subjective knowledge and
product usage. The result shows that consumer in general is not very
knowledgeable about credit cards. In order to avoid government regulation of the
industry, it is recommended that credit card issuers become involved in educating
consumers.
14. NAME: Cunningham

YEAR: (2004)
TITLE: “College Student credit card usage and the Need for on campus
financial counselling and planning services”.
The purpose of this study was to examine the use of credit cards among college
students and the need for on-campus financial counselling and planning service.
The research objective was twofold: (a) to determine if college students are
responsible with their credit cards and (b) to evaluate the need for on-campus
financial counselling. Participants in the survey (N=110) completed a survey

consisting of various question about students’ use of credit cards. Results showed
that while a majority of the students who completed the survey were very
responsible with their credit cards, there as a group (composed of study) who
were having significant credit problems. The paper concludes with suggestion
regarding on campus financial counselling services.
15. NAME: Easwar and Kumar

YEAR: (2004)
TITLE: “Credit cards: on a growth trajectory”
That the perception of owning credit card has changed and they are viewed as
being convenient substitute to carrying cash and also availing credit for short
period. But in the context of home country, India ranks at the bottom in terms of
usage of credit cards, when compared to China, Taiwan and Malaysia.
16. NAME: Goyal

YEAR: (2004)
TITLE: “Role of supplementary services in the purchase of credit card services
in India”
Describes that service products being intangible and experiential in nature are
different to evaluate prior to purchase and consumption. Consumers perceive risk
while purchasing services and rely on various information sources to make a
purchase decision. In services, personal sources of information and considered
more than non personal sources of information. The present study focuses on
understanding the significance of supplementary services as non personal source
of information of consumers for pre-purchase evaluation of credit card services.
In other words, whether information regarding supplementary services can help
consumers make pre-purchase evaluation of credit cards. In addition to pre-
purchase evaluation, the impact of supplementary services is studied towards
post-purchase evaluation credit card services. Supplementary services being a
part of full service product offer by marketers can be utilized as a beneficial tool
to create interest and developing awareness among consumers.

17. NAME: Hogarth and Hilgert

YEAR: (2004)
TITLE: “Consumers resolution of credit card problems and exit behaviours.”
Using data from the survey of consumers, this study focuses on consumer’s
resolution efforts with credit card problems and the likelihood of “exiting”- that
is, discontinuing the use of a given credit card or of the financial institutions
associated with the card. Among all households with a problem, nearly two-thirds
(63 percent) were able to resolve their problem, while over half (55 percent)
exited. Exist was associated with marital status, race, how dissatisfied the
consumer was, the number of problem related to credit cards, and attribution.
Holding all the else constant, consumers who were likely to resolve their problem
were only half as likely to exist. Thus, credit card companies need to carefully
and quickly address their customer problems and resolve their complaints.
18. NAME: Humphrey

YEAR: (2004)
TITLE: “Replacement of cash by cards in US consumer payments”
An author uses over the past 25 years time series data. The results shows that the
share of cash in consumer payments appears to have fallen from 0.31 in 1974 to
0.20 in 2000, cheques replaced cash during the 1970, credit cards replaced some
cheques during the 1980, while debit cards replaced both cash and cheques in the
1990s. Author feels even though, cash is not projected to go to zero anytime.
19. NAME: Prasad

YEAR: (2004)
TITLE: “Product innovation-A suggestion from a Reader: KCC vs. ATM”
Article examined the utility of Kisan credit card from the point of view of both
the Kisan Credit Card (KCC) holders and commercial banks. It is an innovative
product designed by the government of India (GOI) in consultation with
RBI/NABARD. The facility of issuance of “cheque Books” to KCC borrowers is

one of the important improvement. But this product needs further improvements
by making it a technology driven to extension of Automated Teller Machine
(ATM) to agriculturists in rural and semi-urban areas. “KCC ATM CARD”
provides benefits to agriculturists as well as to commercial banks. Agriculturists
gets instant cash for agriculture inputs such as fertilizers, seeds, pesticides and
overdraft facility to current account holder holding “KCC ATM CARD” which
involves no cost and boosting self–esteem among farmers. On the other hand, by
providing the ATM facility, the commercial banks can reduce fixed cost per
transaction. Author feels that by extending technology driven products will boost
the image of commercial banks and helps to enlarge the base of his value
agriculture advance which could attract the more farmers to commercial banks.
20. NAME: Swan

YEAR: (2004)
TITLE: “A credit card: A competitive market”.
It observed that with the more entrants in the field of credit cards, major players
are trying to gain a market share with aggressive promotional strategies and
additional value added services. Some banks though offer international level of
services and credit support to card holders but had failed to make an impression
in the market due to lack of awareness and low key advertising. It also observed
that in spite of aggressive effort of the banks, vast majority of the Indian
population is yet to come to grips with credit cards.
21. NAME: Jagdeesh

YEAR: (2005)
TITLE: “Credit card fraud: causes and cures from professional’s perspective.”
Put a light on credit card fraud which is increasing worldwide. The culprit is not
only the outsiders but insider fraudsters who cheat their organization to make
quick buck. Bank credit card issuers lose about $1.5 to $ 2 billion every year
because of fraud. The VISA and the Master Card, the two largest credit card
issuers lose most. Major credit card frauds like unauthorized use of credit cards,
on line frauds, shave and paste of card, counterfeiting. Mail order fraud are the

techniques used by the fraudster. The author also discusses the tips for prevention
of frauds like using smart cards, computer edits, PIN numbers, and suggests that
it is in their own interest that the cardholders should keep their cards safely and
use the cards wisely to protect themselves from frauds.
22. NAME: Johnson

YEAR: (2005)
TITLE: “Recent development in credit card market and the financial obligation
ratio”
Exhibits that over the past fifteen years, U.S. household in the aggregates have
devoted an increasing share of their after tax income to the payment of financial
obligations. Much of the increase is attributable to a rise in the level of credit card
debt, which has raised the share of households’ aggregate after tax income that is
devoted to credit card payments. This article argues that three important
developments in the credit card market over the period account for most of the
rise in credit card payments relative to income and played a strong role in the rise
of the total financial obligation ratio (FOR). First, improvements in credit scoring
technology and the advent of risk based pricing of credit card debt have increased
the share of house-holds particularly lower income households with a credit
cards. Second, in the 1990’s , credit card interest rate begin to vary with changes
in broader market interest rates, which in turn led to an especially pronounced
decline in credit card interest rates turned sharply lower; the decline in credit card
rates raised the demand for credit card debt. Finally, household have increased
their use of credit card as a convenient means of paying for daily purchases.
23. NAME: Park and Burns

YEAR: (2005),
TITLE: “Fashion orientation credit card use, and compulsive buying.”
The study was to identify the direct impact of fashion-related factors on

compulsive buying and the indirect impact of fashion-related factors on

compulsive buying through credit card use. It was found credit card usage to be
the most influential factor followed by expenditure on fashion goods. Research
shows that fashion orientated consumers are heavy credit card users. Consumers
who tend to have fashion leadership and know the importance of being well
dressed might use their credit card more while those who have anti–fashion
attitude are least likely to use their credit cards. The authors observe that the
credit card is the most significant factor in encouraging compulsive buying and
suggest that since other antecedents of such behaviour are hard to pin down;
regulatory action should focus on the control of credit.
24. NAME: Pinto and Beth

YEAR: (2005)
TITLE: “Information learned from Socialization Agents: Is Relationship to
Credit Card Use.”
Shows that credit card use among college students has reached at unprecedented
level. As a result, there is a movement to educate college students for usage credit
card in a better way. This research examines the credit information provided by
four socialization agents (parents, peers media and schools). In addition, it
assesses the relationship between these socialization agents and the credit usage
behaviour of college students. Using paired sample‘t’ tests, the results indicate
that the amount of credit information given by parents is significantly greater than
the information from the other three sources (Schools, Peers and media). The
more information provided by parents, the lower the outstanding balance carried
by college students on their credit cards. Media sources, educational sources and
peer sources of information showed no significant relationship with credit use.
25. NAME: Sant

YEAR: (2005)
TITLE: “Credit cards emerging Trends and Prospects”
Shows benefits, growth/potential growth, usage pattern, technological changes,

delinquency rates, and fraud settlement, by the credit card companies. Survey
shows that spend per card in India are very low at around Rs. 20,000 per year

against international average of around $900 (i.e. about Rs. 40,000) per year per
card. Demands have increased for higher quality and level of services. Major card
issuers in India, domestic and foreign, are currently busy racking their brains in
trying to protect their organizations from frauds. To overcome this problem a new
technology i.e. “Smart-Card” that allows for greater security against fraud.
Authors feels that with the establishment of credit information bureau of India
Ltd. (C/B/L) customer had motivation to maintain good credit history and helps
in lowering of delinquency rates. Article also shows that credit card industry
grows by 37% with ten million cards in circulation.
26. NAME: Al-Alawi and Al-Amer

YEAR: (2006)
TITLE: “Young Generation Attitudes and Awareness Towards the
implementation of Smart Card in Bahrain: “An exploratory study.
The study puts a light on latest advancement and innovations in the world of
information and communication technology by the way of smart card. A smart
card resembles in size and shape to a normal credit card or bank ATM card, with
a microprocessor chip implanted into card. These cards are used not just as
identity cards, but hold a relatively huge amount of editable information
including the cardholder’s bank data, e-purse, finger print, health record, blood
group, traffic and license details and other vital information. Study presents a
general overview history, features application and introduction of smartcards in
the kingdom of Bahrain. A total of 513 questionnaires were distributed to the
students of the University of Bahrain. The questions asked included question to
check the acceptance of the people to replace their current cards with a smart card
and their awareness of the new National Smartcards in Bahrain. It also evaluates
the effects taken by the government to create awareness among the public about
the usage and features of the smart cards.
27. NAME: Worthington

YEAR: (2007)

TITLE: “The adoption and usage of credit cards by urban-affluent consumers in
China”.
The purpose of this paper was to present exploratory research into the holding
and usage of credit cards by a distinct segment of the Chinese population, who
were “early adopters” of this product. Primary data was collected for taking
sample of the urban affluent population in china to gauge preferences and
attitudes towards the use of credit cards. The sample was drawn from a narrower
base than the actual target population of urban-affluent market but an available
and valid respondent set, which offers insights into the “early adopters” of the
credit card product in china. It was found, that the respondent were comfortable
with the holding and use of credit cards particularly recognized their value for
spending on travel and entertainment. The research also identified purchase
trigger points, which indicated that the use of credit cards for purchases above
certain values is already prevalent with the sample of urban – affluent Chinese
consumers.
28. NAME: Devlin

YEAR: (2007)
TITLE: “An Analysis of main and subsidiary credit card holding and spending.”
This study seeks to examine why most multiple credit cardholders have a “main”
card (i.e. a card used more often than others) and “subsidiary” cards (i.e. cards
used less often or only in an emergency) and the spending pattern associated with
main and subsidiary cards. This study is a qualitative in nature, using a survey
which contained open-ended questions to acquire data. Response were subject to
content analysis to categories the reasons given for having a main and subsidiary
card. Results show that 85 per cent of the 141 respondents indicated that they had
a main card and the most frequently quoted reason for having such a card was the
superior discount and promotions which were offered by the card issuer. Not
surprisingly, main cards were used for the broadest range of transactions while
subsidiary cards were used for a more restricted range of transactions, a majority
saying that their subsidiary cards were held for “stand by purpose”. The results
suggests that managers who market credit cards should aim to ensure that, in all

times, the discount they offer, the promotions they arrange and their loyalty
schemes are superior to those offered by competitors. By meeting these aims,
higher numbers of consumers, who are multiple cardholders, are likely to use
their card as a main card, thereby generating more income for their credit Card
issuer.
29. NAME: Amin

YEAR: (2008)
TITLE: “Factors affecting the intentions of customers in Malaysia to use mobile
phone credit cards”
Shows that mobile phones have provided an opportunity for banking institutions
to introduce new services to the public. The latest service, which is now available
in Malaysian banking institutions, is the mobile phone credit card. The purpose of
this paper is to provide a preliminary investigation of the factors that determine
whether Malaysia’s bank customers will use the new mobile phone credit card
technology. Paper extends the applicability of the technology acceptance model
(TAM) to mobile phone credit cards and includes “Perceived credibility (PC)”,
the “amount of information about mobile phone credit cards (AIMCs)” and
“perceived expressiveness (PE)”, in addition to “Perceived usefulness (PU)” and
“Perceived ease of use (PEOU)”. The result indicate that PU, PEOU, PC and the
amount of information contained on mobile phone credit cards are important
determinants to predicting the intentions of Malaysian customers to use mobile
phone credit cards. However, PE is not an important determinant in predicting the
intentions of Malaysian customers to use mobile phone credit cards.
30. NAME: Gan

YEAR: (2008)
TITLE: “Singapore credit cardholders: ownership, usage patterns and
perceptions.”

The purpose of this study is to analyse Singapore’s diverse cardholders in search
of variations among demographic groups, credit card profiles, and their
perceptions with regard to credit card ownership and use. It then aims to discuss
possible reasons governing Singaporeans’ credit card ownership and use. In this
study, decision trees were constructed using chi-square technique to examine the
association between number of credit cards and the demographic characteristics,
perceptions and other credit card-related variables. The number of credit cards
was found to be significantly influenced by income and gender as well as
perceptions that include “credit cards leads to over spending”, “Saving as
payment source”, “unreasonable interest rates”, “credit card as status symbol.”
The number of credit cards was also affected by credit-card-related variables such
as missing payments sometimes, frequency of use, entertainment expenditures,
and patrol purchase. This research provides an in-depth understanding of
Singaporean multiple cardholders, thus it is useful in designing marketing
strategies for card-issuers as well as anti-debit strategies for policy-makers in
Singapore.
31. NAME: Al-Laham

YEAR: (2009)
TITLE: “Development of Electronic Money and its Impact on the Central Bank
Role and Monetary policy”
Asserts that, in recent years there has been considerable interest in the
development of electronic money schemes. Electronic money has the potential to
take over from cash as the primary means of making small-value payments and
could make such transactions easier and cheaper for both consumers and
merchants. Electronic money is a record of the funds or “value” available to a
consumer stored on an electronic device in her possession, either on a prepaid
card or on a personal computer for use over a computer network such as the
internet. This paper argues that electronic money, as network goods, could
become an important form of currency in the future. Such a development would
influence the effectiveness and implementation of monetary policy. Author feels
that, if an increased use of e-money substantially limits demand for central bank

reserves, it would require changes in the operational target of the central bank and
a closer coordination of monetary and fiscal policies.
32. NAME: Subhani

YEAR: (2011)
TITLE: “Study on the "plastic money / credit cards for prestige between now
and then."
The study was based on knowledge of the charisma of plastic and its impact on
the choice for the use of money. The research found that the preference for the
use of plastic money / credit card has several pros and cons although it is easy to
use and affordable. According to the consumer behavior it is stated that plastic
money is a form of motivation for a consumer to spend. The study suggests that
the preference to use plastic money to have a positive relationship with the
easiness of use because the principle of a credit card has been linked to usage
with psychological phenomena that people tend to spend less with a credit card
and spend more with the same amount of cash in hand.
33. NAME: Lowenstein and Hafalir

YEAR: (2012)
TITLE: Study on “The Impact of Credit Cards on Spending”.
The study focused on two types of customers: one who carry debts and the one
who do not carry debt. The one who carry debt are known as the Revolvers and
the one who do not carry debt are called the convenience users. The study
measured the impact of payment with credit card as compared to cash by an

insurance company employees spending on lunch in a cafeteria. It was found that
there was change in the payment medium of people from cash to a credit card
when an incentive to pay with a credit card was given. It was then found out that
credit cards do not increase spending. However, the use of credit cards has a
differential impact on spending for revolvers and convenience users. Revolvers
spend less when induced to spend with a credit card, whereas convenience users
display the opposite behaviour.
34. NAME: Anupama Sharma

YEAR: (2012)
TITLE: “Plastic card frauds and the countermeasures: towards a safer payment
mechanism”
Have thrown light on the number of frauds increased considerably in the usage
of plastic cards as in case of plastic card frauds the most affected parties are the
merchants of goods and services as they have to bear the full liability for losses
due to frauds, the banks also bears some cost especially the indirect cost whereas
the cardholders are least affected because of limited consumer liability and
concluded that all these losses can be dealt with by making the prudent use of the
new technology and taking the respective counter measures.
35. NAME: Bansi Patel and Urvi Amin

YEAR: (2012)
TITLE: “Plastic Money: Roadway towards Cash less Society”
discussed that now days in any transaction Plastic money becomes inevitable
part of the transaction and with it life becomes more easy and development would
take better place and along with the plastic money it becomes possible that
control the money laundry and effective utilization of financial system would
become possible which would also helpful for tax legislation.
36. NAME: P Manivannan

YEAR: (2013)
TITLE: "Plastic money means less payment of cash checking system”
Said that use of plastic money is the measure of a luxury credit card, and the
need. The plastic money and the electronic payments and used by people of
higher income category. The extension of this facility is not only meant for
customers in urban areas or cities, but also is for customers who live in rural
areas. However, today, with the development of banking industry, fixed income
group also begins the use of plastic and electronic money payment systems and
especially credit cards.
37. NAME: Sushma Patil

YEAR: (Jan 2014)
TITLE: “Impact of plastic money on banking trends in India”
Due to the technological revolution in financial sector, the payments in banking

system have undergone a tremendous change. The Number of innovative
products for making payment has developed after the privatization and
globalization. Customers have showed their preference over the usage of the
plastic money generally over a period of time in the banking process. Plastic
money is an alternative to the cash or the standard ‘money’. Plastic money is
referring to the credit cards or the debit cards that we use to make purchases
.Various other types of plastic cards provided by banks in India are ATM cards,
Smart cards. The current study presents an overview of the development of
banking in the plastic cards usage trends since these have been introduced in
Indian banking sector. The study also highlights the role of these cards as
electronic payment tool to be used by customers and discusses the penetration of
these cards in replacement of cash and paper money. The Study is been carried
out by taking a survey of 100 respondents by non probabilistic convenience
sampling method from a city of Mumbai by using structured questionnaire and
interview technique. The factors for adoption of plastic money in replacement of
cash and paper money have been identified which shows the preference of the
customers for plastic cards over the cash and paper money. Some future plans
made by various banks and institutions for avoiding the frauds arisen due to the

credit and debit cards are also been discussed in a way that it depicts the picture
of its future growth and prospects in India. As the study is been carried out in a
city of Mumbai the results cannot be generalized.
38. NAME: Nirmala. R. Sonu

YEAR: (2015)
TITLE: “Analysis of the use of plastic money”
Highlighted the advantage of instant transaction as one of the major factors

favouring the use of plastic money over real money by the population today. It
has already been highlighted by the study that convenience of not carrying cash
and ease of transaction is one of the major psychologically influencing factors
that encourage the use of plastic money instead of real money. Additionally, the
results of the study have also stressed upon the convenience and ease of use while
paying or shopping by plastic money. The saving of time and the fact that the
plastic money seems to be more portable also seems to further the cause of a
possible change in the scenario of money usage in the economy. On the other
hand, Security comes forward as a major cause for concern for the population
using plastic money. Therefore, it is easy to conclude that the population is ready
as ever to use plastic money at a greater level due to its high levels of ease and
convenience.

CHAPTER 3
3.1 FINDINGS
The data was collected from 150 respondents by means of Questionnaire then
analyzed. The Findings of Analysis were as follows:-
Table 3.1: Response for Plastic Cards is the most convenient way of
paying
Response Number Of Respondents
STRONGLY AGREE 25
AGREE 98
DISAGREE 24
STRONGLY DISAGREE 3
Figure 3.1: Response for Plastic Cards is the most convenient way of paying

Number Of Respondents
100
90
80
70
60
50
40
30
20
10
0
STRONGLY AGREE AGREE DISAGREE STRONGLY DISAGREE
(X axis – Response; Y axis – Number of Respondents)
The response obtained for the question “Plastic Cards is the most convenient way
of paying” has been presented in table above. From the table it is evident that 25
Respondents strongly agreed to the point, 98 respondents agreed to the point, 24
Respondents disagreed to the point while 3 respondents strongly disagreed to the
point.
When the respondents were asked if they use Plastic cards to pay utility bills like
Telephone Bill, Electricity Bill etc, the response attained was as under:-
Table 3.2: Plastic Card is the most preferred way to pay your Utility
Bills
STRONGLY AGREE 36

AGREE 80
DISAGREE 28
STRONGLY DISAGREE 06
Figure 3.2: Plastic Card is the most preferred way to pay your utilities Bills
80
70
60
50
40
30
20
10
0

The response obtained for the question “Plastic Card is the most preferred way to
pay your utilities Bills.” has been presented in table above. From the table it is
evident that 36 respondents strongly agreed to the point, 80 respondents agreed to
the point, 28 respondents disagreed to the point 6 respondents strongly disagreed
to the point.
When respondents were asked what type of card they possessed, the response
attained was as under:-
Table 3.3: what type card possessed by respondents
ATM Cum DEBIT CARD 112
CREDIT CARD 23
NONE 08
OTHER 07
Figure 3.3: what type card possessed by respondents

120
100
80
60
40
20
0
ATM Cum DEBIT CARD CREDIT CARD NONE OTHER
The response obtained for the question “what type card possessed by respondents” has
been presented in table above. From the table it is evident that 112 respondents responded
for ATM cum DEBIT Card, 23 respondents responded for credit card, 8respondents
responded for none while 7 respondents responded for other.
People normally don’t prefer to carry large amount of cash these days while travelling. It
is neither convenient nor safe. When the respondents were asked about their preference to
pay through Plastic cards while travelling, the responses were as follows:-
Table 3.4: while travelling, plastic card is the preferred way of

payment
STRONGLY AGREE 35
AGREE 76

DISAGREE 31
Figure 3.4: while travelling, plastic card is the preferred way of

payment
80
70
60
50
40
30
20
10
0
The response obtained for the question “While travelling, plastic card is the
preferred way of payment” has been presented in table above. From the table it is
the point, 31respondents disagreed to the point while 8 respondents strongly
disagreed to the point.
People have the general notion that credit cards are expensive as many charges
are levied on it like joining fee, Service Tax, Interest, Outstation Fee etc. When
the respondents were asked about their opinion, following was the picture :-

Table 3.5: credit card to be expensive as many other charges are
charged on it
YES 93
NO 57
Figure 3.5: credit cards to be expensive as many other charges are

charged on it

100
90
80
70
60
50
40
30
20
10
0
YES NO
The response obtained for the question “Do you find credit card to be expensive
as many other charges are charged on it” has been presented in table above. From
the table it is evident that 93 respondents responded for yes, 57 respondents
responded for No.
One Myth associated with Plastic cards is that they are not safe-The user’s
account can be hacked. This is not true. Plastic cards have different layers of
security as per need and cannot be easily misused. The viewpoint of respondents
on this point was as under:-
Table 3.6: Use of Plastic card is safest mode of transaction

STRONGLY AGREE 35
AGREE 76
DISAGREE 30
Figure3.6: Use of Plastic card is safest mode of transaction
80
70
60
50
40
30
20
10
0
The response obtained for the question “Use of Plastic card is safest mode of
transaction” has been presented in table above. From the table it is evident that 35
respondents strongly agreed to the point, 76 respondents agreed to the point, 30
respondents disagreed to the point while 9 respondents strongly disagreed to the
point. This finding clearly reveals the fact that the people are fully aware of the
security procedure associated with the use of Plastic Cards.

When the people were asked if they think that Plastic cards can be misused and
that’s why they don’t opt for Plastic cards, Most of the people disagreed. The
response was as under:-
Table 3.7: Misuse of Plastic Cards is the reason you don’t opt for
Plastic Money
STRONGLY AGREE 20
AGREE 66
DISAGREE 47
Figure 3.7: Misuse of Plastic Cards is the reason you don’t opt for
plastic money

70
60
50
40
30
20
10
0
The response obtained for the question “Misuse of Plastic Cards is the reason you
don’t opt for plastic money” has been presented in table above. From the table it
is evident that 20 respondents strongly agreed to the point, 66 respondents agreed
to the point, 47 respondents disagreed to the point while 17 respondents strongly
When respondents were asked, which type of security measurement they
expecting for stepping misuse of Plastic money the response attained was as
under :-
Table 3.8: which type of security measurement expecting for stepping

misuse of Plastic money

PIN 74
PASSWARD 29
BIOLOGICAL IMPRESSION 25
PHOTO CARD 22
Figure 3.8: which type of security measurement expecting for stepping

misuse of Plastic Money?
80
70
60
50
40
30
20
10
0
PIN PASSWARD BIOLOGICAL IMPRESSION PHOTO CARD
The response obtained for the question “which type of security measurement
expecting for stepping misuse of Plastic money” has been presented in table
above. From the table it is evident that 74 respondents responded for PIN, 29
respondents responded for password, 25 respondents responded for biological
impression while 22 respondents responded for photo card.

Some companies offer incentives like discount, cash back etc, when the purchase
is done through Plastic Money. When the respondents were asked their opinion
about this, following was the response obtained from them:-
Table 3.9: Plastic Card is cheaper
STRONGLY AGREE 17
AGREE 81
DISAGREE 46
Figure 3.9: Plastic Card is cheaper

90
80
70
60
50
40
30
20
10
0
The response obtained for the question “Plastic Card is cheaper” has been
presented in table above. From the table it is evident that 17 respondents strongly
agreed to the point, 81 respondents agreed to the point, 46 respondents disagreed
to the point while 6 respondents strongly disagreed to the point.
With the recent advents in Technology, Duplicate money is posing a great

problem for the common man. When the respondents were asked if Plastic money
can be a replacement of Paper Money, the following responses were obtained:-
Table 3.10: Due to Duplicity of Paper money you are shifting to

Plastic money
STRONGLY AGREE 21
AGREE 73
DISAGREE 32
Figure 3.10: Due to Duplicity of Paper money you are shifting to

Plastic money
80
70
60
50
40
30
20
10
0

The response obtained for the question “Due to Duplicity of Paper money you are
shifting to Plastic money “has been presented in table above. From the table it is
the point, 32 respondents disagreed to the point while 24 respondents strongly
disagreed to the point. It means that Plastic money was considered an alternative
to paper Money.
Looking at the recent increase in the use of Plastic money, especially after the
Demonetisation in November 2016, the chances of penetration of Plastic money
in the circulation have increased many folds. When the respondents were asked
for their opinion about the same, the following responses were obtained:-
Table 3.11: Plastic money will penetrate in society more in future
STRONGLY AGREE 41
AGREE 84
DISAGREE 18

Figure 3.11: Plastic money will penetrate in society more in future
90
80
70
60
50
40
30
20
10
0
The response obtained for the question “Plastic money will penetrate in society more in
future” has been presented in table above. From the table it is evident that 41respondents
strongly agreed to the point, 84 respondents agreed to the point, 18

point.
When our P.M Mr. Narendra Modi, came up with the idea of Demonetization,
one of the primary objective of his move was to throw black money out of the
circulation by this move. Time will tell how much this move was successful. We
tried knowing people’s opinion about this and the responses were as under:-

Table 3.12: Credit card/Debit card transaction in country over cash
transaction will Help to curb black money circulation in economy

STRONGLY AGREE 31
AGREE 88
DISAGREE 24
Figure 3.12: Credit card/Debit card transaction in country over cash

transaction will help to curb black money circulation in economy
90
80
70
60
50
40
30
20
10
0

The response obtained for the question “Credit card/Debit card transaction in
country over cash transaction will help to curb black money circulation in
economy” has been presented in table above. From the table it is evident that 31
point.
Political will goes a long way in influencing the policy matters of an economy. A
financial minister can definitely influence the use of Plastic Money in a country.
A hypothetical scenario was presented before the respondents to know about their
opinion in this regard. The following responses were obtained:-
Table 3.13: If you are financial minister of the country, will the
country see increase Use of Plastic Money
STRONGLY AGREE 65
AGREE 45
DISAGREE 30

Figure 3.13: If you are financial minister of the country, will the
country see increase use of plastic money
70
60
50
40
30
20
10
0
The response obtained for the question “If you are financial minister of the
country, will the country see increase use of plastic money” has been presented in
table above. From the table it is evident that 65 respondents strongly agreed to the
point, 45 respondents agreed to the point, 30 respondents disagreed to the point
while 10 respondents strongly disagreed to the point.

Table 3.14: More credit card/Debit card transaction in country over

cash transaction will help solve the problem of corruption in the
economy
STRONGLY AGREE 44
AGREE 70
DISAGREE 27
Figure 3.14: More credit card/Debit card transaction in country over cash
transaction will help solve the problem of corruption in economy

70
60
50
40
30
20
10
0
The response obtained for the question “More credit card/Debit card transaction
in country over cash transaction will help solve the problem of corruption in
economy” has been presented in table above. From the table it is evident that 44
point.
Initially when the Plastic cards were introduced, they were considered as a
symbol of High Socio Economic Status, but now every one of 10 persons holds
some form of Plastic card. When the respondents were asked about their opinion
pertaining to this the scenario was as under:-
Table 3.15: Plastic Card is regarded as a symbol of high Socio Economic

status

STRONGLY AGREE 20
AGREE 69
DISAGREE 47
Figure 3.15: Plastic Card is regarded as a symbol of high Socio

Economic status
70
60
50
40
30
20
10
0

The response obtained for the question “Plastic Card is regarded as a symbol of
high Socio Economic status” has been presented in table above. From the table it
is evident that 20 respondents strongly agreed to the point, 69 respondents agreed
to the point, 47 respondents disagreed to the point while 14 respondents strongly
disagreed to the point. It was thus concluded that Plastic cards are considered as a
Status Symbol.
Table 3.16 Plastic Cards lead to Over Consumption and Spending
STRONGLY AGREE 35
AGREE 76
DISAGREE 31
Figure 3.16 Plastic Cards lead to over consumption and spending

80
70
60
50
40
30
20
10
0
The response obtained for the question “Plastic Cards lead to over consumption
and spending” has been presented in table above. From the table it is evident that
13respondents strongly agreed to the point, 66 respondents agreed to the point, 60
point.
Table 3.17: Political will can stimulate the use of Plastic cards
STRONGLY AGREE 28
AGREE 78
DISAGREE 35
Figure 3.17: Political will can stimulate the use of Plastic cards

80
70
60
50
40
30
20
10
0
The response obtained for the question “Political will can stimulate the use of
Plastic cards” has been presented in table above. From the table it is evident that
28 respondents strongly agreed to the point, 78 respondents agreed to the point,
35 respondents disagreed to the point while 9 respondents strongly disagreed to
the point.
Table 3.18: Respondents Will prefer to pay by Plastic Money

(Dependent Variable)
STRONGLY AGREE 42
AGREE 66
DISAGREE 29

Figure 3.18: Respondents Will prefer to pay by plastic money (dependent
variable)
70
60
50
40
30
20
10
0
The response obtained for the question “Will prefer to pay by plastic money
(likeliness to pay by this method)” has been presented in table above. From the
table it is evident that 42 respondents strongly agreed to the point, 66 respondents
agreed to the point, 29 respondents disagreed to the point while 13 respondents
strongly disagreed to the point.
When asked about the benefits pertaining to Plastic card usage, the response
obtained was as under:
Table 3.19: The use of Plastic card is beneficial

STRONGLY AGREE 35
AGREE 81
DISAGREE 24
Figure 3.19: The use of Plastic card is beneficial

90
80
70
60
50
40
30
20
10
0
The response obtained for the question “The use of Plastic card is beneficial” has
been presented in table above. From the table it is evident that 35 respondents
strongly agreed to the point, 81 respondents agreed to the point, 24 respondents
disagreed to the point while 10 respondents strongly disagreed to the point.
The respondents were susceptible about the reliability of the Plastic money.
Generally people have the notion that the use of plastic money is not safe as the
account can get hacked. This perception clearly revealed itself in the responses of
the respondents as seen under:-
Table 3. 20: Plastic Card is considered as more reliable and secured

STRONGLY AGREE 44
AGREE 75
DISAGREE 21
Figure 3.20: Plastic Card is considered as more reliable and secured
80
70
60
50
40
30
20
10
0
The response obtained for the question “Plastic Card is considered as more
reliable and secured” has been presented in table above. From the table it is
the point, 21 respondents disagreed to the point while 10 respondents strongly
3.2 CHI - SQAUE TEST

A chi-square (χ2) statistic is a test that measures how expectations compare to actual
observed data (or model results). The data used in calculating a chi-square statistic must
be random, raw, mutually exclusive, drawn from independent variables, and drawn from a
large enough sample. For example, the results of tossing a coin 100 times meet these
criteria. Chi-square tests are often used in hypothesis testing.
The Formula for Chi-Square Is
χ2=∑ Ei (Oi −Ei)2

Ei
Where:
C=Degrees of freedom
O=Observed value(s)
E=Expected value(s)
3.2.1 HYPOTHESIS 01:
Null Hypothesis: There is no relation between the gender and the convenience of
payment made by the plastic money.
Alternate Hypothesis: There is significant relation between the gender and the
convenience of payment made by the plastic money.
Significance level (α)
Table 3.21 Table of Observed Value
Convenience Strongly Agree Disagree Strongly TOTAL

Gender agree Disagree
Male 09 53 09 01 72
Female 18 44 15 01 78
TOTAL 27 97 24 02 150
Table 3.22 Table of Expected Value

Convenience Strongly Agree Disagree Strongly
Male 12.96 46.56 11.52 0.96
Female 14.04 50.44 12.48 1.04
FORMULA:
(Observed value – Expected Value)2
Expected Value
Table 3.23 Calculation of χ2
Observed Expected (O –E) (O –E)2 (O –E)2

Value (O) Value (E) E
09 12.96 -3.96 15.681 1.21
53 46.56 6.44 41.473 0.89
09 11.52 -2.52 6.350 0.55
01 0.96 0.04 0.001 0.002
18 14.04 3.96 15.681 1.116
44 50.44 -6.44 41.473 0.822
15 12.48 2.52 6.350 0.508
01 1.04 -0.04 0.001 0.002
∑ χ2=5.16
Degree of Freedom = (Column -1) (Row – 1)
Degree of Freedom = (4 – 1) (2 – 1)

Degree of Freedom = 3*1
Degree of Freedom = 3
Significance level (α) = 0.05
χ2tabular = 7.81
χ2calculated = 5.16
χ2 calculated < χ2 tabular
INTERPRETATION:
Since the calculated value (5.16) is less than the 5% level of significance (7.81), we
cannot accept the alternate hypothesis. Thus, we conclude that there is no relationship
between the gender and the convenience of payment made by the plastic money.
Null Hypothesis: There is no relation between the gender and the type of money used for
their daily purchases.
Alternate Hypothesis: There is significant relation between the gender and the type of
money used for their daily purchases.

Types of money Plastic Paper money TOTAL

Gender money
Male 56 16 72
Female 60 18 78
TOTAL 116 34 150
Types of money Plastic money Paper money

Gender
Male 55.68 16.32
Female 60.32 17.68
FORMULA:
Expected Value


56 55.68 0.32 0.1026 0.0018
16 16.32 -0.32 0.1024 0.0062
60 60.32 -0.32 0.1024 0.0016
18 17.68 0.32 0.1024 0.0057
∑ χ2=0.015
χ2tabular = 3.84
INTERPRETATION:

Since the calculated value (0.015) is less than the 5% level of significance (3.84), we
cannot accept the alternate hypothesis. Thus, we conclude that there is no relationship
between the gender and the type of money used for their daily purchases.
Null Hypothesis: There is no relation between the gender and the fear about the misuse of
the plastic money.
Alternate Hypothesis: There is significant relation between the gender and the fear about
the misuse of the plastic money.
Fear of misuse Strongly Agree Disagree Strongly TOTAL

Male 12 33 22 07 74
Female 10 31 24 11 76
TOTAL 22 64 46 18 150

Fear of misuse Stron Agree Disagree Strongly
Gender gly Disagree
agree
Male 10.85 31.57 22.69 8.88
Female 11.14 32.42 23.30 9.12
FORMULA:
Expected Value

12 10.85 1.15 1.3225 0.1218
33 31.57 1.43 2.0449 0.0647
22 22.69 -0.69 0.4716 0.0209
07 8.88 -1.88 3.5344 0.3980
10 11.14 -1.14 1.2996 0.1166
31 32.42 -1.42 2.0164 0.0622
24 23.30 0.70 0.49 0.0210
11 9.12 1.88 3.5344 0.3875
∑ χ2=1.1927

χ2tabular = 7.81
INTERPRETATION:
Since the calculated value (1.19) is less than the 5% level of significance (7.81 ), we cannot
accept the alternate hypothesis. Thus, we conclude that there is no relationship between
the gender and the fear about the misuse of the plastic money.
3.2.4 HYPOTHESIS O4
Null Hypothesis: There is no relation between the gender and the types of card used by
the people.
Alternate Hypothesis: There is significant relation between the gender and the types of
card used by the people.
Types of card ATM DEBIT CREDIT NONE OTHER TOTAL

Gender Card Card Card
Male 29 28 08 06 02 73
Female 38 24 07 02 06 77
TOTAL 67 52 15 08 08 150

Types of card ATM DEBIT CREDIT NONE OTHER

Gender Card Card Card
Male 32.60 25.30 7.3 3.89 3.89
Female 34.39 26.69 7.7 4.10 4.10
FORMULA:
Expected Value


29 32.60 -3.6 12.96 0.397
28 25.30 2.7 7.29 0.288
08 7.3 0.7 0.49 0.067
06 3.89 2.11 4.45 1.144
02 3.89 -1.89 3.57 0.918
38 34.39 3.61 13.03 0.378
24 26.69 -2.69 7.23 0.271
07 7.7 -0.7 0.49 0.063
02 4.10 -2.1 4.41 0.075
06 4.10 1.9 3.61 0.880

∑ χ2=5.481
χ2tabular = 9.49
INTERPRETATION:
Since the calculated value (5.48) is less than the 5% level of significance (9.49 ), we cannot
accept the alternate hypothesis. Thus, we conclude that there is no relationship between
the gender and the types of card used by the people.

CHAPTER 3
3.1 SUMMARY OF FINDINGS

Money is regarded as a medium of exchange and payment tool. Initially barter system
was used as the significant mode of payment. Over the years, money has changed its form
from coins to paper cash and today it is available in formless form as electronic money or
plastic card. The major change in banks which has been brought in by the technology is
through introduction of products which are alternative to cash or paper money. Plastic
cards are one of those types of innovations through which the customers can make use of
banking services just by owning the card issued by bank and that too without restricting
himself in the official banking hours.
With hundreds of millions of credit cards in circulation today, these Plastic cards have
become a way of life. India alone is home to millions of them. Initially positioned as a
status symbol these plastic cards have caught on in a big way amongst the educated
population of the country.

Extending credit to their customers has always been an extremely common practice
.However in the early 1940s, when individual retail merchants in America found it more
and more difficult to afford credit to these patrons, financial institutions came into the
picture.
From 1940 till 2010, the market has virtually grown to over 4 million cards with over 25-
30% of compounded annual growth in new cardholder’s base.
Spending pattern through plastic money has changed drastically. Travelling, dining and
Jewellery are some the top purchases that Indians make through credit cards. Few 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. This growing trend will soon rise up to the
point where the plastic money will completely replace the need for carrying cash.
In a country where a decade back people had hardly heard the word plastic money or
credit card it has been estimated that there are likely to be around half million potential
card users in the near future. This forecasting derives credibility from the fact that more
and more local and international financial institutions are exhibiting enthusiasm in this
direction. This in turn reflects prospects in Indian market in accommodating numerous
credit card competitors operating on the circuit, ensuring healthy and competitive card
business deals.
The recent growth in the use of plastic money mainly credit and debit cards has been
phenomenal. After the Demonetization in November 2016 by the Prime Minister Mr
Narendra Modi and his emphasis on Cashless Transaction, Initially positioned as a status
symbol, these plastic cards have caught on in a big way amongst the educated population
of the country.
The plastic money in the form of cards was introduced by banks in India in 1990's. But it
was not very popular among Indian consumer at the time of its introduction. The change
in demographic features of consumers in terms of their income, marital status, education
level etc. and up gradation of technology and its awareness has brought the relevant
changes in consumers' preferences. These changing preferences have also modified their
outlook and decision regarding the acceptance and non- acceptance of particular product
and services in the market. Thus, the plastic cards are gaining popularity among bankers
as well as customers and getting accepted in the market place.RBI is also taking
important steps in order to enhance its usage and popularity through initiatives like

regulating card market to maintain the security levels and to build up confidence of
bankers and customers.
The plastic money can be in the form of Credit cards or Debit cards. Debit and credit
cards offer more than a way to access money without having to carry around cash or a
bulky cheque book. Debit cards are like digitized versions of cheque books; they are
linked to your bank account (usually a checking account), and money is debited
(withdrawn) from the account as soon as the transaction occurs. Credit cards are
different; they offer a line of credit (i.e., a loan) that is interest-free if the monthly credit
card bill is paid on time. Instead of being connected to a personal bank account, a credit
card is connected to the bank or financial institution that issued the card. So when you use
a credit card, the issuer pays the merchant and you go into debt to the card issuer. Most
debit cards are free with a checking account at a bank or credit union. They can also be
used to conveniently withdraw cash from ATMs. Credit cards have the advantage of
rewards programs but such cards often require an annual fee to use. Financial
responsibility is a big factor in credit card use; it is easy to overspend and then get buried
in overwhelming credit card debt at a very high interest rates.
It’s not that only the card numbers have increased, but even the types of cards on offer
have seen a surge. Today the domestic card industry is flooded with different types of
cards ranging from gold, silver, global, co-branded credit cards, smart to secure ….the list
is endless. Foreign banks have shouldered the major responsibility of increasing the card
base and adding value-added services to the card products in the past. The scenario has
changed dramatically in the last of couple of years with the entry of State Bank of India
(SBI), a domestic major in the banking sector. More and more nationalized banks and
private sector banks like ICICI and HDFC Bank are aggressively launching credit card
with value added features.
Indian consumers are also using the plastic money for everyday spends such as petrol,
hospitals, telephone services and home furnishing. Consumers in India are also using
credit cards more and more to pay school dues for their kids. However, India is at a low
11 per cent in comparison to other countries in the Asia-Pacific region when it comes to
using plastic money for recurring bills such as utilities, subscriptions and insurance.
FINDINGS
The major finding of the study was presented below:

1. Majority of the respondents (52 percent) are female and 48 percent of the
respondents are male.
2. Majority of the respondents (99 percent) belong to the group of (19-29) age
groups.
3. 87 percent of the respondents are unmarried.
4. Majority of the respondents (64 percent) are middle class.
5. 24 percent of the respondents are upper middle class.
6. 80 percent of the respondents are students.
7. 12 percent of the respondents are employed for wages.
8. Majority of the respondents are (82 percent) agreed that the plastic card is the
most convenient way of paying.
9. 68 percent of the respondents are preferred plastic card for pay their utility bills.
10. Majority of the respondents are (44 percent) possessed by ATM Card.
11. 35 percent of the respondents are possessed by debit card.
12. 64 percent of the respondents are preferred plastic card for payment while
travelling.
13. Majority of the respondents are (63 percent) find credit card to be expensive as
many other charges are charged on it.
14. 71 percent of the respondents are agreed that Plastic card is the safest mode of
transaction.
15. 57 percent of the respondents don’t opt for the plastic money because of the fear
about misuse of Plastic Cards.
16. Majority of the respondents are (45 percent) expecting PIN As a security
measurement for stepping misuse of Plastic money.
17. 24 percent of the respondents are expecting password as a security measurement
for stepping misuse of Plastic money.
18. Majority of the respondents are (65 percent) are agreed that Plastic card is
cheaper.
19. 64 percent of the respondents are shifting to the paper money due to the Duplicity
of the plastic money.
20. Majority of the respondents are (84 percent) agreed that Plastic money will
penetrate in society more in future.

21. 79 percent of the respondents are agreed that credit card / Debit card transaction in
country over cash transaction will help to curb black money circulation in
economy.
22. 73 percent of the respondents are agreed that if they are financial minister of the
country, the country see increase in the use of the plastic money.
23. Majority of the respondents are (76 percent) agreed that more credit card /Debit
card transaction in country over cash transaction will help to solve the problem of
corruption in the economy.
24. 61 percent of the respondents are believes that the plastic card regarded as a
symbol of high Socio Economic status.
25. 39 percent of the respondents are disagreed to the point of plastic card regarded as
a symbol of high Socio Economic.
26. 56 percent of the respondents are agreed that Plastic card leads to over
consumption.
27. Majority of the respondents are (70 percent) agreed that political will stimulate the
use of Plastic cards.
28. 61 percent of the respondents prefer plastic money to pay in their daily
transactions.
29. Majority of the respondents are (76 percent) agreed that the use of Plastic Money
is beneficial.
30. 78 percent of the respondents are considered plastic money as more reliable and
secured.
31. Chi square is a statistical test commonly used to compare observed data, with data
we would expect to obtain according to a specific hypothesis.
32. The data used in calculating a chi square statistic.is to be Random, raw mutually
exclusive, draw from a large enough sample.
33. Chi square is test of independence is used to determine if there is a. significant
relationship between two nominal variables.
34. The frequency of one nominal variable is compared with different values of the
second nominal variable.
35. Chi square test of independence can only compare categorical variables.
36. The null hypothesis (H0) and alternative hypothesis (H1) of the chi square test of
independence can be expressed in two different but equivalent ways.
37. H0: “variable X “is independent of” variable Y “.

H1: “variable X “is not independent of “variable Y “.
CHAPTER 4
4.1 CONCLUSION AND SUGGESTION
Looking at the broad scenario, there is no doubt that the plastic money is rising up in the
market. The day will come when all the transaction will be done through plastic money,
yet there are further technologies which have been implemented in Japan and US but
India is still growing in its first phase. The day will come when all the train tickets would
be purchased by credit cards. People will start keeping bunch of cards in their pockets
instead of currencies. The day will come when the cinema tickets will be purchased
through credit cards. Thus in these growing phenomenon there doesn’t seems any
declination instead it growing at a higher rate. Consumers prefer these cards mostly for
shopping online E-commerce has given a better way to use the plastic money. It can be

concluded that plastic money has a very bright future in the coming years because of the
increasing trend of ecommerce.
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 to educate
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’.
It was necessary to reconcile, in the most fundamental sense, the nature of bank, money,
and credit card; even beyond that to the essential elements of each and how they might
change in a microelectronic environment. Conclusions emerge: First money had become
nothing but guaranteed, alphanumeric data recorded in valueless paper and metal. It
would eventually become guaranteed data in the form of arranged electronics and photons
which would move around the world at the speed of light. ATM/ ATM cum Debit card is
the most popular plastic money. And there is a positive relationship between the
education level and usage of the plastic money. The study also shows that only a certain
percentage of the credit card holders are unsatisfied from the services rendered by the
card issuers. Majority of the respondents’ family members are using any one of the plastic
money. To sum up, increasing acceptance of plastic money has become a source of
income to banks and facilitates the public transactions. The currency management is
made easier and cost lower. It economies the use of currency and increases the bank
credit and money with the public. The banks and the public both stand to gain by usage of
plastic money. As such, plastic money is fast catching the imagination of the people, in
particular, the younger generation in a big way.
4.2 SUGGESTION

1. In India the rate of interest charged to credit cards is between rate 10 percentage to
20 percentage, in foreign countries it is only 3 percentage so by reducing the
interest rate of credit cards, can get more users of credit card. Proper care must be
given while using credit cards because it might higher debt responsibilities to the
user. Proper using of the card will provide many enjoyable facilities to the users
and even user can purchase the goods without paying any money through reward
points.
2. Banks need to focus more on activation of plastic money, since it is a critical step
towards usage. Banks may take out bound calls to encourage activation and
enhanced usage of money.
3. Before providing a card, customer must be made aware of the proper usage of the
plastic money.
4. Proper implementation of machine must be done otherwise it is a bane as banks
may be caught in fraud traps.
5. Every individual becomes an account holder as part of the financial inclusion, if
the providing of plastic money also gives equal priority by the banks, the
monetary transactions can be made simpler through banks.
BIBLIOGRAPHY:
https://www.navingirlscollege.com
shodhganga.inflibnet.ac.in
www.researchgate.net
www.scribd.com
www.academia.edu
www.groupdiscussionideas.com
ajmjournals.com
www.allprojectreports.com
brainly.in
seminarprojecttopics.com
m.economictimes.com
www.coursehero.com
www.indiastudychannel.com
cashcofinancial.com

An Analysis On Uses of Plastic Money in Kodagu

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An Analysis On Uses of Plastic Money in Kodagu

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“An analysis on uses of plastic money in Kodagu”

Plastic cards, or what is described as plastic money, happen to be the best-known

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1.3 NEW AVENUES FOR PLASTIC CURRENCY

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1.4 PLASTIC MONEY: SIGN OF MODERNIZING ECONOMY

Money is always regarded as an important medium of exchange and payment tool.

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1.5 PLASTIC CARDS: A KEY ELEMENT OF ELECTRONIC

Managing an account Money is continually seen as a basic trade of exchange and

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1.6 RESERVE BANK OF INDIA PITCHES FOR CASHLESS

1.7 ABOUT CREDIT CARDS & DEBIT CARDS

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Table 1.1 Difference between credit card and debit card

BASIS CREDIT CARD DEBIT CARD

Connected To Not required to be Checking or Savings

Monthly Bills Yes No

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Spending Limit The credit limit set by However much is in the

Interest Charged If a credit card bill is not No interest is charged

Security Credit cards in the U.S. A PIN makes them

Fraud Liability Low. Rarely held liable High. If someone steals

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Credit History Responsible credit card Does not affect credit

Overdraw Fees Low. Some credit card High "overdraft" fees.

1.8 VARIOUS FORMS OF PLASTIC MONEY

1.8.1 CREDIT CARD

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1.8.2 DEBIT CARD

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1.8.3 CHARGE CARD

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1.8.4 SMART CARD

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1.8.5 PHOTO CARD

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1.8.6 GLOBAL CARD

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You can use it for shopping as well as various other transactions

1.8.7 CO-BRANDED CARD

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1.8.8 AFFINITY CARD

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1.10 MERITS OF PLASTIC MONEY:

 Credit cards provide a credit facility: With the advent of credit cards an

 International acceptability: Owning an international debit or credit card

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1.11 DEMERITS OF PLASTIC MONEY:

 Impulsive purchases: Having the ease to make payments makes a person unable

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1.12 ISSUES THAT CAN BE FACED WITH PLASTIC CARDS

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1.12.1 STAY AWARE

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1.13 OBJECTIVES OF THE STUDY

 To know the problems faced by respondents using plastic money.

1.14 SCOPE OF THE STUDY