A PROJECT REPORT ON PLASTIC MONEY

A PROJECT REPORT SUBMITTED TO

THE UNIVERSITY OF MUMBAI FOR PARTIAL FULFILMENT
FOR THE AWARD OF THE DEGREE OF
BACHELOR OF COMMERCE
BANKING & INSURANCE

BY
VISMAYA BABAURAJ BILSHA
01

UNDER THE GUIDANCE OF

ASST. PROF. PRIYANKA GOSWAMI

KERALEEYA SAMAJAM(REGD) DOMBIVLI'S

MODEL COLLEGE
KHAMBHALPADA, THAKURLI(EAST)

UNIVERSITY OF MUMBAI
MARCH 2022

I
 TABLE OF CONTENTS

SERIAL DESCRIPTION PAGE

NO NO
1. CERTIFICATE I

2. DECLARATION II

3. ACKNOWLEDGEMENT III

4. CHAPTER 1
INTRODUCTION
5. CHAPTER 2
RESEARCH METHODOLOGY
6. CHAPTER 3
LITERATURE REVIEW
7. CHAPTER 4
DATA ANALYSIS &
INTERPRETATION
8.

9.

10.

11.
 DECLARATION

I, THE UNDERSIGNED MS. VISMAYA BABURAJ BILSHA. HERE BY,

DECLARE THAT THE WORK EMBODIED IN THIS PROJECT TITLE “A
PROJECT REPORT ON PLASTIC MONEY”, FORMS MY OWN
CONTRIBUTION TO THE RESEARCH CARRIED OUT UNDER THE
GUIDANCE OF ASST.PROF. PRIYANKA GOSWAMI IS A RESULT PF MY
OWN RESEARCH WORK AND HAS BEEN PERVIOUSLY SUBMITTED TO
ANY OTHER UNIVERSITY FOR ANY DEGREE/DIPLOMA TO THIS OR ANY
OTHER UNIVERSITY.

I, HERE BY FURTHER DECLARE THAT ALL THE INFORMATION OF THIS

DOCUMENTS HAS BEEN OBTAINED AND PRESENTED IN ACCORDANCE
WITH ACADEMIC RULES AND ETHICAL CONDUCT.

VISMAYA BABURAJ
BACHELOR OF COMMERCE
BANKING & INSURANCE

CERTIFIED BY:-
ASST. PROF. PRIYANKA GOSWAMI
 II
ACKNOWLEDGEMENT

I WOULD LIKE TO ACKNOWLEDGE THE FOLLOWING AS BEING

IDEALISTIC CHANNELS AND FRESH DIMENSIONS IN THE COMPLETION
OF THIS PROJECT.

I TAKE THIS OPPORTUNITY TO THANK THE UNIVERSITY OF MUMBAI

FOR GIVING ME THE CHANCE TO DO THIS PROJECT.

I WOULD LIKE TO THANK MY PRINCIPAL, DR. VINAY BHOLE FOR

PROVIDING THE NECESSARY FACILITIES REQUIRED FOR THE
COMPLETION OF THIS PROJECT.

I TAKE THIS OPPORTUNITY TO THANK OUR COORDINATOR ASST.

PROF. GEETA NAIR FOR HER MORAL SUPPORT AND GUIDANCE.

I WOULD ALSO LIKE TO EXPRESS MY SINCERE GRATITUDE TOWARDS

MY PROJECT GUIDE ASST. PROF. PRIYANKA GOSWAMI WHOSE
GUIDANCE AND CARE MADE THE PROJECT SUCCESSFUL.

I WOULD LIKE TO THANK MY COLLEGE LIBRARY FOR HAVING

PROVIDED VARIOUS REFERENCE BOOKS AND MAGAZINES RELATED
TO MY PROJECT.

LASTLY, I WOULD LIKE TO THANK EACH AND EVERY PERSON WHO

DIRECTLY OR INDIRECTLY HELPED ME IN THE COMPLETION OF THE
PROJECT.

VISMAYA BABURAJ
 III
CHAPTER 1:- INTRODUCTION
Plastic money refers to the hard plastic cards we use every day in place of actual
bank notes. For example ATM cards like credit card and debit card are electronic
generated card that acts as plastic money at the time of buying of goods and services.
Debit card is used to withdraw money from your bank account at the time of payment
for something and credit card is used to generate credit in the name of your bank
account for the purpose of electronic payment.

Plastic money aka polymer money is made out of plastic and has formed an
important part of our daily life these days. It is easier to deal with cards than cash.
Yes, the advantages of plastic money over cash has made it a best friend of many. It
was in the 1950s the concept of plastic money came into being. When we say plastic
money, it includes debit cards, ATM cards, credit cards, prepaid cards, smart cards
and so on. The main advantage of plastic money is that it avoids the necessity to
carry huge cash and is also difficult to mutilate. The disadvantage being there are
still many among us who do not know how to use a plastic card wisely.

° What is in your wallet right now?

You probably carry some cash and a hoard of cards! From insurance cards, business
cards to visa cards, our wallets play house to a plethora of cards.

The most common in that stash is the payment cards or simply, plastic cash.
Most people love the convenience and security of plastic money. You can carry your
entire bank account in your pocket! That could have been awkward if it was in cash.

Since they make our transactions smooth and more convenient, a better
understanding of some of the various payment cards is in order.

° What is a payment card (plastic money)?

These are cards issued by banks or other financial institutions to their customer to
use as a means of transaction. The card owner can access their funds in the bank or
credit account and withdraw from an Automated Teller machine, or use it for
electronic cash transfers for payment of goods and services. Payment cards are also
known as plastic money.

➢ FEATURES OF PLASTIC MONEY:-

▪ Security:-
The most important reason behind the launch of plastic currency note is that it is
to prevent counterfeiting i.e. fake currency. Paper notes are easier to imitate and
when in wrong hands leads to negative impact on economy. In addition to this, fake
paper notes are majorly printed and are in use for funding terrorism, which has since
ages affecting India’s internal security. So basically it would help India’s economy
in the long run.

In comparison, polymer notes have security features which is not possible in paper
notes. These features can be detected by individuals, machines, and authority which
issues the notes. Reproducing polymer notes through photocopy or scanning is very
difficult.

▪ Long life:-
Plastic currency notes have longer life typically 5 years. In comparison paper notes
may or may not have longer life unless and until they are preserved or kept unused.
You can take example of visiting card made of plastic and paper. Plastic ones are
difficult to tear and have longer life as dirt can be easily removed. You might have
come across a situation when shopkeeper rejects to accept a torn paper currency note.
This will end once plastic money comes to use.

°Plastic money aka polymer money is made out of plastic and has formed an
important part of our daily life these days. It is easier to deal with cards than cash.
Yes, the advantages of plastic money over cash has made it a best friend of many. It
was in the 1950s the concept of plastic money came into being. When we say plastic
money, it includes debit cards, ATM cards, credit cards, prepaid cards, smart cards
and so on. The main advantage of plastic money is that it avoids the necessity to
carry huge cash and is also difficult to mutilate. The disadvantage being there are
still many among us who do not know how to use a plastic card wisely. This articles
deals in general about the main merits and demerits of polymer money.

➢ ADVANTAGES OF PLASTIC MONEY:-

• Crime rates will decrease

• Provides credit facility
• Tracking transactions becomes easy
• Cards fit into the wallet easily
• 0% Installment options
• Convenience of making payments from home
• Is internationally acceptable

➢ DISADVANTAGES OF PLASTIC MONEY:-

• Just plastic money won’t help always

• Plastic Money is also not 100% safe
• Minimum purchase requirements
• Service charge in certain cases
 • Card too can get damaged
• Interest, for non payment

➢ TYPES OF PLASTIC MONEY:-

The most common types of plastic money are debit cards, credit cards, ATM cards,
and charge cards.

1. DEBIT CARDS:-
This payment card deducts funds directly from a consumer’s bank deposit
account to either pay for goods and services electronically or withdraws from an
ATM. Debit cards are also referred to as bankcards or check cards. There are various
types of debit cards used in different countries but the most common including:

• Visa debit card:-

This is one of the most globally accepted debit cards, with an international presence
of around 200+ countries. As long as the card has the visa logo, you can use it to
shop, travel, and pay your utility bills directly from your bank account while you are
thousands of miles away across the globe.

• MasterCard debit card:-

A MasterCard is essentially used across the world and offers 24-hour services of
banking transactions in ATMs and online for booking tickets, traveling, and
shopping.

• Maestro Debit card:-

It is a type of debit card brand issued by MasterCard and used mainly in India and
fewer other countries. You can also use this debit card for online transactions.

• EMV cards:-
EMV is an abbreviation of Euro pay, MasterCard, and Visa. These cards have
excellent security features as they use smart chip-based technology. All banks are
replacing ordinary debit cards with EMV chips since they are impossible for
imposers to copy data and replicate it.

➢ FEATURES OF DEBIT CARDS:-

• Linked bank account

• ATM access
• Pay Pass, pay Wave and other contactless payments
• Overdrafts
• Chargeback
• Rewards options
• Security Features
• Debit card fees
• Surcharges
• Account fees
• Overdraft fee

➢ ADVANTAGES OF DEBIT CARDS:-

• Easily accepted everywhere

• Security
• Prepaid Service
• Convenience is one of the common Advantages of Debit Cards
• Prevent debt
• No annual fees
• Good for smaller purchase
• Easy to get

➢ DISADVANTAGES OF DEBIT CARDS:-

• Have limited funds

 • Have overdraft fees
• Complicated for big-ticket items
• Require a PIN
• Raising a complaint is a lengthy process
• Unprotected against Frauds
• Doesn’t improve your credit score
• Withdrawal Fees

2. CREDIT CARDS:-
A credit card allows you to make transactions on loan. The bank, or credit
issuer, advances money to be paid to the merchants and you pay back later when you
reach your credit limit. With this card, you can spend and then repay later. There are
many types of credit cards, which are majorly divided into two groups: Secured
credit cards and unsecured credit cards.

Secured credit cards are issued upon paying a down payment as a security.
Essentially, it is like borrowing your own money. These types of credit cards are
mostly issued to people without a credit rating, or if you do not want to have an
overdraft.

Unsecured credit cards: The financial institution issues one without having to
provide security or collateral for the credit loan. You use the credit card for your
various transactions and pay upon reaching the credit limit. Your credit score
determines the amount the card provider will let you spend before reaching your
limit and trusting that you can pay back. Credit cards also improve your credit
score if you pay on time and financial institutions can gauge if you pay your
credits and if you do so in time.

➢ TYPES OF CREDIT CARDS:-

• Rewards credit cards:-

Rewards credit cards typically give you points or cash back based on a
percentage of your spending and some even offer bonus points in popular categories
like groceries, gas and dining out. Rewards credit cards also tend to offer at least a
few different ways to redeem your points, often including options for statement
credits, gift cards or merchandise. This makes them a great credit card option for
everyday expenses when you know you can pay off your card right away.

❖ Here are some of our favorite rewards credit cards:

• Chase Freedom Unlimited – Best for your first rewards credit card.
• Citi Premier Card – Best for travel rewards on everyday purchases.
• Capital One Venture One Rewards Credit Card – Best for travel rewards with no
annual fee.

• Cash back credit cards:-

Cash back credit cards make it easy for you to earn cash back or statement
credits on your spending, although how rewards are doled out varies from card
to card. Some options in this niche offer a flat rate of rewards while others offer
bonus points in certain categories like dining or travel. Some even offer bonus
rewards in categories that change each quarter, as well as a flat rate of rewards
on all non-bonus purchases.

❖ Here are some of our favorite cash back cards:

• Citi Double Cash Card – Best for flat rate cash back
• Discover it Cash Back – Best for rotating cash back categories
• Blue Cash Preferred Card from American Express – Best for cash back on
groceries
• Capital One Savor One Cash Rewards Credit Card – Best for cash back on
dining.

• Travel credit cards:-

Travel credit cards offer you the opportunity to earn rewards that are geared
specifically toward travel, whether that means earning flexible travel credits
you can use toward any travel purchase or even points you can transfer to
airline or hotel programs. Some travel credit cards also let you earn points
within a specific program, such as a frequent flyer program or hotel loyalty
program.
 ❖ Here are some of our favorite travel credit cards:

• Capital One Venture Rewards Credit Card – Best for flexible travel rewards
• Chase Sapphire Preferred Card – Best beginner travel card
• American Express Gold Card – Best for travel rewards on dining
• Discover it Miles – Best for first-year miles bonus

• Business credit cards:-

Business credit cards allow cardholders to keep their personal and business
expenses separate while they earn rewards on all their business spending.
Interestingly enough, business credit cards can also be cash back credit cards,
general rewards credit cards, travel credit cards or even secured credit cards. You do
need to have a business or income-producing activity to qualify for a business credit
card.

❖ Here are some of our favorite business credit cards:

• The Blue Business Plus Credit Card from American Express – Best for everyday
business expenses
• Ink Business Unlimited Credit Card – Best for unlimited cash back
• American Express Blue Business Cash Card – Best business card for startups
• Student credit cards:-
Student credit cards are “starter credit cards” of sorts specifically geared
to young people with a limited credit history. In other words, application
requirements aren’t as stringent, so it’s easier to get approved. Most student credit
cards don’t charge an annual fee and many offer bonus perks for good grades as
well as rewards for each dollar you spend. If used responsibly, signing up for a
student credit card can help young people build their credit and start creating
good financial habits.

❖ Here are some of our favorite student credit cards:

• Deserve® EDU MasterCard for Students – Best student card for no credit
history
• Discover it Student Cash Back – Best student card for cash back
• Petal 2 “Cash Back, No Fees” Visa Credit Card – Best student starter card
• Discover it Student chrome – Best student card with rewards at restaurants

➢ FEATURES OF CREDIT CARDS:-

• Annual Percentage Rate(APR)

• Grace Period
• Rewards and Perks
• Credit Card Fees
• Balance
• Credit Limit

➢ ADVANTAGES OF CREDIT CARDS:-

• Building credit history.

• A quick source of funds in an “absolute” emergency
• No accrued interest if bill is paid on time and in full each month
• Zero liability as consumers is not responsible for fraudulent charges when
reported promptly.
• Consumer protection ($50.00) if fraudulent charges are reported promptly in
case the card is stolen or lost.

➢ DISADVANTAGES OF CREDIT CARDS:-

• Established credit-worthiness needed before getting a credit card

• Encouraging impulsive and unnecessary “wanted” purchases
• High-interest rates if not paid in full by the due date
• Annual fees for some credit cards – can become expensive over the years
• Fee charged for late payments
• Negative effect on credit history and credit score in case of improper usage

3. CHARGE CARDS:-
 A charge card is a payment card that offers huge credit limits to the
cardholders. Businesses or wealthy people with huge transactions mostly use them.
Payment accrued is paid at the end of the month and no interest is charged. However,
non-payment or delayed payment usually attracts huge fines.

➢ TYPES OF CHARGE CARDS:-

• Deposits
• Withdrawals
• Transfers

➢ ADVANTAGES OF CHARGE CARDS:-

• Because they have to be paid in full each month, charge cards can help avoid
a credit card debt spiral.
• • Charge cards have no preset spending cap, which may allow cardholders
to make large purchases without having to worry about “maxing out” the
card.
• • Charge cards don’t require paying interest (though high fees can be
assessed for late payments).
• • Charge cards often offer generous rewards and benefits, such as purchase
points, statement credits, and sometimes double or triple points on dining
and travel (which can make them a good option for business travelers).

➢ DISADVANTAGES OF CHARGE CARDS:-

• Many charge cards carry high annual fees, while many fee-free credit and
debit cards are available.
• • Charge cards are offered by a limited number of issuers, so there are
typically far fewer to choose from than credit cards.
 • • As with credit cards, late payments can ding your credit history. With
charge cards, however, consistently late payments can be more detrimental
to your credit than late credit card payments.
• • You have to pay the whole balance to avoid a late fee (with a credit card,
you can typically pay the minimum payment to avoid the late fee).

4. ATM CARDS:-
An ATM card is a type of payment card issued by a bank or other financial
institution used to withdraw funds, majorly from an automated teller machine.
Unlike the debit card, which can be used for several transactions like in major stores
and online transactions, an ATM card is only used to withdraw from an ATM.

➢ TYPES OF ATM CARDS:-

• Visa debit cards

• MasterCard debit cards
• Contactless debit cards
• RuPay debit cards
• Maestro Debit Card

➢ ADVANTAGES OF ATM CARDS:-

• Anyone Can Have Bank Card

• Account balance inquiry
• Quick Cash Withdrawal
• Deposit cash / cheques
• Request for new cheques book
• Transfer funds between accounts within the same Bank
• Details of recent transactions
• Pay your Utility bills
• Make other payments too

➢ DISADVANTAGES OF ATM CARDS:-

• Fraud
 • Theft Risk
• Fees
• Card Retention
• PIN Recollection
• Spending Discipline
• Fees Can Break You
• Security and Safety

5. PREPAID CARDS:-
Retail and departmental stores are the main issuers of prepaid cards. Cash is
loaded on the card and the cardholder can shop in the store without having to carry
cash. Upon depletion of the funds, cash can be reloaded for future use if the customer
is interested.

The convenience of payment cards helps with our day-to-day transactions and
eliminates the need of having to carry unnecessary huge amounts of cash. This
enhances security. In addition, you can set the maximum limits on your cards and
budget how you spend on shopping and travel among other financial wants.

➢ TYPES OF PREPAID CARDS:-

• General-Purpose Reloadable Prepaid Cards

• Retail Prepaid Cards
• Prepaid Gift Cards
• Prepaid Travel Cards
• Prepaid Cashback Cards
• Payroll Cards

➢ FEATURES OF PREPAID CARDS:-

• No need to carry cash

• You can stay within your budget
• You can withdraw cash too
• You can use them almost anything
 ➢ ADVANTAGES OF PREPAID CARDS:-

• Prepaid cards can be topped up via ATMs, the web, text messages or phone,
making them a potentially attractive option for those on the move who don’t
want to carry large sums of cash or risk the prospect of losing their debit or
credit card.
• Prepaid cards are issued via the Visa and MasterCard networks, meaning they
are commonly accepted nationally and abroad. Carrying a prepaid card
overseas is safer than carrying cash, and the money held on it is replaced if
the card is lost or stolen.

➢ DISADVANTAGES OF PREPAID CARDS:-

• There are several charges associated with prepaid cards. According to

research issued by Which?, of the roughly 35 prepaid cards currently available
to consumers, almost every one charges users at least one of the following.

➢ Unified Payments Interface(UPI):-

Unified Payments Interface (UPI) is a system that powers multiple
bank accounts into a single mobile application (of any participating bank), merging
several banking features, seamless fund routing & merchant payments into one hood.
It also caters to the “Peer to Peer” collect request which can be scheduled and paid
as per requirement and convenience. UPI is a digital payment system through which
a user can both send and receive money through a Virtual Payment Address (VPA).
The money will be directly debited from the customer’s bank account.

➢ Apps with UPI Feature:-

• PhonePe
• Paytm
• BHIM app
 • MobiKwik
• Google Tez
• Uber
• Chillr
• Paytm Payments Bank
• SBI Pay
• iMobile
• Axis Pay
• BOB UPI

▪ PHONEPE:-
This is one of the most popular payment apps that allows users to
transact using the UPI interface. This is considered to be one among the most
preferred apps for UPI. The app was founded in 2015 and is powered by Yes Bank.

▪ PAYTM:-
This mobile wallet app company has also collaborated with the UPI
platform to provide customers the facility to transact and transfer funds in an easier
manner. Customers can add money into their Paytm wallets with the UPI ID. Along
with other payments options such as debit/credit card, net banking, etc., UPI is also
one among them. Customers can also initiate collect money requests through Paytm
with UPI. After the remitter accepts the payment request, the money is added to the
Paytm wallet.

▪ BHIM APP:-
The BHIM (Bharat Interface for Money) app has been developed by the
National Payments Corporation of India (NPCI). This app is known for its simplicity.
It also offers a very secure interface. The payment interface comes with all the
essential features and is known for its good user experience. Funds transfers can be
initiated either through VPA, QR code or bank account number and IFSC Code.

• MOBIKWIK:-
 This Indian payments network also joined the UPI interface. All
Mobikwik customers can use UPI to add money into their wallet. They already
provided various services such as fund transfer using debit/credit card, net banking,
cash pickup and cash deposit. The e-wallet service provider also has tied-up with
various e-commerce merchants.

• GOOGLE TEZ:-
Launched by technology giant Google, the Tez app is one of the other
apps that will provide customers the facility of using UPI. What makes this app
different is that it is available in many Indian languages such as Telugu, Tamil,
Marathi, Kannada, Gujarati, Bengali, and Hindi.

• UBER:-
Now, Uber has included UPI as one of the modes of payment. You can pay
for your Uber rides with this interface.

• CHILLR:-
This payments app has made available UPI as one of its payment methods.
This app had been providing fund transfer facility through IMPS before it joined the
UPI bandwagon.

• PAYTM PAYMENT BANK:-

Paytm Payments Bank will now include the Unified Payments Interface
(UPI) system as one of its features. The facility will soon be launched for all account
holders after testing and fixing bugs. The feature is likely to be made available in the
next few weeks. Paytm Payments Bank UPI will allow customers to transfer funds
with a UPI ID to all merchants or account holders without any hassle, at the click of
a button. The interest rate offered by the payments bank is around 4%.

• SBI PAY:-
This is a State Bank of India (SBI) app that is specially built for UPI
requirements. The main advantage of this app is that even those who do not hold an
account in SBI can use the app to send and receive money using a VPA. The app is
very simple to use and one can easily register for the service after downloading the
app.

• IMOBILE:-
 The UPI interface can be used through the iMobile and Pockets app
offered by ICICI Bank. The app can be downloaded from Google Play store. To send
money through this app, you have to go to the ‘Funds Transfer’ option and click on
the UPI method.

• AXIS PAY:-
Axis Bank is one of the other banks that has launched a UPI enabled
platform for its customers. This comes with a very user-friendly interface and
various other features.

• BOB UPI:-
The BOB UPI app has been launched by Bank of Baroda and can be
downloaded from Google Play Store. One of the advantages of this app is that it
provides customers certain additional features that are not available on other UPI
apps.

Around 52 banks in the country have collaborated with UPI to provide customers
the service. While most banks have developed their own UPI app in their existing
mobile apps, other banks do not have UPI, while some banks have partnered with
third parties to provide customers’ access to UPI.

The UPI interface is changing the way digital payments are being made in the
country. There a number of UPI apps in the market and there are more and more
such apps that are being launched. Another important point to remember is that you
can use any UPI app to link your bank account Therefore all UPI apps are
interoperable. For example, a customer can use or connect a Yes Bank account on
the ICICI Pockets app.

➢ ADVANTAGES OF UPI:-

• Using the UPI pin, you will be able to make the most secure payment. This is
a very safe medium, it just gives you a single PI, through which you can
transfer money.
• If you make payment from UPI, you will not have to pay any charges as this
is completely free by the Indian government.
• UPI that you can also send any payment at one time or ask for it in your
account. It either deposits money into your account or transfers money to
another account in a matter of seconds.
• UPI offer access to all your bank account through a single mobile application
• You can send payment to any unified payments interface support bank, which
is very easily without any charge, the State bank of Panjab national bank, and
all other banks.
• UPI is easy to access, you can use24*7 hours a day, at any time and any place,
even on public holidays.
• UPI is the one that does not need to fill in the various details like ATM card
number, IFSC code, account number.
• The UPI payment is very simple, with the help of this, you can send money
quickly and easily to another account.
• If you send any money to another account holder, then if you send the same
payment through the UPI, they are given some cashback in it. You can get a
lot of benefits from it.

➢ DISADVANTAGES OF UPI:-

• UPI is a deal for smaller fund transfers, when an amount is high then other
modes of online transfer are preferable.
• Another issue with UPI is that it is difficult to persuade customers to download
the bank application to their smartphone for a single payment interface
because they are concerned about online fraud.
• Do not tell your personal information such as the date of birth, The UPI pin,
and other information to any other person, so that your account will be safe.
• If you want to transfer payment in the UPI, then you can transfer up to Rs
10,000 as much as possible. You should send it one at a time if you need to
send it more than once.
• You must know that you have to transfer money from the unified payment
interface pin is also known as the UPI pin, and it is a very small digit, 4 to 6
digit while having a small digit, it is not safe, so make your payment carefully
and its information does not let anyone else know.
• It does not work on the slow of the internet.
• UPI is a very fast and safe medium, but sometimes it takes a lot of time to
send the payment after the bank’s server down.
• If you want to pay using the UPA, you won’t need the UTI support app, which
you’ll need to install on your Android smartphone and use regularly take your
mobile RAM too much. So that your mobile hangs or uses too much internet
to avoid it, you can clear app cache and background data to the user can also
shut down.
CHAPTER 2:- RESEARCH
METHODOLOGY
Research may be very broadly defined as systematic gathering of data and
information and its analysis for advancement of knowledge in any subject.
Research attempts to find answer intellectual and practical questions through
application of systematic methods.

A research methodology or involves specific techniques that are adopted in

research process to collect, assemble and evaluate data. It defines those tools that
are used to gather relevant information in a specific research study. Surveys,
questionnaires and interviews are the common tools of research.

Research methodology is applied on two important types of research process which

involves basic research and applied research. Basic research includes the work or
research that has not been done before. On the other hand, applied research
involves the work that has already been done.

ABOUT THE REPORT:-

➢ TITLE OF THE STUDY:-

The current study is titled as “A PROJECT REPORT ON
PLASTIC MONEY”.

➢ OBJECTIVES OF THE STUDY:-

• Primary Objective:-
To know the perception of people towards plastic money.

• Secondary Objectives:-
· To know the importance of plastic money in the daily life of consumers.
· To study the benefits of debit card and credit cards.
· To find out the market leader among the various banks/companies issuing
credit and debit cards.
· To know the problems faced by respondents using plastic money.
· To study the satisfaction level of consumers towards plastic money.
Department of Economics, Government Dungar
College, Bikaner, Rajasthan, India.
• Dr. Jyoti Kapoor Bhargava: AN ANALYTIC STUDY OF THE
PLASTIC MONEY IN INDIA

▪ RESEARCH DESIGN:-
The approach used for data collection is a structured questionnaire
which consists of questions Relating to the socio-economic profile of the
respondents, the factors that motivated the customers to use Plastic Money, problems
faced in using plastic cards, level of satisfaction, attitudes and perceptions.
Convenience sampling technique is used to collect the opinion from the online
respondents. The target Population to collect data was young adults, graduates and
employees of organizations within the age of 16 years to 55 years. A total of 107
responses were taken for the analysis. The data was collected using Convenience
sampling in city Bikaner.

This research is based on multi-methods, using both quantitative

and qualitative techniques, in Data collection. Both types of data have been collected,
but it must be noted that the questionnaire Survey has been used as a main data
collection instrument for this study because the questionnaire Survey enables
researchers to examine and explain relationships between constructs, in particular,
Cause-and-effect relationships. The questionnaire was shared via Google Form. The
secondary data are The relevant reports viz., RBI monthly bulletins, business dailies,
books and journals, e-media and other Literature available in this field. This study
has used suitable statistical tools such as Average and Standard Deviation (SD). The
statistical tests like t-test, was employed to test the set hypothesis.

▪ INDIAN BANKING INDUSTRY AND PLASTIC MONEY:-

The banking industry has experienced a significant transformation
in the last few decades. One of the major objectives of banking sector
development was to encourage operational self-sufficiency, flexibility and
competition in the system and to increase the banking standards in India to the
international best practices. The advancements in technology have brought the
mobile and internet banking services to the fore. The Indian economy expanding
 rapidly at more than 7.5 per cent per annum and the middle class budding
cashless transactions in India are becoming very popular. Generally, increasing
reliance on cashless transactions is seen as sign of a modern economy where
there is a strong synergy between the ordinary consumers and its financial
institutions.

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 ones 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.

From the security point of view, the most sensitive operations are credit
and debit. The main threats are concentrated in these two operations. These threats
include using of fake payment instrument, modifying communications of payment
instrument, and illegal crediting. Other two operations are less sensitive and the
probability of security incident during these operations is much smaller. Physical
devices, such as smart cards or personal computers, are held by clients and by
merchants. Merchants interact with clients and with their acquiring bank or other
collection point, such as a third-party payment processor. Issuers receive funds in
exchange for prepaid balances distributed to clients and manage the “float” in the
system that provides financial backing for the “value” issued to consumers. In some
cases, other intermediaries, such as banks, retailers or service providers, distribute
stored-value devices and balances directly to consumers. The system may include a
central clearing house or system operators. Indian economy has flourished with the
advent of Liberalization, Privatization and Globalization. Banking sector is not an
exception too. After financial sector reforms during nineties, the Banking industry
in India has witnessed remarkable changes due to information technology and
computer applications. The information technology has replaced traditional banking
with the wide range of e-Banking products and services like ATM (Automated Teller
Machine), Internet Banking, Credit Cards, PC Banking, EFTs, Debit Cards, Smart
Cards etc.
 ▪ DATA ANALYSIS AND INTERPRETATION:-
A questionnaire tool was adopted in this research to collect responses
of respondents. Here the survey was conducted among 107 educated respondents
divided into 18-25years, 25-40years and 40-55years age group. The responses
were collected online considering the feasibility of both, respondents as well as
the researcher. All data collected has been organized. Of all the age groups, the
percentage of female respondents was 51% and male 49%. This ensures the
gender equality in the data collection. As can be seen in figure , the maximum
respondents are in the age group 20-30 years.

As most of the respondents are young in the age group 18-30 years, the
income classification was done to judge their spending through electronic means ,
especially plastic money. Maximum people (63%) have income in the range Rs.
1000-5000. About 10.5% have income in the range Rs. 5000-20000 and only 12%
have income Rs. 50000 or above . These are primarily either in occupation or have
business. The question was asked to identify the type of plastic cards mostly
preferred. It has been observed that most popular and useful one is ATM cum debit
cards( 70%). 28.3% believe that both credit card and debit card are useful.
 An important component of the study was to find the purpose of the
spending and usage of the cards. It is observed that majority of respondents prefer
using plastic money for buying apparels, paying electricity bills/phone bills and for
online transactions. Use of Debit cards is convenient as they can be swiped anywhere
with ease and the deduction from respective bank, unlike the credit cards where a
swipe generates a future liability of payment for the customer. The easy access to
internet and shopping sites has led to the rise in online apparel shopping by the card
users. However, they do not use plastic money much for investment purposes which
includes trading of securities on stock exchanges, purchase of bonds/ debentures,
purchase of jewellery etc. The reasons may be varying but the behaviors is common
among maximum respondents.

In this modern era, new trends in payment have been emerging. People,
nowadays, have adopted new methods like online payment using Paytm and use of
various plastic cards and smart cards. 67% of respondents believe that plastic money
is the most secured and reliable payment medium in World of increasing fraud and
thefts. About 24% of the respondents believe in using both paper and plastic money
and 8% only paper money.

Consumers now have more payment instruments than ever to choose from,
ranging from cash, credit cards, smart cards, mobile account payments, and
electronic money. Now the consumers are inclining more towards plastic money.
One of the biggest reasons of choosing plastic money over paper money is the
increasing concern for environment as well as increasing duplicity and fear of theft.
Several other reasons are wear and tear of paper money, bulky to carry and difficult
to manage.

It is postulated that use of more credit card/debit card transaction in country

over cash transaction will solve the problem of corruption. Probability of corruption
is more in cash transaction.. About 46% people strongly believe that emergence of
credit card/debit card transaction is useful in solving the problem of corruption at a
bigger level. About 37% believe that it can prevent corruption to a larger extent,
while 13% have no thinking of their own in this regard.

Every aspect in life has its own pros and cons. Unlike, regular banking-
going to the branch holding account with and waiting in a long queue to withdraw
or credit the money or cheque received, the technology has helped us use ATM
(Automated Teller Machines) and debit cards to withdraw or transfer money into
someone else’s bank. The drawbacks can be judged from the figure below. People
are now getting aware about plastic money and its usage. Majority of the people
(58%) agree that plastic money usage will be more in the future and will have a
massive impact on economy, while 18% disagree with the above reasoning. One of
the biggest reasons of increasing penetration in India would be the perception of
people and the prevalent trend of going cashless.

In order to analyze the trends in Plastic Cards hypotheses were taken. To test
the hypotheses t-Test has been conducted. This test was developed by W.S. Gosset,
popularly known as students t- test.

Null Hypothesis H0:- There is no significant difference between average

circulation of Debit card and Credit Card.

Alternative Hypothesis H1:- There is significant difference between

average circulation of Debit card and Credit Card.

tcal = 10.44
For df = 10, ttab= 1.812 (Level of Significance is 5%)
Avg1 = 816.23, Avg2 = 34.28
As the calculated value of t is greater than the table value, the hypothesis is rejected.
Hence, There is a significant difference between the average circulation of debit
cards and credit cards. There is phenomenal rate of addition of both types of cards.
The average number of debit cards (Average: 816.23 Million) in circulation has seen
a steady growth as compared to average number of circulation of credit cards
(Average: 34.28 million).

• TRANSACTION VOLUME OF CARDS:-

Null Hypothesis H0:- There is significant difference between transaction

volume of Debit card and Credit Card.

Alternative Hypothesis H1:- There is no significant difference between

transaction volume of Debit card and Credit Card.

The calculated value of t is smaller than the table value, hence the null
hypothesis is accepted i.e. there is significant difference between transaction volume
of debit card and credit card. Usually major expenses are made through credit card,
therefore, the average transaction volume of credit card (2739.43 million) is more
than average transaction volume of debit card (1213.34 million).
International Journal of Education, Modern Management, Applied Science & Social Science (IJEMMASSS) – April
– June, 2021

tcal = 1.98
For df = 10, ttab= 1.812 (Level of Significance is 5%)
Avg1 = 1213.34, Avg^2 = 2739.43

• TRANSACTION VALUE OF CARDS:-

Null Hypothesis H0:- There is less or no significant difference between transaction

value of Debit card and Credit Card.

Alternative Hypothesis H1:-There is significant difference between transaction

volume of Debit Card and Credit Card.

tcal = 0.27

For df = 10, ttab= 1.812 (Level of Significance is 5%)

Avg1 = 3663.78, Avg2 = 4026.57

 The calculated value of t is smaller than the table value, hence the null
hypothesis is accepted i.e. there is significantly less difference between average
transaction value of debit card and credit card. The total transaction value of both
debit card and credit card has gone up where the average transaction value of credit
card (4026.57 billion) is earning slightly more value than average transaction value
of debit card (3663.78 billion)

• CARD TRANSACTION GROWTH:-

The volume of overall transaction steadily increased over the period 2014-
2019 recording Annual growth rate of over 26.6% in credit card and 49.9% in debit
card. The growth is spectacular and could be attributed to development in cashless
economy.

The volume of credit card transaction grew at an annual rate of 26.6% while
their transaction value grew by 34% each year from 2014-2019. Similarly debit card
transaction volume grew at an annual rate of 49.9% while their transaction value
grew by 48.5% each year from 2014-2019. Furthermore, most of growth came from
debit card transaction.

There is certainly no shortage of credit card choices available for consumers.

A significant number of 6802.15 average credit cards have been issued and is
increasing every year with a steady rate.

Debit cards provide the convenience of paying directly from the account
with all the security. It works like a cash, only better. They are issued by various
banks and it uses funds directly from the owner’s bank account and is accepted
worldwide. For the year 2014, debit card issued were 53.79 million and increased to
86.98 million in year 2018 dwarfing all other forms of non-cash payments including
credit card.

• EXPECTED NUMBER OF CARDS IN CIRCULATION IN FUTURE:-

The number of debit card in circulation in country is expected to rise from
1079.60 million to 1740.50 million by 2024. Similarly, the number of credit card in
circulation is expected to rise from 54.9 Million to 156.6 million by 2024. Expected
average number of cards in circulation shows that the market will grow
phenomenally and will attribute to development in cashless economy.
• FINDINGS OF THE STUDY:-
The First objective of the study was to know the awareness and popularity
of plastic money among the customers. The findings reveal that majority of
respondents use plastic money in one form or another and out of them, they have
been using it for over many years. The Second objective was to study customer’s
perception towards plastic money. The findings reveal that majority of respondents
prefer using plastic money in one form or another. It was also revealed that majority
of the respondents using plastic money as mode of payment are satisfied with their
Debit/Credit cards and the services provided by the company.

Talking about Precaution to be taken while using Plastic Cards,

consumers recommend the use of Security Pin and digital signatures to reduce the
misuse of plastic money. Hence in totality it is found that use of Debit card is the
most beneficial to the consumers and the future of plastic money is bright.

The Third Objective was to study the satisfaction level towards plastic
money. It was observed that many people are going for electronic transaction and
are satisfied because it is easily accessible and time saving. Majority of the people
agree that plastic money usage will be more in the future and will have a massive
impact on economy. Lastly, spending patterns of people now-a-days is slowly and
gradually changing and they have started preferring credit cards and debit cards as a
mode of payment in routine life as well as while travelling also. It is expected that
paper money will be completely replaced by plastic money.

• CONCLUSIONS AND FUTURE PROSPECTS:-

It is inferred that the changing pace of technology has taken a step
towards the transformation of the economy. This change has proposed people to
initiate the usage of plastic money instead of the conventional hard cash for carrying
out transactions on a daily basis. This also enables them the advantage of credit
purchases and post-repayment option for the amount of credit utilized on these cards.
More transactions are taking place in plastic money than paper notes due to risk in
carrying cash. It is also observed that there are frauds in plastic money, some of them
can be solved. Consumers prefer these cards mostly for online shopping.

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. As the study is being carried out in a
city of Bikaner the results cannot be generalized.
Smooth, simple and secure payment processes will help bring about
behavioural changes and faster adoption of digital payments and banking among un-
banked segments. There is still a huge potential market in India as consumption is
still dominated by cash, with cards contributing only 5 percent of the personal
consumption expenditure. Rapid growth in smart phone usage and online shopping
habits contributes to the increasing trend of use of credit and debit cards. In India,
safety standards followed by players to prevent misuse match the best in the world.
CHAPTER 3 :- LITERATURE REVIEW
A number of studies have been done regarding the Plastic Card usage.
Following are a few of them :-

• Hirschman 1982; Jonker 2005:-

We complement our analysis of payment behaviour with qualitative data
on payment attribute perceptions. Perceptions – or perceived differences in payment
attributes – have been found to be important determinants of consumer payment
behaviour.

• Feinberg Richard A. (December 1986):-

It was found that consumers prefer plastic money over paper money and
the major benefit that the card provides to the customers is the convenience and
accessibility. The major problem according to them is the increased transactional
costs and unnecessary formalities to procure the cards from the financial institutions.
They felt that the future of plastic money is bright and according to them, the next
thing to come via technology would be the use of digital signatures.

• Brito and Hartley (1995):-

Indicate that the cost of paying interest on credit card debt is likely to be
lower than the transaction costs associated with arranging loans from banks or other
financial institutions.

• Telyukova and Wright (2005) and Zinman (2007):-

Show that consumers maintain balances in their low-interest-bearing
bank accounts for liquidity reasons, even while carrying high-interest credit card
debt. The authors suggest that a rational consumer may pay interest on credit card
debt to avoid some of the expected costs associated with not holding precautionary
or transactions balances.

• Zinman (2007a) and Klee (2006):-

Have shown that individuals who carry revolving credit card balances
are significantly more likely than convenience users to adopt debit.

• Mandeep Kaur and Kamalpreet Kaur(2008):-

In their article, “Development of Plastic Cards Market: Past, Present
and Future Scenario in Indian Banks” conclude that Indian banking sector is
accepting the challenge of information technology as all the groups of bankers have
now recognized it as essential requirement for their survival and growth in future
Despite the strong advances in e-payments, an estimated 90 percent of personal
consumption expenditure in India is still made with cash which indicates the
tremendous growth potential of this business. So this can be considered as mere
beginning which indicates the bright future prospects of plastic card market in India.

• Alvares, Cliford (2009):-

The article reports on the problem regarding fake currency in India. It
is said that the country’s battle against fake currency is not getting easier and many
fakes go undetected.
It is also stated that counterfeiters hitherto had restricted printing
facilities which made it easier to discover fakes. According to chief economist
Soumendra K. Dash, the solution to the problem is to provide people incentive to
use plastic cards and make cashless transactions.

• In this Project, we revisit the contents and method of Keynes’s Indian Currency
and Finance(1971a). By focusing on the rationale of his proposal for a new
international monetary system combining cheapness with stability, we argue that
Keynes’s analysis of monetary developments in Asia in the first years of the
twentieth century may provide useful hints for an overall rethinking of the major
faults of today’s Bretton Woods II system. (2010–11).

• Subhani in 2011 conducted a study on ‘Plastic Money/Credit Cards Charisma for

Now and Then’. The study was based to find out the charisma of plastic money, its
usability and affordability and its impact on its preference to use. The research found
that the preference to use of plastic money/ credit card has its pros and cons with its
usability and affordability. According to the consumer behaviour, plastic money is
a form of conditioning and acts as a stimulus which qualifies a consumer to spend.
The study shows that the preference to go for plastic money has a positive
association with the easy use of Plastic money because the precept of credit card
usability is linked with a psychological phenomena that people are likely to spend
less with credit card and spend more with the same amount of cash on hand in the
same budget and this precept also linked with the consumer self convenience, i.e.
convenience and easy use which delves into spending.

• Khurana, Sunayna1,Singh, S. P.( 2011 ):-

 In today’s busy world, nobody has the time to withdraw money from the
bank account for shopping. Everybody is interested in carrying the plastic money
(credit card and debit card) in their wallet for shopping as it gives convenience,
safety, easiness and even style. IN this cutthroat competition, banks have to work
hard to gain market share and to meet the expectations of customers so that they can
delight their customers. This study is carried out to identify customer preferences
and expectations from credit/debit card services. The main objective is to identify
the factors that influence the choice of credit cards, customer satisfaction, and
consumer behavior regarding the credit card in Tier-III cities. Primary data was
collected from 200 respondents by the questionnaire method. Results show that the
choice of credit card depends upon income, gender and profession of the respondent.
Customer satisfaction depends upon income, frequency of usage in a month and
amount of usage per month.

• Loewenstein and Hafalir in (2012) :-

Conducted a study on “The Impact of Credit Cards on spending”. The
study focused on two types of customers, revolvers (who carry debt) and
convenience users (who do not carry debt), and measured the impact of payment
with credit card as compared with cash by an insurance company employees
spending on lunch in a cafeteria. It was found that there was change in the diner’s
payment medium 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 pattern.

• Bansi Patel and Urvi Amin (2012):-

In their research paper “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.

• P Manivannan (2013):-
In his research paper “Plastic Money a way for cash Less Payment
System” examined that Plastic Money i.e. usage of Credit card was measured a
luxury, and has become needed. These plastic money and electronic payments was
and used by only higher income group. This facility extended not only to customers
in urban areas or cities, but also to customers residing in rural area. However, today,
with development of banking and trading activity, the fixed income group or salaried
classes are also start using the plastic money and electronic payment systems and
particularly Credit cards.

• Vimala V. and Dr. Sarala K.S., (2013):-

“Stressed on the Usage and perception of plastic money among the
customers of BOI” with emphasis of the awareness level, perception and usage of
new innovative services in regards to plastic money.

• Sushma Patil, 2014 Anupama Sharma (2012):-

In her research paper “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.

• Tabrez Haq and Bushra Malik, (2014):-

“Consumer response towards the usage of plastic money” with
emphasis on increase of shift of plastic money in India by consumers from credit
cards to Debit cards -The distribution of plastic money has increased due to the fact
that banking sector has become more aggressive. Moreover, duplication of users is
an important area of concern for the industry which can exaggerate the number of
active users. The present paper makes an attempt to understand the after effects of
recession on plastic money industry and its impact on consumer preferences. The
paper duly investigates the acceptability of the cards among the Indian consumer
and the factors influencing the card choice.
CHAPTER 4 :- DATA ANALYSIS &
INTERPRETATION
• The data was collected from 300 respondents by means of Questionnaire/Schedules
and then analyzed. The Findings of Analysis were as follows :-

Table 1: Response for Plastic Cards is the most Convenient way of paying