A

PROJECT REPORT
ON
“PERCEPTION OF CONSUMER TOWARDS USE OF PLASTIC MONEY”

UNDER THE GUIDANCE OF

PROF.

SUBMITTED TO UNIVERSITY OF MUMBAI

IN PARTIAL FULFILLMENT OF 18 MONTHS FULL TIME
COURSE POST GRADUATE DIPLOMA IN
MANAGEMENT (PGDM

SUBMITTED BY
Ms. DRISHYA RAO
(BATCH 2021-2023)

(UNIVERSITY OF MUMBAI’S GARARE INSTITUTE OF CAREER

EDUCATION AND DEVELOPMENT, BSS FOUNDATION)
MUMBAI

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 DECLARATION

I, the undersigned, hereby declare that the project report entitled

“PERCEPTION OF CONSUMER TOWARDS USE OF PLASTIC
MONEY”, written and submitted by me to the University of the Mumbai, in
partial fulfilment of the requirement for the award of degree of Master of
Business Administration under the guidance of ANIRUDH SHAH is my
original
work and the conclusion drawn therein are based on the material collection by
myself.

Place: Mumbai
Date: 07-01-2023
Drishya Rao

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 INDEX

SR. No. Topic Page No.

1 Introduction to the project
2 Theoretical Background
3 Company Profile
4 Research Methodology
5 Data Analysis & Interpretation
6 Findings
7 Suggestions
8 Conclusion
9 Bibliography & Webliography
10 Annexure

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 Abstract

Today it is impossible to imagine modern bank operation, commercial transaction and other
payment without using the plastic card. Plastic currency is now gradually becoming the norm
across the globe as more and more developed countries are opting for plastic compared to
paper as there are several inherent advantages. The growing incursion of smart phones has
made technology applications much more accessible to users. The Government also moves
forward for a ‘Digital India’ and its focus on growing electronic payments is significant
drivers for growth in replacing physical payments with technology-backed solutions. India is
at the cusp of a tectonic shift towards electronic money from traditional cash. For instance,
the Pradhan Mantri Jan Dhan Yojana (PMJDY), is slowly building recognition among people
to move from paper to electronic money. The PMJDY alone has seeded over 150 million
Rupay card in the last year, in addition to the 400 million debit cards already in circulation.
There is still emergence for significant increase in the usage of debit cards in the years to
come as card. This paper focus on the challenges and future prospects of plastic money in
India.

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CHAPTER – 1
INTRODUCTION

Indian economy has flourished with the advent of liberalization, Privatization and
Globalization. Banking sector isn’t an exception too. These reforms have presented a
challenge before Indian banking system in India it cannot have a healthy economy. The
banking system of India should not only be problem free but it should be able to meet new
challenges posed by the technology and the other external and internal factors but, ere
technology up gradation or introduction of innovative products cannot improve the state of
affairs till customers don’t respond to it positively. Hence, it becomes very necessary for the
bank to offer the service or products while taking into consideration the customer’s wants,
preferences, perceptions and convenience. The bank’s services are not simply confined to
their particular branch customers only. Customers are now treated as customer of banks as a
whole, which implies that he is currently capable of enjoying facilities such as anywhere,
anytime banking (Kamesam, 2003).
This concept as enabled the bankers to ascertain long term connection with their customers.
Hence, Electronic banking is the new trend significantly adopted by banking sector
worldwide because of its wider scope for the customer as well as banks at large. Various
sophisticated products have been launched by the banks which facilitate them to satisfy the
basic necessities of the customers. With entry of tech savvy private sector banks and foreign
banks, the competitive environment has started prevailing in baking sector too. No doubt,
Public-sector banks have large network of ancient branches to approach their customers as
compared to the private and foreign players. However, with the assistance of information
technology, it has now become possible for banks to deliver products and services with
efficiency and to improve customer base without opening new branches. Hence, these new

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private and foreign players are trying to complete with them on the basis of adoption of new
technological services like plastic cards, PC banking, Electronic Funds Transfer (EFT), net
banking etc to approach the maximum customers in spite of having less physical branches
(Venkatesh and Kumar 2007) Attributable to this reason, public sector banks also are likely
to move towards electronic banking, which ultimately leads the entire banking sectors to the
remarkable improvement with respect to it efficiency, client services, productivity,
profitability etc. Thus, Banks are now reengineering the way in which their services can be
reached to their customers by bringing in flexibility in their “Distribution channels” the
information technology has replaced the brick or traditional banking with the wide range of
E-banking products and services like ATM (Automated Teller Machine), Cards, PC banking,
EFTs, Debit Cards, smart Cards etc. With the effect of this dynamic environment, Indian
banking has witnesses exceptional growth since 2006 as banking sector is growing by 18%
and it is six times over the last decade growth.

1.1] Financial System

A bank is a type of financial institution that issues credit and accepts public deposits.
Through capital markets, lending activities can be carried out directly or indirectly. Due to
their significance in a country's financial stability banks are heavily regulated in most nations.
The majority of countries have institutionalised the fractional reserve banking system, in
which banks keep liquid assets that are only partially equivalent to their current liabilities.
Banks are typically subject to minimum capital requirements based on an international set of
capital rules known as the Basel Accords, in addition to other restrictions meant to ensure
liquidity.
The development of banking in the modern sense began in the 14th century in the affluent cities of
Renaissance Italy, although it was in many respects only a development of the principles of credit and
lending that had their origins in antiquity.
Several financial families, including the Medicis, the Fuggers, the Welsers, the Berenbergs, and the
Rothschild, have been influential throughout the course of banking history. Banca Monte dei Paschi di
Siena is the oldest retail bank still in operation, whereas Berenberg Bank is the oldest merchant bank
still in operation.

1.2] Etymology
The word "money" is believed to originate from a temple of Juno, on Capitoline, one of
Rome's seven hills. In the ancient world Juno was often associated with money. The temple
of Juno Moneta at Rome was the place where the mint of Ancient Rome was located. The
name "Juno" may derive from the Etruscan goddess Uni (which means "the one", "unique",
"unit", "union", "united") and "Moneta" either from the Latin word "monere" (remind, warn,
or instruct) or the Greek word "moneres" (alone, unique). In the Western world, a prevalent
term for coin-money has been specie, stemming from Latin in specie, meaning 'in kind'.

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Money is any item available or verifiable record that is generally accepted as payment for
goods and services and repayment of debts, such as taxes, in a particular country or socio-
economic context. The main functions of money are distinguished as a medium of exchange,
a unit of account, a store of value and sometimes, a standard of deferred payment. Any item
or verifiable record that fulfils these functions can be considered as money. Money is
historically an emergent market phenomenon establishing a commodity money, but nearly all
contemporary money systems are based on fiat money. Fiat money, like any check or note of
debt, is without use value as a physical commodity. It derives its value by being declared by a
government to be legal tender that is, it must be accepted as a form of payment within the
boundaries of the country, for "all debts, public and private". Counterfeit money can cause
good money to lose its value. The money supply of a country consists of currency (banknotes
and coins) and, depending on the particular definition used, one or more types of bank money
(the balances held in checking accounts, savings accounts, and other types of bank accounts).
Bank money, which consists only of records (mostly computerized in modern banking),
forms by far the largest part of broad money in developed countries.

1.3] INTRODUCTION OF PLASTIC MONEY

Plastic money or polymer money, made out of plastic, is a new and easier way of paying for
goods and services. Plastic money was introduced in the 1950s and is now an essential form
of ready money which reduces the risk of handling a huge amount of cash. It includes debit
cards, ATMs, smart cards, etc. Credit cards, variants of plastic money, are used as substitutes
for currency. This book on plastic money, are used as sections titled concepts and
experiences. The former covers articles on the emergence of plastic money, different types of
plastic cards and their growth in India and other related issues. An experience discusses the
experience of banks like Standard Chartered, Citibank, which deals with plastic money and
their growth in the market.

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

DEFINITION
A slang phrase for credit cards, especially when such cards used to make purchases. The
‘plastic’ portion of this refers to the plastic construction of credit cards, as opposed to paper
and metal of currency. The ‘money’ portion is an erroneous reference to credit cards, as a
form of money, which they are not. Although credit cards do facilitate transactions, because

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they are a liability rather than an asset, they are not money and not part of the economy’s
money supply.

CHAPTER- 2
Theoretical Background

HISTORY OF PLASTIC MONEY

History of Plastic Money started in 1967 when Reserve Bank of Australia (RBA) found fake
Australia $10 dollar banknote in circulation. They were concerned about an increase in
counterfeiting with the release of colour photocopiers that year. In 1968 the RBA started
collaborations with The Commonwealth Scientific & Industrial Research Organisation
(CSIRO) and The University of Melbourne. Funds were made available in 1969 for the
experimental production of distinctive papers.

In 1955, Tyvek was first discovered by DuPont researcher Jim White who saw polyethylene
fluff coming out of a pipe in a DuPont experimental lab. It was trademarked in 1965 and was
first introduced for commercial purposes in April 1967. Tyvek is a nonwoven product
consisting of spun bond olefin fibre.
In 1980, American Bank Note Company (ABNC) had the contract to produce paper notes for
Costa Rica, Ecuador, El Salvador, Haiti, Honduras and Venezuela. In the early 1980's ABNC
joined forces with Dupont to produce sample or specimen Tyvek banknotes for these
countries.

Tyvek did not perform well in trials, smudging of ink and fragility were reported as
problems. Only Costa Rica and Haiti issued Tyvek banknotes, Haiti in 1982 and Costa Rica
with notes

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dated 28.06.1983. Trial notes were produced for Ecuador, El Salvador, Honduras and
Venezuela but never placed in circulation. Additionally, English printers Bradbury Wilkinson
produced a version on Tyvek but marketed as Bradvek for the Isle of Man in 1983 however,
they are no longer produced because the company was sold. Today, all Haiti Tyvek
banknotes are scarce and their prices skyrocket each year as they were the first Tyvek
banknotes issued by any country.
In 1972, insertion of an optically variable device (OVD) created from diffraction gratings in
plastic as a security device inserted in banknotes was proposed. The first patent arising from
the development of polymer banknotes was filed in 1973. In 1974 the technique of lamination
was used to combine materials, the all-plastic laminate eventually chosen was a clear, BOPP
laminate, in which OVDs could be inserted without needing to punch holes.
In 1988, Note Printing Australia (NPA) produced Australia first Polymer plastic note for the
Australian Bi-Centennial in 1988. The first issues did not have sufficient bonding and the
Captain Cook OVD was easily removed. The technique was modified later on with additional
layers of bonding which held the printing.

2.1] POLYMER BANKNOTES HISTORY IN MALAYSIA

Bank Negara Malaysia (BNM) only issued Malaysia first polymer banknote in 1998 with
RM50 1998 Commonwealth Games Polymer banknote (RM50 SUKOM 98). some non-
collector bloggers posted in their blog last year, Malaysia RM50 1998 Commonwealth
Games Polymer banknote (RM50 SUKOM 98) as a new 50 ring git banknote for 2012.

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On 26 October 2004, Bank Negara Malaysia start to issued Malaysia RM5 polymer
banknotes, Malaysia first polymer banknotes in circulation. 80 million pieces of RM 5
polymer banknotes were produced for the first batch of the note. In February 2011, a former
Bank Negara Malaysia assistant governor Datuk Mohamad Daud Dol Moin, 58, has claimed
trial at a Sessions Court in Kuala Lumpur yesterday, for accepting RM100,000 bribe from, to
secure a contract for printing a RM5 polymer notes by Note Printing Australia Ltd.
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. By 1951 there were 42,000 Diners club cards in
circulation.

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  1958 - American Express saw this as direct competition to its traveller’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
International.
 1980-With only two players in domestic card industry, HSBC and Citibank the
number swelled to over 25 in the year 2010.
 1981- Credit cards in India made their debut and are on the verge of an unprecedented
boom. 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. Plastic Money business is
definitely going big time. 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. However, the card-based usage has picked up only
during the last few years. Payment by cards is now becoming a much preferred mode for

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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 non-cash
payment of goods and services and are designed to facilitate small value retail payments by
offering a bank notes and coins and thus to complement traditional payment instruments.
The recent growth in the use of plastic money mainly credits 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. With 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 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 upgradation 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. It can be well imagined from the discussion that no doubt, the plastic
cards market is growing at a large pace in India yet it has long way to go as it lacks behind if
compared to the usage trends of other countries. Hence, it has become important that the
payment system in India has to be modernized enough to be at par with the systems prevalent
in other countries, since our domestic financial markets are increasingly getting integrated
with markets abroad. 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. 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.
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 check
book. Debit cards are like digitized versions of check 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

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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 rate.

2.2] TYPES OF PLASTIC MONEY

 DEBIT CARD - Debit cards are substitutes for cash or check payments, much the
same way that credit cards are. However, banks only issue them to you if you hold an
account with them. When a debit card is used to make a payment, the total amount
charged is instantly reduced from your bank balance. Don't borrow on your credit
card! Here's why? A debit card is only accepted at outlets with electronic swipe-
machines that can check and deduct amounts from your bank balance online.

 CREDIT CARD - A credit card is plastic money that is used to pay for products and
services at over 20 million locations around the world. All you need to do is produce
the card and sign a charge slip to pay for your purchases. The institution which issues
the card makes the payment to the outlet on your behalf, you will pay this 'loan' back
to the institution at a later date.

 PRE-PAID CARD - Prepaid credit cards are also known as secured credit cards. They
require the same credit application process as a standard credit card. These cards can
be useful for borrowers seeking to establish credit or improve their credit score. These
cards can be compared to prepaid debit cards which use preloaded funds for
transactions.

 ATM CARD - An ATM card is a payment card or dedicated payment card issued by a
financial institution which enables a customer to access automated teller machines

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 (ATMs). ATM cards are payment card size and style plastic cards with a magnetic
stripe or a plastic smart card with a chip that contains a unique card number and some
security information such as an expiration date or CVVC (CVV). ATM cards are
known by a variety of names such as bank card, MAC (money access card), client
card, key card or cash card, among others. Most payment cards, such as debit and
credit cards can also function as ATM cards, although ATM-only cards are also
available. Charge and proprietary cards cannot be used as ATM cards. The use of a
credit card to withdraw cash at an ATM is treated differently to a POS transaction,
usually attracting interest charges from the date of the cash withdrawal. Interbank
networks allow the use of ATM cards at ATMs of private operators and financial
institutions other than those of the institution that issued the card.

 CHARGE CARD - A charge card carries all the features of credit cards. However,
after using a charge card you will have to pay off the entire amount billed, by the due
date. If you fail to do so, you are likely to be considered a defaulter and will usually
have to pay up a steep late payment charge. When you use a credit card you are not
declared a defaulter even if you miss your due date. A 2.95 per cent late payment fees
(this differs from one bank to another) is levied in your next billing statement.

ACCORDING TO USE OF PLASTIC MONEY

 VISA
 MASTERCARD
 AMERICAN EXPRESS
 EURO CARD
 DINERS CLUB
 NOVUS
 MONDEX SMART CARD
 JCB (DOMINATE IN JAPAN)

2.3] THE HISTORY OF CREDIT CARDS AND DEBIT CARDS IN PLASTIC

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

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

PLASTIC BECOMES THE STANDARD

The first diner’s club cards were made out of cardboard or celluloid. In 1959 American
Express changed all that with the first card made of plastic. American Express created a
system of making an impression of the card presented at the register of payment. Then that
impression was billed to the customer and due in full each month. Several American Express
cards stills operate like this as of 2010. It was not until the late 1980s that American Express
began allowing people to pay their balance over time additional card options.

BANK CARD ASSOCIATION

In 1966, Bank of America created a card that was a general-purpose card or ‘open loop’ cad.
These ‘closed loop’ agreements limited cards like Diners Club and American Express to
certain merchants, unlike the new ‘open loop’ cards. The new general-purpose system
required interbank cooperation and additional regulations. This created additional safety
features and began building the credit card system. Two systems emerged as the leaders –
Visa and Master card. However, today there is little difference between the two and cost
merchants accept both and associations.
DEBIT CARD EMERGE
The Visa association of cards took credit cards to a new level in 1989 when they introduced
debit cards. These cards inked consumers to their checking accounts. Money was now drawn
from checking account at the point of sale with these new cards and replaced check writing.
This helped the merchants check that money was available and made it easier to track the
customer if the funds could not be obtained. Consumers liked the convenience of not having
to write cheques at the point of sale, which made debit cards safe alternatives to cash and
cheques.
THE FUTURE EMERGE
There were almost million debit card users as of 2006, with projected 34.4 million users by
2016. However, online services like Pay pal are emerging as a way for people to pay their
debts in new, secure and convenient ways. Technology also exists to have devices implanted
into phones, keys and other everyday devices so that the ability to pay at the point of sale is
even more convenient.

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2.4] ADVANTAGES & DISADVANTAGES OF PLASTIC MONEY

Advantages:
 Plastic money, unlike paper money, will not burn easily and can resist higher
temperatures than paper money. You have no fear to be theft. And it’s easy to use.
 Plastic money, unlike paper money, will not burn easily and can resist higher
temperatures than paper money.
 Paper money also picks up dirt and stains more easily than plastic money. Plastic
money is the debit and credit cards.
 Plus, point of plastic money is that you won't have to carry your cash around all the
time. It also doesn't wear after time as paper does nor does it rip and tear.
 Give you incentives, such as reward points, that you can redeem. Be more convenient
to carry than cash.
 Provide a convenient payment method for purchases made on the Internet and over
the telephone. Help you establish a good credit history.
 Eliminates the need for carrying huge cash: This eliminates the need for carrying huge
load of cash which is risky and inconvenient too.
 Risk of Loss or Theft minimized: In case of cash there is a high risk of losing cash
and a chance of cash getting stolen. However, in case of debit/credit card you can
report the matter to the bank and block the card to avoid misuse.
 Anytime/Anywhere Access Using cards you have the unique advantage and
convenience of using it anywhere in the country or even abroad.
 Credit Facility: In case of credit card, you have the option of buying on credit or
paying later. Although the charges are high, it helps you in case of emergencies and
contingencies.
 Online Payments: You can use cards for online payments, fund transfers and various
other transactions.
 Cash vs Plastic money, which one will you go for? If you are the one who always
forgets your PIN number, cash is the best option for you. As saving the PIN in mobile
is not a good idea. What if mobile gets lost? We need to think about all possibilities as
it is our hard-earned money. There are many advantages of carrying plastic money.
The convenience, the quality of cards when compared to bank notes, difficulty to
duplicate easily like notes etc are a few to name. You need to get a better idea of the
advantages, isn't it? Let us learn in detail the advantages of using plastic money
instead of cash.

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  Cards fit into the wallet easily: It is essential that we need to have some sort of money
in hand always as we never know when a need arises. But carrying a lot of cash in
hand is not at all a wise idea. Also, who would want to carry a lot of cash in hand and
make their wallet bulge out. In such situations, plastic money comes for help. Your
wallet

will remain perfect and your cash needs will also be sorted out. If required you can take
cash using plastic cards. Also, it is safe when you have a card with you as even if it is
lost, you can always call the bank and ask them to block it. This avoids misusing the card
by any. But when it is cash, you are not left with that option and you will end up losing
your money. Cards are waterproof hence you don't have to get panicked even if water
spilled over your wallet. They are strong and durable.
 Crime rates will decrease: We are living in a world where thefts and crimes are on the
increase. Keeping cash in hand is not a safe thing to do. It will not give you peaceful
nights. So be practical and opt for plastic money. You do not have to worry when
someone runs away with your wallet, as long as you only have plastic money in it.
The guy needs, PIN number to use it hence he can't take the cash or swipe it. As soon
as you know that you are pickpocketed, you can call the bank and ask them to block
or cancel the card. If it was actual cash in its place, then it is easy for the thief. He can
easily take the cash and throw the wallet somewhere. But with plastic money, his job
has become a difficult one. He needs to know cracking techniques to find the PIN
number to use the cards. Hence worries associated with theft will be less in case of
plastic money. Another merit is that the fingerprints on a plastic card are clearer than
that on bank notes.
 Provides credit facility: How about having a card that provides you a credit facility?
That sounds good right? With the advent of credit cards, you can purchase anything
today and you are given sufficient time to pay for it. Only with plastic money, you
avail this credit facility. The advantage of having this facility is that you need not go
behind people to borrow money in case of emergencies, instead, you can use the card
in your hand. Also, you get ample amount of time to repay the amount. It is like a best
buddy who helps you in case of financial needs. Purchase today and pay later, isn't
that a benefit you are getting? This factor is one of the main reasons why people are
attracted towards credit cards.
 Tracking transactions becomes easy: Having a track of your daily or monthly
transactions is always good. By using the plastic money, you are automatically
keeping a track of all your transactions. You can verify it later if required. When we
are using bank notes, we might forget later for what we spend it, unless you have the
habit of noting down every cash transaction you make. This is not the case with
plastic cards. The banks normally send the statement of debit or credit card to its
customers on a monthly basis which will have the list of all your transactions for that
particular month. This transaction history might help us at times when we misplace a
bill. We can show the transaction details to prove that we have made a purchase. Also,
for us to have a check of our expenses or any particular transaction made in the past,
these statements are useful.
 0% Instalment options: Certain credit cards provide its customers the facility to
convert their purchases from selected outlets to instalment options of 3, 6 or 12

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 months at 0% interest rate. The customer is given the option to select the period of
instalment which cannot be changed later. If you have selected 6 months instalment
plan and paid it off

within 5 months, then you will have to pay an extra fee. Therefore, be careful and pay
only according to the instalment period selected. It is an amazing facility offered by the
banks as it helps you to purchase that thing you wish today and pay in equal
instalments within a period of specific time. Will you avail this facility if you are using
cash? A big No is the answer. Therefore, this is indeed an advantage of plastic money.
 Convenience of making payments from home: In olden days when there was no
plastic money, we need to go personally to each place to make a payment be it utility
payments or booking tickets. But now you can pay at your own convenience sitting at
home with the use of plastic money. For example, you need to go to the travel agency
to pay cash for your ticket, instead, you can book your ticket online. Also, when a
travel agency is involved, they charge commission or fee but when you are booking
the ticket directly from the airline's website, you are saving on it. Plastic cards can
also be used for online purchases. We can see many online shops coming up these
days. If you find something interesting on a website and would want to have it, you
can always purchase it anytime using plastic money. Another advantage is that certain
websites do not charge you the service fee if you are making payment through plastic
money as the payment is done upfront. A service fee will be charged in cash on
delivery option. Plastic money can be used 24 * 7 for online purchases.
 Is internationally acceptable: One of the main advantages of plastic money is that the
same card can be used locally as well as internationally. For example, you can get rid
of the hassle of converting the cash into the currency of the country you are planning
to travel. If you have an international debit or credit card, you can make your
purchases with that card itself. So, the problem of running out of cash will not happen
even if you are abroad and that helps you to have a safe journey without worrying
about the cash and budget. Sometimes we end up not buying something that we
actually like due to insufficient cash but when you have a credit card with you, you
can always purchase it and pay later. Especially from abroad as it is not practically
possible to visit the country again to buy stuff.

Disadvantage:

 Cost much more than other forms of credit, such as a line of credit or a Personal loan,
if you don't pay on time. Damage your credit rating if your payments are late.
 Allow you to build up more debt than you can handle. Have complicated terms and
conditions. It also doesn't wear after time as paper does nor does it rip and tear.
 Paper money also picks up dirt and stains more easily than plastic money. I can't
really see any advantages to have paper money, unless it is cheaper to make.
 Its disadvantage is that, some extra money will be deducted for the bank services. It’s
around 2.5% of the money you spent. So far, I’ve been sounding like a nice, pleasant
Bank Executive who is convincing you to open an account. Please note a few points
before we look at the disadvantages of plastic money.
 Cards/plastic money is not a complete replacement for cash.

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  Use of cards can also be risky in some cases.

 Note: I’m not saying that cards are not useful because of these drawbacks. The
disadvantages are just to make you aware of any risks, threats, etc. so that you can use
it carefully.
 Like everything, plastic money also has its own merits and demerits. We should
wisely use it keeping all the below points in mind. If you are clever, you can make use
of the cards but not everyone can be clever. So, for those who are not well aware of
the cards and its disadvantages should always be careful to avoid themselves being in
trouble. Many people play with cards and might not end up paying a single penny as
interest. Never follow them as not everyone is smart with cards and we might end up
losing money.
 Just plastic money won't help always: Plastic money is not a complete replacement for
cash. In certain places, we need cash itself. While buying fish from the market or
when paying to the newspaper boy, we need cash itself as they do not carry POS
machine to swipe the plastic money. Similarly, we pay money at religious places for
offerings, there also they do not take plastic money. Unless we have the facility to use
plastic money everywhere, we cannot replace cash completely. Still, there are small
retail shops which do not take plastic money. In villages, hardly we find any shops
that accept plastic money. It makes us necessary to carry some cash always for our
safety.
 Plastic Money is also not 100% safe: There is a certain amount of risk involved in
transactions which involves plastic money as well. Especially when doing online
shopping. We are exchanging the details relating to our card over the internet which is
not always a safe place. Some websites are just set up to steal our financial
information and loot money thereby. We should not fall in to such scams and hackers.
One should be a smart online shopper in this world.
 Minimum purchase requirements: One of the major disadvantages of using plastic
money is that one needs to make a minimum purchase in order to swipe their card.
For instance, if the minimum purchase is Rs. 50.00; and we have purchased items for
only Rs. 40.00, you can't use your card for this transaction unless you purchase for Rs.
50.00. In this case, you will have to purchase something unnecessary to make it Rs.
50.00. If we had sufficient cash in hand, we could have avoided spending extra Rs.
10.00.
 Service charge in certain cases: When we are using plastic money instead of cash, in
certain cases the bank charges a service charge for the purchase of certain items. For
instance, in some countries, the service charge is levied on card transactions when you
purchase gold from jewellery. When paying cash, this additional charge will not be
taken.
 Card too can get damaged: Imagine a situation wherein you have made a purchase and
when the counter you realize that your card is damaged or when trying to swipe, the
transaction is not getting proceed due to some chip error or damage. You will
definitely wish if you had some cash in hand. These cases occur only when plastic
money is used. It might be a rare case but the possibility cannot be completely
ignored.

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  Interest, for non-payment: A credit card allows you to purchase today and pay for at a
later period of time. It gives you a credit period, but if we fail to make the payment

within the due date, interest will be charged. When we are using cash, we are not taking
any credit from the bank, hence non-payment does not occur.

Merits:
 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.

Demerits:
 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

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 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.

Different Plastic Cards services of a bank

 VISA Prepaid (prepaid card – local)
 VISA Prepaid (prepaid card – international)
 VISA Prepaid (prepaid card – dual)
 Souvenir Card (gift card – local)

 VISA Debit Card (classic, silver and gold)

 Debit Card with Credit facility
 VISA Credit Card - (classic, silver, gold)
 VISA Credit Card - (local, international)
 VISA Credit Card – Local currency
 VISA Credit Card – Dual currency

Credit Card service types:

 Online (Currently Used)
 Offline (Currently not used)

Credit facility in Debit cards of DBBL:

 Gold (Credit limit is TK. 20 lacs)
 Silver (Credit limit is TK. 50 thousand)
Classic (No credit limit)

2.5] CREDIT CARD

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 A credit card is a small plastic card issued to users as a system of payment. It allows its
holder to buy goods and services based on the holder's promise to pay for these goods and
services. The issuer of the card grants a line of credit to the consumer or the user from which
the user can borrow money for payment to a merchant or as a cash advance to the user. Usage
of the term "credit card" to imply a credit card account is a metonym. When a purchase is
made the user would indicate consent to pay by signing a receipt with a record of the card
details and indicating the amount to be paid. Issuer agrees to pay the merchant and the credit
card user agrees to pay the card issuer.
DEFINITION: The credit card can be defined as “A small plastic card that allows its holder
to buy goods and services on credit and to pay at fixed intervals through the card issuing
agency’’.
MEANING: A credit card is a card or mechanism which enables card holder to purchase
goods, travels and dine in a hotel without making immediate payments. The holders can use
the cards to get credit from banks up to 45 days. The credit card relieves the consumers from
the
botheration of carrying cash and ensures safety. It is a convenience of extended credit without
formality. Thus, credit card is a passport to, “safety, convenience, prestige and credit”.

ADVANTAGES & DISADVANTAGES OF CREDIT CARD 

ADVANTAGES OF CREDIT CARD
The benefits of credit card can be grouped as follows:

(A) BENEFITS TO THE BANK

a) A credit card is an integral part of banks major services these days. The credit card
provides the following advantages to the bank: the system provides an opportunity to the
bank to attract new potential consumer.
b) To get new customers the bank has to employee special trained staff. This gives the bank
an opportunity to find the latent talent from among existing staff that would have been
otherwise wasted.
c) The more important function of a credit card, however, is simply to yield direct profit for
the bank. There is a scope and a potential for a better profitability out of income / commission
earned from the traders turn over.
d) This also provides additional customer services to the existing clients. It enhances the
customer satisfaction.
e) More use by the car holder and consequently the growth of banking habits in general.
f) better network of card holders and increased use of cards means higher popularity and
image of the bank.

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g) Savings of expense on cash holdings, i.e., stationery, printing and man power to handle
clearing transactions while considerably is reduced.

(B) BENEFITS TO CARD HOLDER

The principal benefits to a card holder are:
a) He can purchase goods and services at a large number of outlets without cash or cheque.
The card is useful in emergency, and can save embarrassment.
b) The risk factor of carrying and storing cash is avoided. It is convenient for him to carry
credit card and he has trouble free travel and may purchase his without carrying cash or
cheque.
c) Months purchases can be settled with a single remittance, thus, tending to reduce bank and
handling charges.

d) The card holder has the period of free credit usually between 30-50 days of purchase.
e) Cash can usually be obtained with the card, either on card account or by using it as
identification when encashing a cheque at the bank.
f) Availing credit with minimum formality.
g) The credit card saves trouble and paper work to traveling business man.

(C) BENEFITS TO THE MERCHANT ESTABLISHMENT

The principal benefits offer credit card to the retailer is
a) This will carry prestigious weight to the outlets.
b) Increases in sale because of increased purchasing power of the cardholder due to unbilled
credit available to the card holder.
c) The retailers gain from the impulse buying and trading up the tendency to buy the bigger
or better article
d) Credit card ensures timely and certainly of payments.
e) Suppliers/sellers no longer have to send reminders of outstanding debits.
f) Systematic accounting since sales receipts are routed through banking channels.
g) Advertising and promotional support on national scale.
h) Development of prestigious clientele base.

DISADVANTAGES OF CREDIT CARD

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The following are the common disadvantages of the credit card:
a) Some credit card transactions take longer time than cash transactions because of various
formalities.
b) The customer tends to overspend out of immerse happiness.
c) Discounts and rebates can rarely be obtained.
d) The cardholder is responsible for charges due to loss or theft of the card and the bank may
not be party for loss due to fraud or collusion of staff, etc.
e) Customers may be denied cash discount for payment through card.
f) It might lead to spending habits and cardholders may end up in big debts.
i) Avoid the entire cost and security problem involved in handling cash.
j) Losses to bad debts and reduced an additional liquidity.
k) It also allows him to delegate spending power to add on members

STEPS FOLOWED IN CREDIT CARD TRANSACTION

1.AUTHORIZATION
• For Internet Merchants, the shopping card is connected to or integrated with a Payment
Gateway. For Retail Merchants, the card is swiped through a magnetic reader on the point-of-
sale terminal the authorization is transmitted to the appropriate card issuer for approval. The
issuing bank of card issuer authenticates the card holder and approves or declines the
transaction amount.
• It is important to note that no money changes hands during the authorization. Merchants
must re-present the transaction to receive payment.

2. MERCHANT BANKING
• This is also known as batching out. Most post terminals and all payment gateway per firm
an auto close functions at the end of the day and batch out automatically.

3. CAPTURE
• The front-end processor matches the authorization data to the settlement data and transmits
the card capture file to a back-end processor for V/MC transactions or to the appropriate card
issuer for other card types.

4.CLEARING

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• During this stage the back-end processor performs compliance checks and risk management
procedures and transmits the transaction to V/MC or to the appropriate card issuer for other
card types.

4. INTERCHANGE
• During this stage the V/MC Association sort the transactions by issuing bank and transmit
them to the appropriate issuing banks for settlement.

5. SETLEMENT
• During this stage the Issuing Bank calculates fees and deductions and routs the net funds to
the appropriate Card Issuer which determines the daily deposits for the merchants.

6. MERCHANT ACH
• During this stage the acquiring bank or card issuer transmits the merchant deposit to the
merchant’s checking account. 

Different Types of Credit Cards

Credit cards are of various types; everyone has to select credit cards on the basis of the pros
and cons of each type of credit card and at the same time the nature of use. This article gives
an insight into the several types of credit cards available in the market Today, credit card
customers enjoy more options and choices than ever before. To gain new customers, credit
card companies compete by offering new services and cards to customers. No matter what
your needs, chances are good that there is a card out there that would be ideal for you. If you
are looking for the right card, you can begin by considering the many types of cards available
to you:
a) Low Interest Credit Cards

These types of credit cards offer very low interest. In some cases, these cards just charge
a few percent interests. The reasons for this are numerous. In most cases, the low interest
rate is for a limited time only. After a set number of months, you will begin paying higher
interest rates. In some cases, low interest credit cards are not really credit cards at all -
they are debit cards linked to a low-interest loan such as a line of credit. Check your
agreement to find out what type of card you have. If you need to consolidate debts or if
you like the idea of having low interest for a while, this type of credit card can be perfect
for you.

b) Instant Approval Credit Cards

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These cards are really a product of our fast-paced society. The idea behind this type of credit
card is that once you fill out your application, you will be told whether you are approved or
not right away. The approval process only takes a few minutes. Instant approval credit cards
are very popular online and applicants can apply via the internet or over the phone. If you are
very impatient or need credit right away, these types of cards can be for you. However, you
should be aware that these cards do not guarantee that you will be approved right away -
sometimes, more time is needed to process your application. Another drawback to these cards
is that they rely heavily on your credit score. If you have poor credit or any extenuating
financial circumstances, these types of cards may not be for you.
c) Balance Transfer Cards
Balance transfer cards are a type of temporary low-interest card that is meant to help you
consolidate your debt. They work this way - if you have several credit cards with a balance,
you can get a balance transfer card. You then transfer all your credit card debt onto the new
card and work to pay it off. Since the new card has a low interest rate, you can quickly repay
your bills. If you are in debt, a balance transfer card can be a great way to get out of debt. It
offers the convenience of one bill and low rates. However, some cards have high fees. Also,
if you run up your other cards after consolidating your debts or if you are unable to pay off
your new card in the limited time before the low interest rate increases, you may find yourself
even more in debt than before.

d) Rewards Credit Cards

Rewards credit cards offer you points, rewards, or bonuses for every cash purchase made
with your credit card over time. As you accumulate rewards or points, you can redeem your
bonus for entertainment events, purchases, travel, and other fun prizes. Some cards even offer
customers extra automatic-enter sweepstakes and draws. Each time you use your card, you
are entered into a draw to win specific prizes. These types of cards are really a marketing tool
for card companies. Companies know that customers love rewards and prizes and so offer
these enticements to lure customers. The major advantage of these cards is that they can help
you get more cash value for your money. They can also be fun and rewarding for almost any
credit card customer. However, not all reward credit cards are a deal. Some charge high fees
to offset the costs of the bonuses. Some also have very low points systems, meaning that you
need to spend a lot with your credit card to get any rewards at all. Read the fine print
carefully before signing.

e) Cash Back Credit Cards

Cash back credit cards give you money rewards. When you make a purchase with this type
of credit card, you get some points based on the amount of money you have spent with your
credit card. When you accumulate enough points, you get cash back. On most cards, you can
get back about 1% of your total purchases. These cards are great for those who are budget-
conscious as they give you some money back from your purchases. However, there are
several drawbacks to these types of cards. Some cards have low cash-back percentage rates.
Some charge high fees or have limits on how much money you can get back each year. Most

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cards only offer you cash back advantages on purchases - not on your balance. If you decide
this card is right for you, do compare several cards offers to find the best cash back credit
card option.

f) Airline Credit Cards

This type of card allows you to accumulate frequent flyer points on all your credit card
purchases. If you travel a lot or love to travel, this card can help you accumulate points for a
free trip or for a discount ticket. In many cases, these cards are great because they allow you
to gather points for every purchase. However, these cards can also charge high fees. In some
cases, your points will expire if you do not use them within a specified time. Worse, some
airline credit cards make use of a point system that is not very user-friendly. You may have to
slowly accumulate an enormous number of points to qualify for a trip. If you do not love to
travel and if you do not use your Credit card a lot, then, your ability to get rewards you like
may be very limited.

g) Prepaid Debit Cards

These cards are sometimes called junior credit cards. They are not truly credit cards at all,
since you are not getting credit or loans from the credit card company. Instead, these cards
work by having you deposit some money into the card account. You can then use your card to
charge any amount up to the amount in the account. When you add more money, you can
charge more to your card.
h) Secured Credit Cards
Secured credit cards use collateral to ensure that the card company will be paid back. Often,
these cards are used by people with no credit or bad credit. With secured credit cards, you can
enjoy credit card convenience even if you do not qualify for traditional cards. However, you
will also have to cope with the additional fees and low credit limits that these credit cards
have.
i) Credit Cards for Bad Credit

Bad credit cards are designed for people with poor credit histories. These cards generally
have very low credit limits and charge extra fees. This is because they are designed for
people who are considered far less likely to repay their debts. If you have a bad credit rating,
these types of credit cards can be a great way to rebuild your credit history. These cards can
also allow you to have credit even if you would be rejected for most other cards due to your
credit history
.
j) Student Credit Cards

Student credit cards are cards meant to attract college and university students. These cards
often offer sign-up bonuses for students. They are also easier to apply for, since credit card

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companies recognize that students have much shorter credit histories than the average
customer. If you are a student, student credit cards can be a great option. They are simple to
use and can help you build a good credit rating before you graduate. However, there are some
disadvantages to student credit cards. These cards may have no reward programs and may
have fewer benefits, including fewer bonuses and services, than other cards.

k) Business Credit Cards

Business credit cards are created especially for business use. They offer many of the same
advantages as traditional credit cards, but also offer services that can really help a business.
With some business credit cards, for example, you can enjoy higher interest rates, extra cards
for business employees, monthly reports on your expenses, and services that let you keep
your personal and business expenses separate on the same card. These advantages mean that
using this card for your business is more convenient.

TYPES OF CREDIT CARDS OFFERED BY BANKS

A) Silver Cards
Silver credit cards rank lowest among the metal named cards, and, because of lower prestige
when compared to gold and platinum cards, are commonly known as basic and standard
credit cards. Silver credit cards come with advantages such as lower annual membership fees
if there is any, and a lower threshold salary which banks use to evaluate your application in
case you should apply. Silver credit cards will provide you with almost the same credit limit
as other cards provided you have a good credit history. You can also avail of 0% interest
balance transfer schemes which are made available for a period of 6-9 months for silver card
holders. There are also some disadvantages to using silver credit cards. One would be the
lower cash advance limits, less rewards and promotional packages, and less travel perks
compared to gold and platinum cards. HDFC Bank, ICICI offer silver credit cards through
their HDFC Bank Silver cards and ICICI Sterling Silver credit card.

B) Gold and Platinum Cards

Gold and platinum credit cards are a status symbol for any credit card holder, bringing
prestige since getting gold and platinum cards usually require that you have good credit rating
and a higher income level. Gold and platinum cards offer higher limit for cash advance
withdrawals and sometimes can provide higher credit limits as compared to standard or silver
cards. If you have a gold or platinum card, you also get better perks and privileges such as
travel insurance, extended warranties for appliance purchases and special deals on specific

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products, and purchase protection insurance. You can also engage in some loyalty schemes
that are offered for gold and platinum credit card holders which can sometimes involve cash
back promos and reward points systems. Some popular gold and platinum cards available are
the American Express Gold card, and the ICICI Solid Gold Credit Card. It is not possible to
cover them the exact offerings of these cards but I will highly advice you to check all these
websites of the banks to get all the info about the credit cards they are offering. Also try to
talk to your friends who are having credit cards to get more info.

Types of Credit Cards offered By Indian Banks

 Credit Card Data - Credit Card is either Visa or MasterCard which is the Most popular and,
in some instance, American Express. The Top 10 Credit Card Issuers in India are as follows,
1. ICICI Bank - 5.07 Mn
2. HDFC Bank - 4.42 Mn
3. SBI Cards - 2.65 Mn
4. Citibank - - 2.54 Mn
5. HSBC Cards - 1.3 Mn
6. ABN Amro - 0.78 Mn
7. Axis Bank - 0.57 Mn
8. Deutsche Bank - 0.495 Mn
9. American Express - 0.45 Mn
10. Data Courtesy - The Reserve Bank of India

2.6] DEBIT CARD

A debit card (also known as a bank card or check card) is a plastic card that provides an
alternative payment method to cash when making purchases. Functionally, it can be called an
electronic cheque, as the funds are withdrawn directly from either the bank account or from
the remaining balance on the card. In some cases, the cards are designed exclusively for use
on the Internet, and so there is no physical card. In many countries the use of debit cards has
become so widespread that their volume of use has overtaken the cheque and, in some
instances, cash transactions. Like credit cards, debit cards are used widely for telephone and
Internet purchases and, unlike credit cards, the funds are transferred immediately from the
bearer's bank account instead of having the bearer pay back the money at a later date. Debit
cards may also allow for instant withdrawal of cash, acting as the ATM card for withdrawing
cash and as a cheque guarantee card. Merchants may also offer cash back facilities to
customers, where a customer can withdraw cash along with their purchase.

TYPES OF DEBIT CARD SYSTEM

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A) Online Debit System - Online debit cards require electronic authorization of every
transaction and the debits are reflected in the user’s account immediately. The transaction
may be additionally secured with the personal identification number (PIN) authentication
system and some online cards require such authentication for every transaction, essentially
becoming enhanced automatic teller machine (ATM) cards. One difficulty in using online
debit cards is the necessity of an electronic authorization device at the point of sale (POS)
and sometimes also a separate PIN pad to enter the PIN, although this is becoming
commonplace for all card transactions in many countries. Overall, the online debit card is
generally viewed as superior to the offline debit card because of its more secure
authentication system and live status,
which alleviates problems with processing lag on transactions that may only issue online
debit cards. Some on-line debit systems are using the normal authentication processes of
Internet banking to provide real-time on-line debit transactions. The most notable of these
are Ideal and POL.

B) Offline Debit System - Offline debit cards have the logos of major credit cards (e.g. Visa
or MasterCard) or major debit cards (e.g. Maestro in the United Kingdom and other
countries, but not the United States) and are used at the point of sale like a credit card (with
payer's signature). This type of debit card may be subject to a daily limit, and/or a maximum
limit equal to the current/checking account balance from which it draws funds. Transactions
conducted with offline debit cards require 2–3 days to be reflected on users’ account
balances. In some countries and with some banks and merchant service organizations, a
"credit" or offline debit transaction is without cost to the purchaser beyond the face value of
the transaction, while a small fee may be charged for a "debit" or online debit transaction
(although it is often absorbed by the retailer). Other differences are that online debit
purchasers may opt to withdraw cash in addition to the amount of the debit purchase (if the
merchant supports that functionality); also, from the merchant's standpoint, the merchant
pays lower fees on online debit transaction as compared to "credit" (offline) debit
transaction.
C) Electronic Purse Card System Smart-card-based electronic purse systems (in which value
is stored on the card chip, not in an externally recorded account, so that machines accepting
the card need no network connectivity) are in use throughout Europe since the mid-1990s,
most notably in Germany (Geldkarte), Austria (Quick), the Netherlands (Chipknip), Belgium
and Switzerland (CASH). In Austria and Germany, all current bank cards now include
electronic purses. Prepaid Debit Card Prepaid debit cards, also called reload able debit cards
or reload able prepaid cards, are often used for recurring payments. The payer loads funds to
the cardholder's card account.
D) Prepaid debit cards - use either the offline debit system or the online debit system to
access these funds. Particularly for companies with a large number of payment recipients
abroad, prepaid debit cards allow the delivery of international payments without the delays
and fees associated with international checks and bank transfers. Providers include Caxton
FX prepaid cards, [Escape prepaid cards and Travelex prepaid cards. [ Whereas, web-based
services such as stock photography websites (stockpot), outsourced services (odes), and

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affiliate networks (Media Whiz) have all started offering prepaid debit cards for their
contributors/freelancers/vendors.

BENEFITS & FEATURES OF DEBIT CARDS

BENEFITS OF THE DEBIT CARD

 FREE WITH OUR BANK ACCOUNT - Obtaining a debit card is easy. If we qualify
to open a bank account, we usually get a debit card, if our bank offers the service.
 NO BACKGROUND CHECK - When we are applying for a debit card, the ban does
not need to look into our credit history. All we need is the documentation to open a
bank, account, and money in our bank when we use our debit card.
 CASH WITHDRAWALS - The customer can withdraw a minimum of Rs. 100/- and
a maximum Rs.10, 000/- per day.
 CONVENIENCE - A Debit card fees us from carrying a lot of cash or a cheque book.
In case, we are an international traveller, we don’t need to stock up on Travellers’
Cheques or cash. We can use our debit card to withdraw Cash from over 500,000
ATMs around the world in over 100 countries. We can withdraw in the local currency
of the country we are in, limited only by the money we have back home in our
account, and Business Travel Quota (BTQ) limit arability.
 FAIR EXCHANGE - If we return merchandise or cancel services paid for with a
Debit card, the transaction is treated as if it were made with cash or a check.
Customers usually get cash back for offline purchases; for on-line transactions, the
amount is credited to our account.
 STATEMENT OF ACCOUNT - A statement of transactions can be obtained from the
customer’s branch. For example, a mini statement containing the last four transactions
and balance can be obtained at a State Bank Group during the working hours of the
customer’s branch.
 BANKING CUM SHPPING CARD - Your Debit card can be used as ATM card at
any ATM across the world, as well as for making purchase at merchant locations. You
can also withdraw cash from any of the 12000 ATMs in India.

FEATURES OF DEBIT CARD

 It is a combination of a Cheque and ATM card. Therefore, there are no fees for using
the ATM for cash withdrawal, or as a debit card for purchase.
 The Debit Card services in meant for withdrawals against the balance already
available in the designated account.
 It is the card holder’s obligation to maintain sufficient balance in the designated
account to meet withdrawals and service charges.
 A Debit card is more affordable than credit card. We just our bank account for all our
transactions. No credit periods. Our bank account is debited immediately.

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  No credit check is required to get a Debit card.
 Use of card is terminated without notice, upon the death, bankruptcy or insolvency of
the cardholder or for other valid reason.
 Spending is limited to our bank balance. 
Process Debit Card Transactions - A successful business will usually accept debit cards as a
part of their overall profile of payment solutions. If you don’t process debit cards, you may
not be taking full advantage of all the potential that your merchant account can deliver. There
are essentially two ways you can accept debit cards, online and offline.
Off line debit card transactions - An offline debit card transaction is still the way most
merchants accept debit cards. This is essentially the same as processing credit cards. You
swipe your customer’s debit card through a credit card terminal and have them sign the
receipt. If you choose to accept debit cards offline, be sure that the debit card has a VISA or
MasterCard logo. Otherwise, the debit card won’t be approved and you won’t be able to
process the debit card offline
Online debit card transactions - The most advantageous way to process debit cards is to do it
online. You will still be able to accept debit cards at the point of sale, but you will need to
install a PIN pad on your credit card terminal. An online debit card transaction works much
like a credit card transaction, except that after your customer swipes his or her debit card,
they will enter a PIN instead of signing the receipt. At this point the encrypted debit card
information is sent to the customer’s bank for authorization, and you’ll receive the funds just
as you would for a credit card transaction. Your business has many advantages when you
accept debit cards. For example, you pay a flat fee for each debit card transaction that you
process, instead the flat fee plus percentage rate that you are charged when you accept credit
cards. Over time, this can potentially save you a lot of money. Another advantage when you
process debit cards is that you can’t be charged higher “downgrade” fees. In a credit card
transaction, you are usually charged the “discount rate.” However, some transactions are
considered to be a higher risk or expense to the bank, and you are charged a higher rate as a
result. But when you accept debit cards, you always pay the same flat rate, with no danger of
the rate increasing. You can also cut down on checkout time when you accept debit cards. It
takes an average of 30 seconds to hand over the pen, wait for the customer to sign the receipt,
and then take the pen back. If you process 20 credit card transactions a day, you’re losing 100
minutes a day just passing a pen back and forth! That’s almost two hours.
 Plastic Fraud State-of-the-art thieves are concentrating on plastic cards. In the past, this type
of fraud was not very common. Today, it is a big business for criminals. Plastic cards bring
new convenience to your shopping and banking, but they can turn into nightmares in the
wrong hands. This pamphlet describes credit and debit cards and some common schemes
involving card fraud with tips to help you avoid them. The following are the types of frauds

1. Stolen Cards at the Office

2. Extra Copies of Charge Slips
3. Discarded Charge Slips
4. Unsigned Credit Cards
5. Loss of Multiple Cards

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6. Strange Requests for Your PIN Numbers
7. Legitimate Cards
8. Altered Cards
9. Counterfeit Cards

TECHNOLOGY AND INFRASTRUCTURE

One of the most important features that plastic money offers is the technology associated with
this business. Although a third world country, with lot of insecurities and almost no
infrastructure, Pakistan has no exception when it comes to credit card business. There is
approximately 3000 Points of sale Terminals (POST) present on merchant’s site connected
with bank host system. Inter-city connectively is accomplished through X.25 networks.
Perhaps, it is the most important time in the history of Pakistan as the parameters of its
Infrastructure are coming into existence.
There is an immense need of reliable wide area connectivity and this market is so
infrastructures are coming into existence.
There is an immense need of reliable wide area connectivity and this market is so huge and
lucrative that it can accommodate many more industry giant.

IMPACT OF GOVERNMENT- PROVIDED BANK ACCOUNT

In January 2016, the UK government introduced fee- free basic accounts for all, having a
significant impact on the prepaid industry, including the departure of a number of firms

CONSUMER PROTECTION
Consumer protection vary, depending on the network used. Visa and MasterCard, for
instance, prohibit minimum and maximum purchase sizes, surcharges, and arbitrary security
procedures on the part of merchants. Merchants are usually charged higher transaction fees
for credit transactions, since debit network transactions are less likely to be fraudulent, since
debit network transactions are less likely to be fraudulent. This may lead them to “steer”
customers to debit transactions. Consumer disputing charges may find it easier to do with a
credit card since the money will not immediately leave their control.

Fraudulent charges on a debit card can also cause problems with a checking account because
the money is withdrawn immediately and may thus result in an overdraft or bounced checks.
In some cases, debit card issuing banks will promptly refund any disputed charges until the
matter can be settled, and in some jurisdictions the consumer liability for unauthorized
charges is the same for both debit card and credit cards.

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In our Country India and well as the other country like Sweden, the consumer protection is
the same regardless of the network used. Some banks set minimum and maximum purchase
sizes, mostly for online-only cards. However, this has nothing to do with the card network,
but rather with the bank’s judgement of the person’s age and credit records. Any fees that the
customers have to pay to the bank are the same regardless of whether the transaction is
conducted as credit or as a debit.

FINANCIAL ACCESS
Debit cards and secured credit cards are popular among college students who have not yet
established a credit history. Debit cards may also be used by explained workers to send
money home to their families holding an affiliated debit card.

CHARGES CARDS
With charge cards, the card holder is required to pay the full balance shown on the statement
which is usually issued monthly, by the payment due date it is a form of short-term loan to
cover the card holder’s purchases, from the date of the purchase and the payment due date
which may typically be up to 55 days. Interest is usually not changed on charge cards and
there is usually no limit on the local amount that may be changed if payment is not made in
full, this may result in late payment fee the possible restriction of future transactions and
perhaps the cancellation of the card.

FLLET CARDS
Fllet cards is used as a payment card, most commonly for gasoline diesel and other fuels at
gas stations. Fllet cards can also be used to pay for vehicle maintenance and expenses, at the
discretion of the Fllet owner or manager. The use of the Fllet card reduced the need to carry
cash, thus increasing the security for Fllet Drivers. Elimination of cash also helps to prevent
fraudulent transaction at the Fllet owners or manager expense.

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ATM CARD
An ATM is any payment card issued by financial institution that enables a customer to access
an automated teller machine (ATM) in order to perform transactions such as deposits, cash
withdrawals obtaining account information, etc ATM cards are known by a variety of names
such as bank card, MAC (money access card), client card, key card or cash card, among
others. Most payment cards, such as debit and credit cards can also function as ATM cards
although ATM -only cards are also available. Charge and proprietary cards cannot be used as
ATM cards. The use of a credit card to withdraw cash at an ATM is treated differently to
POS transactions, usually attracting interest charges from the although ATM -only cards are
also available. Charge and proprietary cards cannot be used as ATM cards. The use of a
credit card to withdraw cash at an ATM is treated differently to POS transaction, usually
attracting interest charges from the date of the cash withdrawal. Interbank networks allow the
use of ATM cards at ATMs of private operators and financial institutions other bank those of
the intuitions that issued the cards.

ATM USES

The size of ATM cards is 85.60 mm*53.98 mm (3.370in*2.125 in) and rounded corners with
a radius of 2.88_3.48 mm, in accordance with ISO/IEC 7810, the same size as other
payments cards, such as credit, debit and other cards. They also have printed or embossed
bank card number conforming with the ISO/IEC7812 numbering standard.

ATM USES
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All ATM machines, at a minimum, will permit cash withdrawals of customers of the
machine’s owner (if a bank -operated machine) and for cards that are affiliated with any
ATM network the machine is also affiliated. They will report the amount of the withdrawal
and any fees charged by the machine on the receipt. Most banks and credit unions will permit
routine account related banking transactions at the bank’s own ATM, including deposits,
checking the balance of an account, and transferring money between accounts. Some may
provide additional services, such as selling postages stamps.

NON-ATM USES
Some ATM cards can also be used at a branch , as identification for in-person transactions
ability to use an ATM card for in-store EFTPOS purchases or refunds is no longer allowed ,
however, if the ATM card is also a debit card ,it may be used for a pin -based debit
transactions ,or a non -pin-based credit -card transaction if the merchant is affiliated with the
credit or debit card network the card’s issuer Banks have long argued with the merchants
over the fees that can be charged by the bank for such transactions .Despite the fact that ATM
cards require a PIN for use, banks have decided to permit the use of non-PIN bases card(debit
or credit ) for all merchant transactions, For other types of transactions through telephone or
online banking, this may be performed with an ATM card without in-person authentication.
This includes account balance inquires, electronic bill payments, or in some cases, online
purchases.

MISUSE
Due to increase illegal copies of cards with a magnetic stripe, the European Payments
Council established a Card Fraud Prevention Task Force in 2003 that spawned a commitment
to migrate all ATMs and POS applications to use a chip and -PIN solution until the end of
2010.The “SEPA for Cards has completely removed the magnetic stripe requirement from the
former Maestro debit cards.

RECHARGEABLE CALLING CARDS

INTRODUCTION
A rechargeable calling card is a type of telephone card that the user can “recharge “or “top
up” by adding money when the balance gets below a nominated amount .In reality the
rechargeable calling card is a specialized form a prepaid or debit account .To use the
phonecard ,the user would call an access number (which is usually a toll free telephone
number ),enter the “card number”(also called the PIN ) and then dial the desired telephone
number .The user could add value to the card at the same times making a call.

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After transferring funds to the card company, the ID can be provided electronically by email,
by SMS, over the internet a coupon printed by cash register at a store, or any other way. Also,
as the card balance is actually recorded on the card.
After transferring funds to the card company, the ID can be provided electronically by email,
SMS, over the internet, a coupon printed by a cash register at a store, or any other way. Also,
as the card balance is actually recorded on the card company’s database, topping up can be
affected in any manner that funds can be transferred to the company.

RECHARGING
Cards can be recharged or topped up in variety of ways:
Credit card
Cash at convenience stores/corner shops.
Swipe card machines
Internet
Coupons
Bank account
Debit Card

A CARDLESS FUTURE
As international travel became cheaper and more people started to travel the international
phone card became an essential part of a travellers itinerary , previously customers would
have to carry one or more cards when travelling and the cards could only be used in certain
phones .Phones companies such as Pure Minutes began to release “ cardless ”phone
cards ,instead of being issued with a real card , the user will be given a list of access numbers
for various countries and a pin which they can use to log into their account .This allowed
people to call from any phone in any country and still be able to top-up their credit.

STORE_VALUE CARD
INTRODUCTION
A store -value card is a payments card with a monetary value stored on the card itself, not in
an external account maintained by a financial institution. Stored-value cards differ from debit
cards, where money is on deposit with the issuer, and credit cards which are subject to credit
limits set by the issuer. Another difference between store -value cards and debit and credit
cards are that debit and credit cards are usually issued in the name of individual account
holders, while store-value cards may be anonymous, as in the case of gift cards. Store -value

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cards are prepaid money cards and may be disposed when the value is used, or the card value
may be topped up, as in the case of telephone calling cards or when used as a fare card.

The term closed-loop means the funds and or data are metaphorically ‘physically’ stored on
the token or cards, in the form of binary -coded data. In the case of Bitcoin and other crypto
currencies, this information is stored in the network on a so called blockchain and maintain
by the network itself. With prepaid cards the data is maintained on the card issuer’s
computers. The value can be accessed using a magnetic stripe embedded in the card, on
which the card number is encoded, using radio -frequency identification (RFID): or by the
entering code number, printed on the card, into a telephone or other numeric keypad or in the
case of crypto currency, by signing over the value to another party. In contrast, open -loop
stored value cards are credit and debit payment cards such as Mastercard Contactless.

USES
A VENDING MACHINE
Stored -value cards are most commonly used for low -value transactions , such as transit
system farecards, telephone prepaid calling cards, cafeterias, or for micropayments in shops
or vending machines .They also have an advantage over most other payment in that making

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say , a purchase telecommunication facilities are not needed , which may be important in
situations where the availability or reliability of these facilities are uncertain or costly ,
especially for low-value transactions .A benefit to the merchant is that bank transaction fees
are not incurred as the transaction is processed offline and there need not to be a

PREPAID CARDS
CLOSED SYSTEM PREPAID CARDS

Closed system prepaid cards are cards issued by a merchant and may only be redeemed for
purchases from the merchant. They are typically of fixed amounts and are commonly known
as merchant gifts cards or store cards. These cards are typically purchased to be used as gifts,
and are increasingly replacing the tradition paper gift certificate. Generally, few if any laws
govern these types of cards. Card issuer or sellers are not required to obtain a licence Closed
system prepaid cards are not subject to the USA PATRIOT Act, as they generally cannot
identify a customer.
As debts owed to consumers who purchased the card , these purchases remain on the books
of a merchant as a liability rather than asset .Consequently , gift certificates and merchant gift
cards have fallen under state escheat or abandoned properly laws(APL) .However, the
emergence of closed system prepaid cards has blurred the applicability of APL .North
Carolina and Illinois have excluded these types of cards from APL provided the card has no
expiration date or service fee.

SEMI-CLOSED SYSTEM PREPAID CARDS

Semi -closed system prepaid cards are similar to closed system prepaid cards. However,
cardholders are permitted to redeem the cards at multiple merchants within a geographic area.
These types of cards are issued by a third party, rather

MONEY LAUNDRING

It is common for countries to place limit on how much currency may be taken out of or
brought into a country. However, these limits generally do not apply to money leaving a
country in non-cash forms such as on stored -value cards. There is concern that stored -value
cards can be used for money laundering, that is, moving offshore funds derived from criminal
activities such as drug trafficking. There are reports of these cards being used by Mexican
drug cartels to transfer money across borders.

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For example, in the United States, it is legal for anyone to enter or leave the country with
money that is stored on cards, and (unlike cash in high amounts) does not have to be reported
to customs or any other authority. Some members of the

GIFT CARDS
INTRODUCTIONS
A gift card (also known as gift certificate in North America, or gift voucher or gift token in
the UK) is a prepaid stored -value money card usually issued by a retailer or bank to be used
as an alternative to cash for purchases within a particular store or related business. Gift cards
are also given out by retailers and marketers as part of promotion strategy, to entice the
recipient to come in or return to the store, and at times such cards are called cash cards.

Gift cards are generally redeemable only for purchase at the relevant retail premises and
cannot be cashed out, and in some situations may be subject to an expiry date of fees. Visa
and MasterCard credit cards produce generic gift cards which need not be redeemed at
particular stores and which are widely used for

FUNCTIONS AND TYPES

A gift card may resemble a credit card or display a specific biome on plastic card the size of a
credit card. The card is identified by a specific number or code, or not usually with an
individual name, and this could be used by anybody. They are backed by an on-line
electronic system for authorization. Some gift cards can be reloaded by payment and can be
used this multiple times.
Cards may have a barcode or magnetic strip, which is read by an electronic credit card
machine. Many cards have no value until they are sold, at which time the cashier enters the
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amount which the customer wishes to put on the card. This amount is rarely stored on the
card but is instead noted in the store’s database, which is crosslinked to the card ID. Gift
cards ibis are generally not stored-value cards as used in may public transport systems or
library photocopiers, where a simplified system (with no network) stores the value only on
the card itself.

The magnetic strip is also often placed differently than on credit cards, so they cannot be read
or written with standard equipment other gift cards may have a set value and need to be
activated by calling specific number.
Gift cards can also be custom tailored to meet specific needs. By adding a custom message or
name on the front of the card, it can make for an individualized gift or incentive to an
employee to show bow greatly they are appreciated.
Bank -issued gift cards may be used in lieu of checks as a way to disburse rebate funds. Some
retailers the gift card system for refunds in lieu of cash thereby assuring that the customers
will spend the funds all their store.
A Clarity gift card allows the gift given to make a charitable donation, and the gift recipient
to choose a charity that will receive the donation.

ATVM CARD

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INTRODUCTION
Long bour queues and shortage of coins (change given back to passengers) is what the born
of such machines to save time and travel fast. Basically, there are two types of ATVM
machines, currently there is Smart Card operating Machine and coming up and planned by
Mumbai Railway is Coin operating ATVM, expected soon. This Automatic ticketing
machines were introduced and launched on 10th October 2010, as easy to get travel ticket
system for public travelling by Local Trains in Mumbai by Western Railway and then
adopted by Central railway route also. About 7 to 10 million commuters who daily travels
uses this alternative ATVM machine which is time saving compared to CVM and UTS.

It’s called the ‘SMART CARD ‘which is used by this ATVM machine to get your journey
ticket valid for next 1 hour. Smart cards are available at selected ticket counters from where
the general local train tickets are purchased. One NOT need to be in queue to purchase ready
to use Smart Card which do not require any identity proof to be purchased.

This card will cost at initial amount of Rs 100, from which the first-time usable amount will
be Rs 52to get tickets from ATVM machine and some Rs 30 to balance amount is kept by
Railway as one time security deposit (Refundable). At any given time, you can cancel and
return the smart card which will cost you Rs 10as cancellation charges. Recharge of ATVM
smart cards can be done on any ticket booking counters, currently there is no online recharge
facilities for same Recharge process and Validity and other details of same is follows:

Recharge of ATVM smart card can be in multiple of Rs 50, Maximum up to Rs.500 in single
card.

Validity of this travel card is 12 months from purchase date or recharge date. Travel with in 1
hour limited time using this card tickets.
Railway authority offer 5%extra on every recharge to promote more usage of this cards.

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ATVM Machines
FACTS AND FIGURES
Out of about 1 million daily ticket buyer local train travellers, 13 to 15 percent of them use
this smart cards. Total ATVM Machines installed at Mumbai (Western & Central Railway)
Suburbs are 250.New 135 Such Machines will be installed in Central Railway, Out of which
86 to be installed o Main Line, 43 on Harbour Route and 6 at Trans -Harbour lines. Major
stations like Thane, CST , Kalyan and Vashi commuters getting relief from long queues to
get tickets .
Total of 40 Lakh commuters daily commute on Central Railway route via Local trains. The
AVTM users have increased from 5%during 2011 to 25 % now in 2013. Till date total of 386
ATVMs are operating and Railway plans to add more 286 soon possible in early 2014.

ADVANTAGES OF USING ATVM

Unlike the seasonal pass (Monthly, Quarterly and Yearly) which required identity proof of
purchaser, anybody from your family and friends can purchase and use this card to travel
around Mumbai western and Central Railway routes.
So, if for example the Machines has timing of 5:05 Pm and you request printing a journey
ticket at that time, then it will print 6.00 pm, wow this is a bonus of 55 minutes extra which is
added to 1 hour duration time which calculates the total journey valid time as 1 Hour (As per
ticket rules) and 55 minutes extra. We really don’t know if the new ATVM machines will
have these facilities kept of be removed with printing exact timings of 1-hour valid journey.

1 You will not miss that special convenient train by standing in queue to get you ticket.
2 No need to keep exact fare amount or change coins which are generally asked on Counter

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3No queue to purchase smart card or recharge same.
4 No Huge queue at ATVM machines, as practically CVM coupons are more widely used
too.

POINT OF SALES (POS)

A cash register at a store is referred to as a point-of-sale system. Since all current POS
systems are digital, you can check out a customer from anywhere. A POS app and an
internet-capable device, like a tablet or phone, are all that are required.
The phrase "point of sale" accurately describes the location where your transaction is
completed. The phrase itself is open to several interpretations. In the strictest sense, it refers
to the terminal that processes credit and debit cards as well as any gift cards that your
company may accept and is located next to the cash register. When you refer to a point-of-
sale (POS) device, you more frequently mean the entire terminal, which has an informational
screen and the capacity to accept all major payment types. There are numerous POS items
with specialised uses that fall midway between a basic card terminal and a complete, all-
encompassing POS system. Regardless of whether your needs are high-end or low-end, every
POS machine must perform some of the same fundamental tasks.

POS systems for stores

Even though it may appear to be one from the outside, a modern retail point-of-sale system
performs far more than a traditional cash register. Previously, each product's price had to be
manually entered into the cash register; today, prices are pre-programmed into the system and
are read from a bar code scanner. This greatly reduces the possibility of errors and increases
the accuracy of your sales records. The POS terminal can be configured to track and record
your sales of goods and services in virtually any method that's important to you. Typically,

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this is integrated with your accounting software, putting this data at your fingertips all the
time.
The physical POS device may still resemble a cash register with a cash drawer underneath, a
conventional keyboard layout, and an integrated receipt printer that prints slips on a roll of
narrow paper. Some systems adopt a different strategy, placing a small computer alongside
the cash drawer under the counter and employing a keyboard similar to that of a computer to
input any data that is not obtained from the bar code scanners. Another design of POS device
completely does away with the keyboard and instead uses touch displays to input data. The
type of terminal you use isn't actually that crucial. The software that really powers all three of
these sorts of terminals, as well as more specialised specialty models, just serves as a front
end.
POS systems for hotels
POS systems are not just for traditional sales-based companies. Additionally, they are
essential in the hotel sector, where they are applied to manage even more complicated
situations. For instance, in a restaurant, the system must keep track of orders placed and
generate tickets for the kitchen staff so they will know what to make. Advanced systems can
go one step further and print unique tickets for each kitchen workstation so that every cook
has their own list of orders. In addition to keeping track of standard selling prices and taxes,
the system must also be able to manage tips, catering costs, and a number of other specific
charges.
Relationship Management with Customers
There is more to running a successful business than just been counting, as crucial as
accounting and inventory management are. Your chances of long-term growth could be made
or broken by how you communicate with and understand your clients. With the help of the
purchase histories that many POS systems keep track of over time, you may start to identify
your greatest consumers and learn which new products could be of interest to them. Without
the aid of a computer, it can be all too easy to ignore the consistent but unmemorable
consumers who aren't glamorous but who are still frequently the backbone of your company.

FUNCTIONS OF POS
1. Processing of payments
The majority of people imagine payment processing when they hear the term "POS system."
This is the top feature that the majority of businesses demand from a trustworthy POS
system.

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A transaction can be facilitated by a POS system in a variety of ways. Online debit card and
credit card processing is the most fundamental aspect of payment processing. Point of sale
systems can be used by e-commerce businesses to profit from online sales.
Brick-and-mortar enterprises are another option. These kinds of establishments will require
credit card readers that can take a variety of credit card payment methods. A magstripe card
reader is the most fundamental. These are the standard credit card readers that we are
accustomed to seeing in shops.
Using credit card chip scanners and near-field communication (NFC) readers for mobile
devices will also put you ahead of the game. Customers can insert their credit cards with
chips using chip readers. Customers can get increased security features thanks to these
readers.
Customers can use mobile payment apps like Apple Pay and Google Pay thanks to NFC
readers. To make a transaction, customers can take out their smartphone, open their preferred
payment app, and place it close to your NFC scanner.
It's crucial for your company to continue leading the field in payment methods. If you want to
keep up with the purchasing patterns of your clients, you must accept a variety of payment
options.

2. Management of transactions
You'll need a POS system to take into consideration a few factors of transactions. This
include maintaining an easily searchable inventory database, giving receipts, and accepting
tips from customers.
The capability of a POS to rapidly ring up consumers and send them on their way is essential.
During the checkout process, your staff members have access to a simple interface that they
may use to rapidly fulfil a customer's order.
You must be able to print receipts for every transaction or, at the absolute least, send clients
digital receipts via email. Some consumers might prefer a paper receipt, while others could be
fine with an electronic receipt or no receipt at all.
You must also provide clients the chance to leave tips for your employees if you run a
service-based firm. Customers can thank your staff for a job well done by using pre-
calculated percentages or personalised tipping options.

3. Reporting on sales
POS systems are a useful tool for monitoring your company's success. POS software can
monitor crucial business data and generate reports that assess your cash flow.

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You may run reports on contemporary POS systems to assist you in making wise business
selections. These reports can make use of sales information to help you streamline a path to
profitability and improve business operations.
You can find out which products are selling, your margins, and your monthly revenue with
the aid of reporting services. To stay ahead of your competition in today's market, a data-
driven approach to business is essential.

4. Control of inventories
Inventory management capabilities are a need if your company sells goods. You can keep
track of the goods coming in and leaving your store with the aid of POS systems.
You can set reminders in the best point-of-sale systems to be informed when it is best to
place new orders for stock. You may also set up automatic purchase orders with some
systems that automatically acquire extra inventory when the quantity of a certain product
reaches a predetermined level.
It will be necessary for you to keep an eye on your inventory levels and track it in real-time.
Knowing the exact number of products, you have coming in and going out will help you
improve your product line and concentrate on expanding your business.

5. Customer relationship administration

Building brand loyalty for your company may be done through effective customer
management and data tracking. POS systems can save data that helps you build stronger
bonds with your clients.
You might start by offering discounts to loyal consumers or by implementing a customer
loyalty programme. After having more satisfying and tailored experiences, this will motivate
clients to visit your establishment more frequently.
After a transaction, you can contact customers using your POS system. You can start sending
promotional emails to your clients once they choose to receive email marketing
communications. You can connect to your pre-existing CRM system using some POS
systems, while others let you engage with customers.

6. Management of personnel
POS systems can also assist your company in managing the interaction with its staff. You
must keep track of your employees' hours, sales commissions, and tip distribution if you have
a large staff.

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Every shift an employee works will require clocking in and out. You can arrange work
schedules through your POS system in addition to allowing employees to clock in and out on
their own software.
The distribution of staff tips as well as employee commissions for completed sales must be
tracked. Based on the unique identities stored in your system, commissions and tips can be
dispersed evenly to all of your staff.

ADVANTAGES OF POS
1. Improved Inventory Control
Using a POS makes it simple to manage your store's inventory. It enables you to keep track
of your inventory in real time and determine how many items you own overall.
If these items are already in your catalogue when you receive your inventory, all you have to
do is scan your items, enter your quantities, and the items will be added to the inventory of
your POS software. When compared to manually tracking your inventory, this saves a tonne
of time. In the end, your inventory will have fewer mistakes.
Each transaction results in a straight deduction of inventory items that were sold. This
enables you to keep track of how much of each item is currently in stock at the store.
2. Plain Billing
You can keep track of and organise all of your invoices with point-of-sale software. In a
business, managing several types of invoices requires the ability to recognise them quickly.
Depending on the software, you can find invoices for purchases, sales, repairs, rentals,
consignments, and other things.
For your accounting operations, simple invoice management is crucial. It is evidence that you
actually did sell a good or service. The invoice includes crucial details for the customer, like
the transaction value, the quantity of products sold, their description, etc.
If this follow-up were carried out manually, it would be difficult. So much so that it is
possible to sell much more quickly at the point of sale than it would be possible if everything
were done manually.

3. Fast Transactions
Faster payments are made possible by a point of sale. The technology automatically
determines the pricing once the staff chooses the items the customer wishes to purchase. The
invoice can be delivered via email or immediately printed using a receipt printer.

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Customers have the option to pay with cash, a credit card, or a debit card, depending on the
terminal and integrations. As a result, completing the transaction for the customer is quick
and simple.
The amount of time customers must wait to complete transactions is significantly reduced
with a point-of-sale.
4. Improved Customer Service
You can store the data about your clients in your system by using a POS system.
Their name, phone number, purchases, email, and other details are all possible. With
customer information, you can have a deeper understanding of your target market and
different client segments (for example your new or loyal customers).
Customers can receive promos via email from you to encourage them to come into your store
more frequently or to foster client loyalty. The technology can aid in client tracking so that
you can provide personalised promotions. You may fully comprehend your target clients and
make wiser business decisions by managing your customer information effectively.
5. Improved Client Orders
Customers might want a product that you don't currently carry in stock. You'll probably place
a new order if the product is well-liked. This is referred to as a customer order in Alice POS.
When you receive the order, you can set it aside and enter it in your POS.
The customer's file, which can include their name, phone number, and a description of the
item they want, can be linked to the order.
The software alerts the staff to remind them to get in touch with the consumer after you've
received the product. The store can keep track of and record requested orders with the help of
this function. By doing so, you can increase client satisfaction and occasionally develop into
an additional source of income.
7. A more positive customer experience
Having a point of sale can benefit you in a variety of ways, as we've seen, but it can also
improve the shopping experience for your consumers. Better client satisfaction is a result of
providing a good customer experience, and as was already discussed, quick point of sale
enables you to finish transactions more quickly. A quick point of sale is also very
advantageous for consumers, who dislike waiting.
Through cross-selling capabilities, you may also use your POS to provide similar products.
You can sell products that are linked to the one the customer is purchasing thanks to cross-
selling features. For instance, if a client purchases a fishing rod, your staff member can
provide him with lures using with his offering. Customers may be more pleased with their
purchases as a result.
Additionally, you can incorporate your store with an e-commerce platform. Customers will
be able to view and purchase your products from anywhere online. You may improve your
consumers' buying experiences by providing a variety of channels.
8. Time-Saving

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You can probably save more time in-store by using a point of sale. You can benefit from a
number of features on the system that lower the number of procedures.
The programme may assist you with inventory management, orders, purchasing, customer
management, and more, as was discussed in the preceding sections. Some features can even
carry out tasks automatically. For instance, the production of real-time reports or the bare
minimum of items to stock. These features could help your business save time.
You can use the programme to help you with these many management duties and lighten
your workload.

DISADVANTAGE OF POS
1. Costly software upgrades
The POS software market was valued at $10.4 billion in 2021, and by 2028, it is anticipated
to grow to $19.6 billion. Software-based solutions, however, generally require additional fees
from vendors for upgrades, in contrast to web-based systems that offer free updates. Vendors
are responsible for purchasing new operational licences or software for each upgrade.
Software-based payment processing systems may become costly and inconvenient as a result.
2. Reduced Convenience
Systems for processing payments that rely on software are less practical than those that use
the internet. Physical terminals can only be connected to the internet using appropriate gear.
To access inventory counts, reports, analytics, and related sales data, this hardware is
required.
3. Relationship Stability
A POS payment processing system that is web-based must be connected to the internet and
have a dependable internet service provider. You won't be able to use the POS system if there
is a disruption in the internet. That implies that you won't be able to process payments, check
the validity of clients' credit or debit cards, and more. Vendors still have to wait for an online
connection to use some functionalities, despite fail-safe mechanisms.
4. Security Risk Charges
Vendors using web-based point-of-sale systems will probably have to pay a monthly
subscription fee in order to maintain data security and digital protection methods. Over time,
this additional expense will reduce your ROI. When calculating the entire cost of a web-
based POS system, be careful to account for this monthly cost.

5. Risks to Security
Most significantly, when data breaches happen, customers who make purchases using credit
or debit cards run the danger of disclosing their personal information. POS system suppliers

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have generally implemented security measures, although there is always a chance with digital
payments.
6. Issues Resulting from Hardware
Physical POS hardware problems can be challenging and expensive to fix. Vendors must
speak with the manufacturer to troubleshoot issues as they emerge. To solve the issue, a
costly and time-consuming visit from a qualified service expert may still be necessary.

A FOREX CARD IS WHAT ?

A forex card is the most practical way to carry enough foreign cash to pay expenses
while travelling abroad. A forex card is a prepaid foreign currency card that you can load
with a specific amount of money. As a result, you can use the card to pay your bills while
travelling abroad rather than carrying cash. It is without a doubt the safer and best way to
keep foreign currency.

A prepaid card, like a debit card, or a forex card, are similar. You can choose to deposit
money in a foreign currency into your account using a forex card. You can withdraw money
from a foreign currency or use your forex card to pay bills because it is accepted everywhere.

Kinds of currency cards

Most forex cards can be divided into two categories. The first are known as single currency
cards, while the second are multi-currency cards. To better comprehend both types of cards,
let's go into more detail:

You can load one foreign currency into a single currency forex card. You can purchase the
currency card if your trip will only take you to one nation.

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As the name implies, you can load different currencies onto a multi-currency forex card.
Vendors of forex cards let you put up to 14 different currencies on the card. This is ideal for
someone who has to use numerous currencies while travelling to other nations. You do in this
case

Types of credit cards

The majority of currency cards fall into one of two categories. Single currency cards are the
first; multi-currency cards are the second. Let's be more specific so that you can understand
both types of cards:

A single currency forex card can hold one foreign currency. If your vacation just takes you to
one country, you can still buy the currency card.
A multi-currency forex card allows you to load a variety of currencies, as the name suggests.
Forex card sellers allow you to load up to 14 different currencies on the card. This is perfect
for someone who has to use several different currencies when visiting other countries. You in
this instance.

You must bear in mind that not all locations accept foreign currency cards. For instance,
some toll booths on the highways do not. If you have a single currency card and attempt to
make a payment in a different currency than the one listed on your card, there is a strong
likelihood that it will fail, and in the event that it does, you will incur expensive fees for the
transaction. The similarity between a forex card and a regular debit card is obvious.

You may easily use your currency card to pay for all of your expenses while travelling
abroad, like going shopping for clothes or going out to eat. Once you

How does a currency card operate?

When making purchases at businesses that have an electronic terminal, the Forex Card
functions exactly like a credit or debit card. The transaction amount is directly deducted from
your Forex Card balance, which is the only distinction. The card can be used to make cash
withdrawals at any ATM that accepts Visa.

1) Compared to purchasing foreign currency in cash, loading currencies onto Forex Cards
offers better exchange rates. The more affordable choice for banks is to provide Forex Cards.
You typically receive a 50 Paise markup on the exchange rate for a Forex Card as opposed to
a 2 Rupee markup when purchasing US Dollars.

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2) Foreign currency is placed onto Forex Cards at predetermined exchange rates. They are
therefore resistant to changes in currency value on the forex market. No matter how the INR-
USD exchange rate changes, if you loaded 1000 USD onto your Forex Card, that is how
much it will be worth.

3) Because they are equipped with chip and pin technology to protect the money on them,
forex cards are more secure than carrying cash. The balance on a lost or stolen Forex card can
be frozen and the card can be promptly blocked. The monies will then be transferred to the
secondary Forex Card that was issued along with the original.

4) Foreign currencies can be carried in numerous denominations on a single Forex card. For
instance, you can load up to 16 popular currencies onto Axis Bank Forex Cards (available
through Extracelomic), including Australian Dollars (AUD), Danish Krone (DKK), Euro
(EUR), Hong Kong Dollars (HKD), Japanese Yen (JPY), New Zealand Dollars (NZD),
Omani Rial (OMR), Saudi Arabian Riyals (SAR), Singapore Dollars (SGD), Swedish Krona
(SEK), Swiss Franc (CHF) (USD).

Unlike Debit and Credit Cards, which incur additional fees when used at POS terminals
abroad, Forex Cards do not. Additionally, when used abroad, debit and credit cards operate at
outrageous conversion rates and will cost you an additional 5 to 11% of the total transaction
fee.
No charge for dynamic currency conversion. Using Forex Cards abroad will not incur a
Dynamic Currency Conversion (DCC) fee because they are already loaded with the local
currency of the destination nation. However, in the case of debit and credit cards, this fee will
be applicable. DCC would increase your transaction cost by an additional 3 to 5%.

5) Unlike traveller’s checks, which are now considered an antiquated form of payment, forex
cards are widely recognized and accepted. Additionally, when travelling abroad, Forex Cards
can be used to get cash from an ATM in the area. However, it might be difficult to cash a
traveller’s check because you have to locate banks or other businesses that will do it. In some
foreign nations, even taxis accept the
7) Forex Card as payment. In fact, you can use a Forex Card to make purchases online in
other countries, such as through e-commerce websites.

Cash or a Forex Card? Or should I use my debit or credit card instead? This is the question
that nags at you before you embark on your upcoming or initial international vacation. The
solution is straightforward: to obtain the best value for your money abroad, do some research
ahead. Go online and do some research. Compare the costs, fees, features, and benefits of
every product available for your international travel.

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Traveler's checks used to be the most common method of bringing money on trips abroad.
TCs are no longer the preferred choice due to the introduction of the Forex card and the rising
use of debit and credit cards. The most crucial thing is for you to be aware of your
alternatives. You must be completely aware of your possibilities. Know the advantages and
disadvantages of each option.

So the question is, which one is better for you? How can expensive exchange rates and fees
be avoided? We have put up a pretty thorough list of every choice you have when travelling
abroad. Read on for responses to these queries in the following comparison table:
Disadvantages:

None. The best way to carry foreign currency when travelling abroad is via forex cards.

advantages of utilizing a forex card

The following are a few of the top advantages of utilizing a travel card:

Before you even begin your journey, you receive a card that is already loaded with the
foreign currency of your choice.
A Forex Card can be used to purchase a variety of well-known currencies, including USD,
GBP, CAD, EUR, AUD, SGD, and more.
reduces the amount of cash you need to bring with you when travelling overseas
can be utilized somewhere that accepts credit cards
can also be used to use international ATMs to get local currency
You may quickly recharge the card online whenever you want.

METRO CARDS

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A magnetic stripe card called the MetroCard is used to pay for transportation in the New
York City area. The New York City Subway, New York City Transit buses, and MTA buses
all accept it as a primary form of payment.
To improve the technology of the public transportation system and remove the hassle of
carrying and collecting tokens, the MetroCard was introduced in 1993. On May 3, 2003, the
MTA stopped accepting tokens in the subway, and on December 31, 2003, it did the same for
buses.
By April 2024, the MetroCard is anticipated to be completely gone. It will be replaced with
OMNY, a contactless payment system that enables users to pay for their fare by touching or
waving their cellphones, credit or debit cards, or smart cards from the MTA.
The MTA's Revenue Control, MetroCard Sales section, which is a part of the Office of the
Executive Vice President, is in charge of managing the MetroCard. Cubic Transportation
Systems, Inc. is the manufacturer of the MetroCard vending machines.

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BENEFITS OF METRO CARDS
1. Once purchased and recharged no need to stand in Q to get Tokens for
every travel. Can be recharged for ₹ 100 minimum online & ₹ 200 at
DMRC Customer Care at Stations.
2. Multiple Recharge Options available Paytm, Phonepe, DMRC Website,
DMRC Station CC via NB, Cash, UPI, Dr, Cr Card.
3. Money stored in Smartcard is valid up to 10 years. Maximum ₹ 3,000
Recharge can be done at one Time, if you have heavy use daily, or even
otherwise.
4. Discount of 10% on each travel during peak hours & additional 10% during
off peak hours (Entry in Paid Area, Before 0800 Hours, Between 1200–
1700 Hrs, After 2100 Hrs till Last Train) Monday to Saturday. This was
personally Validated in Metro Train Travel on 05–May–2022 @ 12:03 PM
between Harkesh Nagar Okhla To Rajendra Place Metro Station. ₹ 32 Fare
instead of ₹ 36 during peak hours. Full Token Fare is ₹ 40.
5. One card can be used by any family member as it is transferable.
6. DMRC Smartcard can be used to buy Bus Tickets in DTC Green, Blue,
Red,Orange Cluster Buses if Conductor has a Electronic GPS Ticket
Vending Machine. 10% Discount on Bus Tickets bought via DMRC Smart
Cards till March 2020 Lockdown. Personally Validated, on 05–May–2022,
by travelling in Orange Cluster Bus 522 between MTNL Pusa Road to
Moolchand Hospital, ₹ 15 Full Fare (No 10% Discount) Debited from
Metro Card.
7. If you decide to Extend Your Journey to Any other Station enroute then no
Penalty on Short Amount, Token Purchased. Same if you de board before at
any station.
8. The only Negative of DMRC Smart Card is if it is stolen or lost then it
cannot be blocked & possessor is the Future Enjoyer/Owner.

SMART CARD MAKES TRAVEL CHEAPER UPTO 20 PERCENT DURING OFF

PEAK HOURS

The Delhi Metro smart card used for multiple journeys in the Metro network is now more
economical for Metro commuters, despite the revision of Metro fares in weekdays (Mon-Sat).
A smart card normally carries 10% discount on every journey made however; an additional
10% discount is available with the implementation of revised fares during off peak hours,
thereby, increasing the total discount to 20% on every journey made during these hours.

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This 20% discount on Smart Cards is of great benefit to all passengers, who step out for their
miscellaneous works, which normally are not restricted to rigid timings like office, school
etc., thus, enabling them to plan their journey in the most economical time zones.

For commuters

No need to stand in lines for token and waste time unnecessarily.

With card, you can board from any station and leave on any station, but token is from
boarding station to specific station.

Special discounts for card holders.

You can recharge your card online or with the AVM machines.

For Station Authority

Authority will require less staff and less space for Ticket office.

Reduce the crowd in unpaid areas.

EG: The safest mode of transport for girls in Delhi, even at night.
Hopefully yes :)

I was in my college enjoying with friends and was busy with clicking some good pictures!
And my metro card was there in the back pocket of my jeans. ( I am a very careless and
irresponsible person.)

So, as i was resting a bit on the edge of a table, i noticed that something just went wrong in
my pocket. I had a look and took out the card, half of my metro card's piece fell on the
ground. (on this very day i recharged it with ₹200)

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I was literally into tears! And my friend’s were laughing like a drain :(

Then one of my friends came and asked me to give this broken card to the person sitting in
the cabin of your nearby metro station and you will get the same amount of money left in the
card before it got broke into two halves.

And guess what, within a week i got my money back :)

P. S... After a week, because there is a process that takes place so that you can get the same
amount of money left.

2.8] REVIEW OF LITERATURE

A number of studies have been done regarding the Plastic Card usage. Following is a few of
them:
1. This study focused on the extent of use of plastic money as a payment system in
Zimbabwe mainly confining to the Harare population. The usage of plastic money
was found to be influenced by individual factors such as knowledge, consumer
resources such as information, processing capabilities and lifestyle have an impact on
the adoption of plastic money. In terms of use of plastic money, the study concluded
that education level had a direct effect on the use of plastic money. Respondents with
degrees and diplomas constituted the highest number of respondents who used plastic
money. Also, gender had a bearing on the use of plastic money, with males
dominating the use of plastic money. With reference to benefits of using plastic
money, it is concluded that the majority of the respondents encouraged the use of
plastic money as a means of settling transactions. The study found that the use of
plastic money brings with it several benefits. Apart from withdrawing money on an
ATM or transacting on a Point of Sale (POS) in a retail market, plastic money brings
with it enhanced security, portability, 24-hour accessibility to account balances, easy
payment of monthly utility bills or transfer funds between accounts with its
convenience, safety and reliability. It is also concluded that the use of plastic money
alleviates cash shortages, especially coins which haunted the Zimbabwean retail
market. Despite the convenience safety and reliability brought by the use of plastic
money to the customers and the business community, the use of plastic money has
remained sluggish in Zimbabwe. It is concluded that high bank charges, machines
frequently out of service or offline and the inability in some cases of ATMs failing to
dispense smaller denominations such as $5 and $10 notes were cited as the main
factors hindering use of plastic money.

2. 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

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 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 phenomenon 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.

3. Khurana Sunayna 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 behaviour 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.

4. 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 employee
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.

5. Bansi Patel and Urvi Amin (2012) in their research paper “Plastic Money: Road may
Towards Cash Less Society” discussed that now days in any transaction Plastic
money becomes inevitable part of the transaction and with-it life becomes easier 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.

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 6. 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
payment 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.

7. 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.

8. Sushma Patil, 2014 Anupama Sharma (2012)in her research paper “Plastic card frauds
and the counter measures 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.

9. Mandeep Kaur and Kamal Preet 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.

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 10. 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.

11. 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

12. 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.

13. 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.

14. 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

15. 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.

16. 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

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 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)
Procedures rather than following a standardized approach.

17. Natarajan and Manohar (1993) “credit cards and Analysis”. A study has been attempt
to know that to what extent the credit cards are utilized by the cardholders and the
factors influencing the utilization of credit cards. The study is confined to start to
cards issued by the Canara Bank. A random sampling technique is used to collect the
data. Ten components i,e numbers of purchases , shop, percentage of purchases, place,
frequency, type of product, type of services, cash withdrawal facilities add-on
facility , insurance schemes are identified and used for the measurement. Chi square
test reveals that sex, age, educational qualification of card holders has no relationship
with utilization of can card while occupation, income, employment status of spouse,
mode of getting card has relationship with utilization of can card

18. .Vora and Gidwani (1993), “Plastic at a premium” show the usage facilities and
varieties of cards. The research shows that credit card is extremely useful to those
people who use it as to increase there purchasing power through the plastic card.

Different cards provide the different packages to attract the customers like tele
ticketing, discounts, insurance coverage, and provide reward points etc. According to
review of literature33 author, the card holder market has a potential to grow 7 million,
if all tax paying citizens are taken into account but this manful efforts at upgrading
services can only have a limited impact as long as the Indian customer remains credit
shy for this, they have to change their spending habits and keep there card active so
that a peace of plastic becomes a premium card in an effective way.

19. Nash and Sinky(1997), On competition, rescue and hidden assert in the market for
bank credit card, show that the market for the credit cards has been the subject of reset
attention and controversy because of “High” profit earned on credit cards an
substantial premiums on the resale of credit card receival. This paper estimates risk
return profile for credit card banks and explores the role of intangible assets and
determining resale premiums on credit card receivable. In addition, the effect on
resale market of securitization and opportunity cost of occurring new accounts are
analyzed. Using alternative measures of risk and alternative control groups, authors
find, for the year 1989-1995, that the credit card banks earned significantly higher
return on assets but that these returns where associated with greater risk taking.

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 20. Black and Morgan(1998), “Risk and Democratization of credit cards”. Research paper
show the dramatic raise in credit card charge-offs in the midst of a vigorous expansion
suggest that bank card borrowers have become inherently riskier this paper
investigates how the mix of credit card borrowers has changed in recent years, and
how those changes effect delinquency risk. The card holders seem riskier along
several dimensions. They tend to earn less. And as result, they owe relative too
income. This rise in debt burden almost certainly contributed to the rise in charge-
offs, sems debt burdens are key determinant of delinquency risk. Cardholders are also
more likely to work at relatively unskilled blue-collar jobs. This occupation shift may
also have contributed to the raise in charge-offs, since delinquency rates are higher in
those occupations, perhaps income is more cyclical

21.Bhawna Mukaria (2018) conducted research on the development and difficulties of plastic
money. The study is analytical and based on secondary data. The history and future of plastic
money are the main topics of this essay. According to the report, individuals nowadays prefer
using debit or credit cards to pay for things rather than cash. The prevalence of plastic money
rose. The banking industry is undergoing significant transformation as a result of significant
societal and technological breakthroughs. There are more sophisticated technologies that can
permit cashless transactions on the market. The apparent drawbacks, including the
requirement for significant IT investment by multiple service providers, security issues, a
lack of technology literacy, and Indians' traditional mindset of favouring the usage of
physical money, appear to outweigh the potential benefits.
22.Mahima Rana (2018) conducted research on plastic money trends and problems in India.
This research study's goal is to discover the advantages and risks associated with using credit
and debit cards in India today. The study makes an effort to identify the issues related to
plastic money. The study is supported by secondary data and is based on literature. The study
found that there is no denying the advantages of plastic money and that abandoning paper
money is crucial for the modern world to advance.
23.Deepak and Reena Hooda Dhaka (2017). (2017). India is developing a strong
infrastructure and a more networked, demonetized economy. One of the community's basic
needs will be plastic money. A descriptive study helped with a number of security challenges
and methods for making money trustworthy and safe. There are numerous security concerns
with using plastic money. Cash cannot be completely eliminated in a nation with as many
traditions as India, nor can one dispute its slow expansion. plastic currency Plastic money is a
vital demand of the expanding economy and global business, in addition to providing a
sizable market for the producers. Even if it is widely acknowledged, there are still certain
issues, thus the user must exercise extreme caution when dealing with and making purchases
using cards. Customers close to home should receive the necessary and free basic training
offered to cards. The main motto of such training may be to train the cardholders about the
precautions to be taken by them to keep their cards and money safe from the fraudsters or
skimmers.

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CHAPTER-3
COMPANIES PROFILE

3.1] TECHNOLOGY AND INFRASTRUCTURE 

One of the most important features that Plastic Money offers is the technology associated
with this business. Credit card businesses rely on very reliable and secure technology and
demands very Strong connectivity backbone. Although a third world country, with lot of
insecurities and almost no infrastructure, Pakistan has no exception when it comes to credit
card business.
There is approximately 3000 Point of Sale Terminals (POST) present on merchant's sites
connected with bank host system. Inter-city connectivity is accomplished through X.25
networks. Perhaps, it is the most important time in the history of Pakistan as the parameters
of its Infrastructures are coming into existence. There is an immense need of reliable wide
area connectivity and this market is so huge and lucrative that it can accommodate many
more industry giant.

3.2] TECHNOLOGY RELATED TO PLASTIC MONEY

Plastic card is a plate with standard dimensions (85.6mm x 53.9mm x 0.76mm) produced
from special, mechanic and thermo-resistant type of plastic used to store information.
MAGNETIC STRIP and MICRO CHIP – As electronic data media, the cards are divided into
magnetic strip cards and integrated chip (microprocessor) cards. The first ones are called
magnetic cards, the other ones are smart cards, or chip cards.
Benefits of Chip card
-Higher Memory/ Storage Capacity
-More Secured
-More Reliable
-Biometric Security Information can be stored
-Less vulnerable to fraud
-PIN is not required

3.3] CONVENIENCE OF PLASTIC MONEY

Peter, a young MBA graduate joins a large software firm as a Business Development
Executive. His job involves frequent travelling and meeting with leads and clients to develop

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business for the organization. This requires him to spend a lot on travel, food, stay, etc and
keep track of his expenses. Since he may require a lot of cash for inter-city travel which can
span a few days or weeks he preferred to use his debit card or credit cards. For instance, he
could use his card to pay for hotel stays where cards were commonly accepted. Similarly, for
travel he could book tickets online, while for food he had to rely on cash. However, with his
debit card he could withdraw cash whenever required which made his life easier. Even if he
forgets to carry cash, he can use his debit card to withdraw funds whether required.

Advantages of Plastic Money

There are several advantages of plastic money as seen in the above illustration. The
advantages include
 Eliminates the need for carrying huge cash: This eliminates the need for carrying huge
load of cash which is risky and inconvenient too.
 Risk of Loss or Theft minimized: In case of cash there is a high risk of losing cash
and a chance of cash getting stolen. However, in case of debit/credit card you can
report the matter to the bank and block the card to avoid misuse.
 Anytime/Anywhere Access: Using cards you have the unique advantage and
convenience of using it anywhere in the country or even abroad.
 Credit Facility: In case of credit card, you have the option of buying on credit or
paying later. Although the charges are high, it helps you in case of emergencies and
contingencies.
 Online Payments: You can use cards for online payments, fund transfers and various
other transactions.
These are the key benefits which I can easily remember, but there could be various other
good features too that are specific to certain cards.
Some of The Drawbacks or Risk Related to Cards are-
1. Non-Acceptance at Small Retail Outlets
Unless you are a person who shops only in supermarkets and hypermarkets you will be
forced to use cash
2. Cannot be used for all daily needs
You cannot pay your milkman, servant, paper Wala (newspaper guy), etc. by card.
3. Loss & Misuse
Once a card is lost you have to immediately report it and get the card blocked to avoid
misuse. Sometimes when you are not aware that you lost the care. The chances of misuse is
higher.
4. Low Value Transactions

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As discussed above already there are cases where small and medium sized retailers don’t
accept cards for low value transactions (say less than Rs.200 or other criteria). You may have
noticed this even in case of outlets like petrol bunks or restaurants.

5. Service Charges
In some cases, the outlets charge additional service charges for cards. So, this can be another
burden on your pocket.

6. Damage to Card
Sometimes the card’s magnetic strip gets damaged or scratches or cuts can render the card
unusable. So, keeping it safe and secure is very important.
7. Carrying or Keeping the Card
Keeping the card and cash in the wallet together is like “inviting trouble”. This is the way
everyone (including me) used to carry cash and cards. But this means once you lose your
wallet you lose everything. So here the card doesn’t come to your rescue after losing cash.
The best practice is to keep cash and cards separately so that if you lose one you have the
other to bank upon. By the way, nowadays I don’t carry cards in my wallet. It’s mostly in the
bag or sometimes in a different pocket. You can try this or other methods but ensure that you
don’t keep everything in one place and lose it all. Now that we have a clear idea of some of
the drawbacks of credit and debit cards lets also look at some key points on how to strike a
balance between use of cash, cards and control your spending habits.
8. Spending Habits & Other Tips
Whether you use cash or cards, having a control on your spending is very important. A few
pointers would be worth noting.
9. Impulsive Purchases
Don’t yield to impulsive purchases. Try to see what real benefit or value are you getting from
the purchase. If you can’t live without it, you can postpone or keep the spending on hold.
10. Peer Pressure
It’s okay to spend some money on entertainment, outing, fine dining, etc. once in a while (say
once or twice a month). But if you do it every week on instance of your friend, colleague, etc.
you will have not savings every month end. Your future financial planning is out of question
if you live from pay cheque to pay cheque. So, it’s time to become smart and avoid
unnecessary wasteful expenditure. Sometimes you may have to attend a few parties,
dinner/lunch activities, etc. but prioritize and attend only the ones which are important and
add value to you. For others you can say sorry and avoid or try to finish it over a simple
coffee.
11. Overuse of Cards

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I find that people who are finding cards as a convenient medium try to use it everywhere –
left, right and centre. Further, they have 3-4 cards which are used one after the other at
different places. I would advise them to have fewer transactions so that it is easier to keep a
check on the transactions every month and easier to pay the bill as well.
12. Special Offers, Discounts
Some people have this fancy and think that they are smart when they get special discounts on
cards at retail outlets. Ha ha ha ha…… What a joke! Do you think the card company and the
retail chains are so kind enough to serve you at a discount. They want you to loosen your
purse and spend more so that they can laugh all the way to their bank.
13. Debt Trap
Overuse of credit cards and rolling over your balance is the shortest route to bankruptcy.
Remember that you have to pay your credit card in full. If you know what this means in letter
and spirit you will be careful while spending on your credit card. The interest rate on credit
card roll over is as high as 3-4% every month which translates to 36%-48% every year.
14. Cash Management (Running to ATM often)
Most people particularly those who started their careers in the last 3-4 years have been more
used to cards than cash. They don’t carry much cash and don’t keep cash at home too. This is
absolutely disastrous. When someone at home has a medical emergency or has to buy
groceries or do some major repairs cash in hand is absolutely necessary. I’ve seen people who
often run to ATM when they want to purchase some groceries. Surprisingly some people
don’t even keep Rs.1000 at home when they actually earn more than Rs.50,000 per month.
This is just over dependence on cards, which is foolish, because you still need cash for most
of your expenses.
We have made a comparison which provides a detailed overview of what debit and credit
cards are, their types, associated fees, and pros and cons.

3.4] CREDIT CARD & DEBIT CARD COMPARISON

Credit Card Debit Card

About Credit cards are lines of
credit. When you use a credit
card, the issuer puts money
toward the transaction. This is
a loan you are expected to
pay back in full (usually
within 30 days), unless you
want to be charged interest.
Connected To Not required to be connected
to a checking account.
Monthly Bills Yes
Application Process Somewhat difficult,
Any time you use a debit card
to buy something, money is
deducted from your account.
With a debit card, you can
really only spend the money
you have available to you.
Checking or Savings Account
No
Easy, with basically no

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 depending on one's credit barrier to receiving a debit
score and other details. card.
Spending Limit The credit limit set by the However, much is in the bank
credit issuer. Limits increase account connected to the
or stay the same over time as card.
a borrower's creditworthiness
changes.
Spending Limit The credit limit set by the However, much is in the bank
credit issuer. Limits increase account connected to the
or stay the same over time as card.
a borrower's creditworthiness
changes.
Interest Charged If a credit card bill is not paid No interest is charged
in full, interest is charged on because no money is
outstanding balance. The borrowed.
interest rate is usually very
high.
Security Credit cards in the U.S. are A PIN makes them secure so
not very secure in and of long as no one steals the card
themselves because many still number and PIN, and as long
use dated card security as you don't lose the card
technology. However, itself. If the card/info is
consumers are not held liable stolen, debit cards are
for this poor security. insecure.
Fraud Liability Low. Rarely held liable for High. If someone steals your
fraudulent activity. If you are, card and makes purchases,
you are only held liable for a that money is removed from
maximum of fixed amount. your bank account.
Investigating 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 usage Does not affect credit history.
and payment can 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 to overdraw Possible to overdraw amount
amount over the maximum over the account limit.
credit line with a fee.
Pin In the U.S., this is Usually
uncommon, but PINs are
being phased in.

Debit Card

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Allow you to make purchases using the amount in your current or savings account.

No internet charges applicable

Money deducted /used from your current /savings account

No impact of transactions made on the credit score

No specific eligibility criteria to be fulfilled

You can spend as much amount as it is available in your account

Not many options to choose from

Provide minimal security from theft or loss of the card: safe transactions.

No additional benefits

No hidden expenses

Allowed, without any additional charges.

Credit Card

Allows you to make purchases by borrowing.

Interest charges applicable on late repayment of billed amount

Money borrowed from bank/credit card using company

Timely repayments work effectively on the credit score

You must meet some specific eligibility conditions of income, age etc.

You can spend only as much amount as it granted to you in the form of credit limit by the
bank

One card for every need: a wide variety of options available depending upon your spending
needs

Provide complete protections against loss or theft: safe transactions

Cashbacks, reward points, voucher, etc. to be redeemed on future purchases

A few hidden expenses such as annual fee, cash withdrawal expenses, fee on foreign
transactions, etc.

Allowed, with additional charges

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3.5] PRESENT SCENARIO OF PLASTIC CARDS
Now a days a modern customers and client cannot think of banking without the facility of
plastic cards. Today credit and debit cards have largely replaced cheques as alternatives to
cash. Both are reasonably secured compared to cash and are widely accepted. User
friendliness and feasibility are the main features of plastic money that have made plastic
money popular not only in India but also all over the world. 
 Credit cards usage for travel bookings Consumers started to make their bookings
using cards and it has become a lifestyle choice for most urban consumers. 
 Electronic transactions grew strongly with the help of Reserve Bank of India (RBI)
The consumers who were using online shopping for a long period switched to net
banking facilities over cash on delivery as this was more convenient and faster. This
included online shopping for groceries, especially in metropolitan cities such as
Bangalore, Hyderabad, Mumbai, Delhi, Chennai and Kolkata. 
 Mobile banking applications become common for all banks Use of smart phones
became one of the most common forms of banking. As to provide consumers with a
convenient and secure banking facility, almost every leading bank in the country,
private or public, launched their mobile applications for all the leading Smartphone
operating system platforms i.e., Android, iOS and Windows. 
 Security: Lost cash can be used by anyone. If you lose a credit or debit card, you can
call 24.7 helpline number and report to the bank and thus get protected from
unauthorized use of your card. However, different banks may have different liability
policies, consult your bank if they offer any liability waiver.
 Universal Acceptance: Most credit and debit cards are accepted worldwide. Try that
with a personal check! If you need cash, you can make withdrawals from ATMs or
banks around the world that accept your credit or debit card. 
 Emergency Protection: A credit card will get you through almost any emergency you
can think of. It’s like a security blanket that will cover you for e.g., airline insurance,
life insurance etc. depending upon the credit card. 
 Convenience: Credit and debit cards offer no-hassle shopping – no cash, no checks,
no additional identification. 
 Simplified Record Keeping: Credit and debit cards give you a record of all your
transactions for the month, so keeping track of where your money goes is easier. 
 Hygienic: Paper money is dirty and unhygienic as it travels from one person to
another whereas on the other hand plastic money usually remains with 2.3 individuals
maximum therefore it is clean and hygienic. 
 Environment Friendly: One of the major causes of deforestation is paper and this is
where plastic money is better than paper money as it reduces deforestation. 
 Value-Added Benefits: Many credit cards offer rebates, cash refunds, contributions to
your favourite charity, or other special value-added benefits that you won’t get with
paying by cash.

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3.6] CHALLENGES FACED
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 convenience.
Technology intensive delivery channels like net banking, mobile banking, etc have created a
win-win situation by extending great convenience & 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. Overall, there is currently a lot of innovation
taking place in the following areas in India, which will encourage development of a cashless
society and help the market move towards the idea of new payment methods.
Back-up plan in case of Loss or Damage to Card
In case of loss or damage to card (making it unusable) you have to apply for issue of a new
card. The new card can take a week or even more to reach you. Till then you need to manage
with cash or rely on other debit cards. So, two things to do to have a sound back up plan. One
is to have sufficient cash at home to handle 1-2 months expenses. Two is to have two or more
debit cards (separate bank accounts) so that you are not dependent on one source alone. I
think talking about cash or cards may sound like a trivial subject, but remember that these
precautions discussed above will help you during emergencies and help avoid or eliminate
many problems that people face-not because of plastic money but due to lack of discipline
and poor organization skills. So, use cash and plastic money wisely to have complete peace
of mind.

3.7] FUTURE PROSPECTS

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 smartphones,
Internet penetration and e-commerce is complementing these, card payment volumes have
been growing in excess of 25 per cent y-o-y. 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

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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 Worldline India Card Payment Report 2014-15, the credit
card base grew at 9.8 per cent in the past year. Worldline 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.

3.8] 5 SIGNS PLASTIC MONEY IS FUTURE

One of the most momentous leaps that shook the world was the invention of plastic money
(credit cards, debit cards, smart cards, etc). Thanks to these, you do not have to worry about
cash or carrying cash anymore because these cards serve as your cash accessing mini pocket
cards. The concept of plastic money is a huge success because it has many benefits over
paper money.
The first and most important benefit being, easy access and convenience. Then there’s the
safety factor. A person would hesitate to roam around with a bag full of paper notes but a
credit card is not an issue. In fact, a credit card is not even visible or obvious to the other
person whereas a bag full of money can be seen from a distance, which may alert thieves as
well. Seeing the rapid growth of plastic money all over the years, many currency experts
believe that plastic money is the future. Without much ado, let’s have a look at why they
think so.
 More Convenient Than Paper Currency
It’s not easy to have access to paper cash all the time but plastic money is easily reachable
because it removes the physical of money. Money is required to deal with everyday expenses
such as food, travel, purchases etc., but with credit cards, you do not really need actual cash
to make these transactions as everything happens digitally. In the past when there was no
concept of plastic money, we had to physically be at places to make purchases, pay bills etc.
However, gone are those days because today, we can handle such expenses no matter where
we are. We can make online purchases by simply entering our credit card number when asked
by a website and even withdraw cash from ATMs. Plastic money is more convenient than
paper money because: It lets us make all kind of purchases online from grocery to movie
tickets to hotel bookings. It keeps a record of all our transactions that can be accessed
anything. Can be used 24×7.

● Works On a Global Scale

People who travel abroad don’t have to deal with carrying a lot of cash with them thanks to
the invention of plastic money. This removes the need to convert currency. You can use
plastic money everywhere as cards as accepted internationally.

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 ● Easy Tracking
Tracking paper money is almost impossible but in case of plastic money, it’s a piece of cake.
All the transactions done with plastic money go through banks and electronic media. This
way you have a record of all the transactions that can be accessed easily. This reduces the risk
of frauds as every transaction is being monitored. Even if a hacker steals or tries to make an
attempt, the system can pinpoint the location with the help of advanced tools.
 Safer
Paper money can be exploited, torn, stolen and faded but no such problems are associated
with the use of plastic money. Credit cards and debit cards are made of high-quality material
that does not bend or break easily. So, it is a better approach to keep plastic money with you
rather than paper currency. Another advantage of plastic money is that even if your card gets
stolen or gets lost, the stealer won’t be able to withdraw cash unless they know your 4 - digit
pin number. In such a situation, you can call your bank and ask them to block all transactions
from your card so that no one can withdraw your money. It should be mentioned that we lose
millions of cash everywhere due to spoiled notes, which can affect the economy and such
problem is solved when we use cards that can be swiped through card readers without any
trouble. These points prove that plastic money is safer to use than paper money.
 Credit Facility
Credit cards offer the benefit of making a purchase without actually having money in your
account. When you buy on a credit card, you are given sufficient time to pay back for it. This
is another advantage of plastic money over paper currency and a majority of people are
actually doing it to manage their expenses. This is a great way to deal with emergency
situations when you have no money with you.

PRACTICAL BENEFITS OF PLASTIC MONEY

1.Plastic money lasts anywhere from two to five times longer than paper money and performs
better in vending machines. And, unlike paper currency, plastic money doesn't shed tiny bits
of ink and dust that can disable ATMs by confusing their optical readers.
2.Polymer bills are much more complicated to counterfeit. They include a number of security
features including difficult-to-copy transparent windows, hidden numbers, metallic
holograms, and text printed in a minuscule font.
3.Plastic money also stays cleaner and becomes less grubby than paper money, because the
non-porous surface doesn't absorb perspiration, body oils, or liquids. In fact, the plastic
money is virtually waterproof, so the bills won't be ruined if they are left in a pocket by
mistake and end up in the washing machine. Actually, plastic money can take a lot of abuse.
You can bend and twist plastic currency without damaging it.

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4.The new plastic money is also less likely to spread disease because it's harder for bacteria to
cling to the slick, non-absorbent surface.
5.Canada will also pay less for its new plastic money. While the plastic bank notes cost more
to print than their paper equivalents, their longer life means Canada will end up printing far
fewer bills and save a substantial amount of, well, money in the long run.
ENVIRONMENTAL BENEFITS
1.All in all, it looks like plastic money is good for the government and good for consumers.
Even the environment could end up cashing in on the trend toward plastic currency. It turns
out plastic money can be recycled and used to manufacture other plastic products such as
compost bins and plumbing fixtures.
2.A life-cycle assessment commissioned by the Bank of Canada determined that over their
entire life cycle, the polymer bills are responsible for 32% fewer greenhouse gas emissions,
and 30% reduction in energy need.
3.Yet, the benefits of recycling are not exclusive to plastic money. For the past several years,
various companies have been recycling worn-out paper currency and using the recycled
material in products ranging from pencils and coffee mugs to, ironically and appropriately,
piggy banks.

Pros and Cons of Using Debit vs. Credit Cards

Most people carry and use both credit and debit cards because both types of cards have their
unique advantages.
1. Acceptance by Merchants - The vast majority of retailers accept both credit and debit
cards, and customers pay the same price irrespective of the payment method they
choose. But merchants pay a fee — called interchange fees — to payment processors
like Visa and MasterCard for every credit or debit card transaction. This is usually flat
fee, plus a percentage of the total transaction. The fees charged for a debit card are
much lower than those charged for a credit card.

2. Security and card Theft - Debit cards, which make use of a PIN, are more secure cards
in and of themselves. However, credit cards are much more secure for consumers in a
practical sense when fraud occurs. If someone steals your debit card information, the
thief has direct and immediate access to the funds available in the bank account
connected to your card. As it takes banks time to investigate fraud, you will have little
immediate recourse. Worse, if you do not notice and report the fraud soon enough
(within two days), you may be on your own loss. This can make paying bills that you
would have otherwise had the money for difficult, if not impossible. In contrast, if
your credit card information is stolen, the thief takes out money from your credit
issuer. This is money that you will very rarely be held responsible for if you make a
concerted effort to report suspicious account activity as soon as you are aware of it.

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 3. Risk of Overspending - With debit cards, you can usually ask your bank to offer
overdraft protection or reject transactions when there are insufficient funds in the
account. There is some risk of overdraft fees but you generally cannot spend a lot
more money than you have if you use a debit card. On the other hand, credit card debt
can become a nightmare very quickly if you fail to pay your bills on time. Most
monthly credit card bills list two amounts — minimum payment due and monthly
balance. If you only make the minimum payments that are due, interest starts to
accrue on the remaining balance at staggeringly high rates of 12 to 24%. And since
this interest is compounded, it is very easy to get mired in a lot of debt. Financial
advisors are unanimous in recommending that consumers repay their credit card debt
first, before other loans like student loans or home equity loans.

4. Credit History - It is important to build a good credit history for yourself over time. A
good credit score ensures you pay lower interest on mortgages and car loans, and
lower insurance premiums. Landlords and potential employers also run credit checks.
Debit cards do not affect credit history at all. But credit cards can play an important
role in building credit history. Owning a credit card and paying off credit card bills in
full every month makes a positive impact on your credit history. Conversely, owning
a credit card but falling behind on payments negatively impacts your credit score.

5. Rewards and Cashback - For years credit card issuers have been enticing customers to
sign up by offering rewards programs for using the card. The more you spend, the
more money card issuers make in transaction fees and, possibly, in late payments and
interest if you fall behind in repayment. The most common credit card rewards are
airline miles, "points" that can be redeemed for cash or discounts at certain retailers,
and cash back. A majority of the credit cards that offer rewards also require an annual
fee for the use of the card. Banks have also started offering some rewards for the use
of debit cards but these are not as strong as credit card reward programs because
banks get lower fees per transaction on debit card use. Examples of debit card rewards
include fee waiver on checking accounts if the debit card is used three times in a
month, and revolving discounts at certain merchant locations.

6. Interest and Fees - Few debit cards charge monthly or annual fees, nor do they charge
interest. Some credit cards charge an annual fee (which may or may not be worth it,
depending on the card's rewards), and all credit cards charge late fees and interest on
debts that are not repaid on time. The main fee consumers have to be aware of when it
comes to debit cards is the overdraft fee or charge, which may be as steep as $30 or
more per overdrawn transaction. An account becomes overdrawn when you make a
charge that exceeds your available balance. For example, if you have Rs 1000 in your
account, but spend Rs 1200, you have exceeded your account balance by Rs 200 and
may be charged an overdraft fee by the bank. If you have not opted in to an overdraft
coverage program, your card will simply be declined. Most banks offer overdraft
protection and coverage services for a price. A few banks, support free overdraft

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 protection by linking up multiple accounts so an overdrawn account will have access
to "backup" funds. Not all fees are bad, perhaps. For example, debit and credit cards
often charge small fees for transactions carried out overseas, but these fees or rates are
often much lower than currency conversion rates you can get at a traveller’s exchange
using physical money. (And some credit cards, in particular, have no foreign
transaction fees at all.) Of the two types of cards, debit cards are more likely not to
work overseas, so confirming their functionality before traveling with them is a must.

7. Churning - In recent years, a personal finance subculture has risen out of credit card
rewards — specifically out of how to take the most extreme advantage of card signup
bonuses and card rewards programs. This process, which usually involves signing up
for lots of different credit cards (and sometimes later closing them), is usually known
as "churning." While not exactly widely known, churning has become popular enough
over time to have an active subreddit community and garner the attention of financial
advice sites and the credit card companies themselves. Some who are especially
careful may benefit from their efforts, but long-term returns may not go as planned,
and churning — particularly any and all opening and closing of accounts — can
negatively affect your credit score. Churning can be an especially bad idea if you are
looking to take out a mortgage any time soon.

8. Payments - Because a debit card is connected to a bank account that it withdraws

funds from, as needed, there are no further payment processes to consider. Credit
cards, however, are loans that must either be repaid in full by a certain date or have a
minimum amount, as set by the card company, paid onto them at the end of each
billing cycle (with the knowledge that interest will be charged on any balance carried
over into the next month — the loan left unpaid). Most credit cards operate on a 30-
day billing cycle. In the past, some credit cards operated on different billing cycles
that made due dates fall on different days of the month. By law, credit card bill due
dates must fall on the same day each month, and no late fees can be charged for
payments that are "missed" due to the effects of holidays or weekends on the banking
system.

Three central issues that emerged from the pilot study survey show the
accompanying.
• The use, perception, and adoption of cards have been influenced by financial
institutions, but there is still much work to be done. Companies should put less emphasis
on profitability and focus more on finding their ideal customers. If the focus was on
meeting the needs of the users, this would alter the patterns of adoption for plastic money
and cards, and the payment instruments would have reached a wider segment of society.

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 • Prior to these electronic payment methods, there was no incentive to use them other than
a few discounts and loyalty rewards, which were largely insufficient to broaden the
country's user base.
• The manner in which electronic payments are made is influenced by cards user
preferences may not be revealed by studying just one aspect.

CHAPTER – 4
RESEARCH METHODOLOGY
4.1] 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 design also. After the descriptive analysis the
Regression Coefficients were worked out by using SPSS to see the causative relationship
between the various factors influencing credit card usage. Significant factors were identified
and suggestions given for increasing the Plastic Card usage. 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.

4.2] Objectives:
1) To know the perception of people towards plastic money.
2) To find out the importance of plastic money in the present era.
3) To find out the usefulness and popularity of plastic money.
4) To analyse the relationship between plastic money and educational level of users of plastic
money.
5) To understand the impact of plastic money in the economy.
6) To show the result of plastic cash on day-to-day basis with a primary study of an unbiased
sample.
7) To study the satisfaction level of consumers towards plastic money.

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4.3] Hypothesis:
1) Ho: There’s a positive perception of people towards plastic money.
H(a): There’s a negative perception of people towards plastic money.
2) Ho: There’s a great amount of relationship between plastic money and educational level of
users of plastic money.
H(b): There’s no relationship between plastic money and educational level of users of
plastic money.

3) Ho: Plastic money has a good satisfaction level of consumers.

H(c): Plastic money does not had a good satisfaction level of consumers.
According to information provided by the Reserve Bank of India, spending on credit cards
increased by 30% year over year during the April through June 2011–12 quarter to Rs 22,128
crore from Rs 16,948 crore the previous year (RBI). The amount spent using debit or ATM
cards climbed by 45% year over year during the April–June quarter, from Rs 8,065 crore to
Rs 11,691 crore.
Anand Selvakesari, country business manager, global consumer group, Citibank, said: "It's a
logical evolution for a country like India, which is growing rapidly and more people are
utilising banking facilities." However, there is still a lot of untapped potential because India
has a lower penetration of plastic money than nations like the US and China.
However, there was a little decline in the overall number of credit cards in the nation.
as the total number of outstanding credit cards decreased by 6% to 1.8 crore at the end of
June 2011 from 1.9 crore at the end of June 2010. Contrarily, from 19.0 crore at the end of
June 2010 to 24.0 crore at the end of June 2011, the number of debit cards increased by 25%.
According to M. Narendra, chairman of Indian Overseas Bank, "the increasing number of
point-of-sale terminals in the nation has also aided in expanding payment using credit and
debit cards."
However, because of the unpredictability of the global economy, bankers are likely to be
careful when choosing their credit card clients. "We'll keep growing our card base in India,
but we'll pick our clients carefully.
Especially in a state like Mumbai
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.
After the descriptive analysis the Regression Coefficients were worked out by using SPSS to
see the causative relationship between the various factors influencing credit card usage.
Significant factors were identified and suggestions given for increasing the Plastic Card
usage.

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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.

4.4] Scope of study:

The paper money has small life cycle and can’t be recycled as compared to plastic money
which has long life cycle and can be recycled for further utilization. Due to this problem
faced with the paper note the invention of plastic money has been introduced. Plastic money
is secured and cannot be copied. Australia is the first country to have all polymer barometer,
the rest of the world is starting to follow the lead. 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. The plastic money makes the
society a cashless society. As the usage of plastic cards increases, the number of suppliers are
also increasing which offers the different features. Some suppliers are charging hidden
charges and high interest rate. The agent who convinces the people to get the credit card by
offering wonderful packages, in reality, agent hides some important facts which will be
disclosed only after receiving the bill. It was necessary to preconceive, in the most
fundamental sense, the nature of bank, money and plastic money; even beyond that to the
essential elements of each and how they might change in a microelectronic environment.
Several conclusions emerged: Firstly, money had become nothing guaranteed, alphanumeric
data recorded in value less 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 lighted above will help you during emergencies and help avoid or eliminate many
problems that people face-not because of plastic money but due to lack of discipline and poor
organization skills. So, use cash and plastic money wisely to have complete peace of mind.

4.5] Limitation of study:

The study involves primary data collected through a questionnaire; hence personal prejudice
might have kept in regarding sampling.

4.6] Methodology: Data Collection

 Primary data – Primary data was collected from persons known to researcher. A
questionnaire was used as a data collection instrument because questionnaires are
extremely flexible and could be used to gather information from a large or small
number of people. Hence a selective convenience sampling was indulged in
 Secondary data – Secondary data has been collected through various sources such
as websites, books and articles.

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4.7] Sampling:
 Sample Unit - Individuals who are salaried people and non-salaried people
including male & female and students of were chosen as sample.
 Sample Size - Total Sample size was of 50
 Sampling Technique - The sampling method used was Non probability
Convenience sampling because the respondents chosen for filling the questionnaire
were chosen conveniently from the geographical area of Mumbai, Maharashtra.
 Tools Of Analysis - The data collected was analysed using the mathematical tools
to represent the data.

CHAPTER– 5
DATA ANALYSIS
ANALYSIS OF DATA & FINDING
The data was collected by 50 respondents by means of questionnaire and then was
analysed on the basis of their response. Out of 50, 33 responses have been mentioned
here. The findings of analyses are as follows

1) AGE

Fig: 1. Age group

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As you can see in the above chart, Age group has been asked to analyse the number of
consumers who uses the most of plastic money. According to responses, age group between
18 to 30 are the frequent users of plastic money. Then comes the age group between 30 to 50
who uses plastic money.

2) CURRENT PROFESSION

Fig: 2. Profession of consumers

As you can see in the above chart, current profession has been asked of consumers.
According to responses Employed person are the frequent users of plastic money, then comes
the students. Last but not least Self-employed person also use plastic money. As there’s no
response from housewife people which means they have no opt using plastic money

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 3) GENDER

Fig: 3. Gender of consumers

As you can see in the above chart, gender of consumers has been asked to analyse & keep a
track of users. As you can see clearly both the genders are the not equal users of plastic
money. Many times it happens female’s prefer cash over plastic money. But the survey has
changed the conclusion over this thought.

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4) Do you think is the use of Plastic money, the safest mode of transaction?

Fig: 4. Use of Plastic money is safest mode of transaction

As you can see in the above chart, the analyses were done to know whether consumers find
plastic money the safest mode of transaction or not. And the greatest number of people have
agreed with the question I.e. Plastic money is the safest mode of transaction. People have
been even strongly agreed with this. There are few who disagrees with this. The reason
behind this might be the fraud or hacking which happens with plastic money. Or they might
be rare users of plastic money.

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5) While travelling, plastic card is the preferred way of payment?

Fig: 5. While travelling, plastic card is the preferred way of payment.

As you can see in the above chart, analyses have been done to know whether consumers find
plastic money, the preferred mode of payment or not. And as you can see the responses of
consumers, most of them had strongly agreed with the statement. There are even consumers
who had agreed with the statement. There are just few who had disagreed with the statement.
Reason might be they want to opt using plastic money while travelling.

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 6) According to you, is the use of Plastic card beneficial?

Fig: 6. Use of Plastic Card is beneficial

As you can see in the above given chart, analyses have been done to know whether
consumers find Plastic card beneficial or not. As per the responses, most people had found it
beneficial and had agreed. There are even few who had strongly agreed with it. There are few
who has disagreed with it still most maximum people have agreed It states that people have
been using plastic card at various places and have found it beneficial in way of payment.

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7) According to you, the transaction through plastic money has become convenient?

Fig: 7. Transaction through Plastic money has become convenient

As you can see in the above given pie, analyses have been done to check whether consumers
are finding transaction convenient through plastic or not. As per the responses, most
consumers had agreed with it. They have found transaction convenient through plastic
money. Even consumers had strongly agreed with it. Which clearly means that consumers do
the transaction on regular basis. There's are consumer who had disagreed.

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8)Plastic Card leads to Over Consumption and Spending.

Fig: 8. Plastic card leads to over consumption and spending

As you can see in the above given chart, analyses have been done to know whether ‘does
plastic cards may lead to over consumption or spending’. And as per the response, consumers
found plastic cards can lead to over consumption and spending. As you can see most of the
consumers had agreed with it and even strongly agreed. There are 33.3% who had disagreed.
The reason might be, they know and they have kept their managing level as a top prior while
transacting through plastic card.

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9) Misuse of plastic cards is the reason you don’t opt for plastic money?

Fig: 9. Misuse of Plastic card is the reason consumers don’t opt for plastic money.

As you can see in the above given chart, analyses have been done to check whether the
consumers don’t opt for plastic money because the misuse of plastic money is done. As per
the responses most of the consumers had strongly disagreed with it even some of the
consumers had agreed with it. There are some consumers who had strongly agreed with it
There are some consumers who has strongly disagreed. As they do not find misuse of plastic
card is the reason for not opting the plastic money.

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10) If you are financial minister of the country, will the country see increase use of
Plastic Money?

Fig: 10. Consumers response whether see increase of plastic money in the country

As you can see in the above given chart, analyses have been done to know whether
consumers see the increase of plastic money in the country. As per the response most of the
consumers had agreed with it as they see increase of plastic money in the country as a
financial minister even some of the consumers had strongly agreed with it. There are few who
had disagreed with it and one consumer have strongly disagreed

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11) Do you think, Credit card/Debit card transaction in country over cash transaction
will help to curb black money circulation in economy?

Fig: 11. Plastic money can help in curb of black money circulation in economy

As you can see the above given chart, analyses have been done to know whether the plastic
money can help in curb of black money circulation in economy. As per the response, we had
come cross with the response with most of the consumers agreeing & strongly agreeing with
it. There is one consumer had disagreed with it as well as strongly disagreed. Political will go
a long way 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.

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12) Due to duplicity of paper money, you are shifting to plastic money?

Fig: 12. Due to duplicity of paper money consumers are shifting to plastic money

As you can see in the above given chart, analyses has been done to know whether due to
duplicity of paper money consumers are shifting to plastic money. As you can see the
response, consumers had agreed & some of them have strongly agreed with this. This means
Plastic money was not considered an alternative paper money. There are some consumers
who had disagreed with this. Looking at the recent increase in the use of plastic money after
Demonetisation, chances of penetration of plastic money in the circulation have increased
many folds.

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13) Are credit cards expensive as many other charges are charged on it?

Fig: 13. Credits cards are expensive as many other charges are charged on it

As you can see in the above given chart, analyses have been done to know regarding credit
cards i.e Does consumers find credit cards expensive as many other charges are charged on it.
As per the responses we have received maximum consumers had agreed even some have
strongly agreed with it. The 2nd most of the consumers had disagreed with it. Some consumers
have strongly disagreed. Some company offers incentives like discounts, cash back, etc. when
the purchase is done through plastic money.

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14) Do you use any of the plastic money on regular basis?

Fig: 14. Consumers use any of the plastic card on regular basis

As you can see in the above given chart, analyses has been done to know whether consumers
use any of the plastic money on a regular basis. As per the responses we had received most of
the consumers use it on a regular basis. There are few who do not use it on a regular basis.
There are some who are not sure.

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15) Plastic Card is regarded as a symbol of high Socio - Economic status.

Fig: 15. Plastic card is regarded as a symbol of high - socio economic status

As you can see in the above given chart, analyses have been done to know whether plastic
card should be regarded as a symbol of high - socio economic status. As per the responses we
had received through consumers most of the consumers had agreed & even strongly agreed
with it. Some of them had disagreed with it and also strongly disagreed. It thus concludes that
plastic card should be considered as high social status.

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16) More Credit card/Debit card transaction in country over cash transaction will help
solve the problem of corruption in the economy.

Fig: 16. Plastic money can help solve the problem of corruption in the economy.

As you can see in the above given chart, analyses have been done to know whether plastic
money can help solve the problem of corruption in the economy. As per the responses we had
got most of the consumers had agreed & strongly agreed with this. Some of the consumers
had disagreed with it. May be these consumers don’t find any reason on this.

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17) Any personal feedback on the use of plastic money.

1)Plastic card is growing hope to see more of its features

2)Plastics Money is more effective for organic transaction, It is good carry but lack of ATM
people are avoiding to Carry.

3)It is safe if we handle and use it properly

4)Plastic money is a safest mode of payment in a modern world.

5)All shops and small shops should have machines for card use

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 CHAPTER- 6
FINDINGS

The data was collected by 50 respondents by means of questionnaire and then was
analysed on the basis of their response. Out of 50, 33 responses have been mentioned
here.
As per analysis plastic money is handy to use.
Plastic banknotes are more resilient to tearing, folding, and microorganisms, making them
more long-lasting. Additionally, they perform better in automated sorting processes and
ATMs
Credit cards and debit cards can make it simple to do many operations, including
financial transfers and online payments.
Making purchases with plastic money is relatively simple and can be done anywhere.
Several online retailers also provide discounts for credit and debit card purchases.
Customers should be educated to remove any false impressions they may have about
plastic money 
Inform the customer that big value transactions can be made using plastic money as well.
Offering special education courses to adults aged 70 and up.
The use of plastic money is influenced by career and education. to a digital wallet
Spending patterns appear to be significantly influenced by gender and occupation. If there
is a demonetization strategy, it must be one that makes card use convenient for all groups
across all demographics.
Higher education, a certain vocation, and frequent card use all tend to increase card usage
and the likelihood of processing numerous cards. To stop card misuse, education is
necessary.

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 CHAPTER- 7
SUGGESTIONS

As observed in the study, it is inferred that the changing phase of technology has
taken a step towards the transformation of transactional framework in 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 which also
enables them the advantage of credit purchases and post-repayment option for the
amount of credit utilized on these cards. It has become the best, easiest and more
comfortable way to handle money with the advent of this plastic money.

Like every coin has two sides, this initiation also has its own advantages and
disadvantages as mentioned in the theoretical framework above. Security of
transactions is a major concern for people which is hindering to get more inclined
towards plastic money and also repayable capacity which plays a vital role. Thus,
government needs to take steps to build better and safer payment gateways with high
security programmed software which does not give a lead to data theft or hacking of
monetary details of the users.

Banks should educate people through awareness programs briefing about the uses of
plastic and the usage directions to the financially illiterate population as well as the
existing customers. To encourage more and more people to use plastic money.
Government needs to adopt this as a mass initiative and make plastic money usage
facility available to the untapped population of the economy to make plastic money
more in usage in our country.

1. It was discovered that people do not favour using plastic cards to pay for their
utility bills, such as telephone and electricity bills. In today's dynamic environment,
where since everything is becoming cashless and paperless, it is crucial to inform and
encourage consumers to pay their utility bills using plastic money.

2. People find using cards to make purchases to be convenient, according to research. The
days when making payments necessitated carrying large amounts of cash are long gone.
The people are now adjusting to this new method of transaction as a result of Prime
Minister Mr. Narendra Modi's emphasis on cashless transactions in banks, department
stores, grocery stores, apparel stores, etc.

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 3.A decrease in cashless transactions will also result in a ban on the importation of
duplicate foreign currency. To encourage and reassure consumers and boost the usage of
plastic money, safety procedures relevant to financial transfers need to be strengthened.
4.One of the main factors encouraging the use of plastic money is safety.
Multiple levels of security, such as passwords, OTPs (One Time Passwords), and the use
of Shttp (secured sites) rather than http, should be guaranteed.
5.To encourage wider use of plastic cards, transaction fees on online purchases should be
waived.
6. The use of plastic cards may potentially rise as a result of subsidies for electronic
transactions.
7. People should be encouraged to use their plastic cards more often when they travel.
Travel agencies may provide reductions to encourage the usage of plastic cards by the
public.
8. Plastic money can be a very significant factor in the fight against corruption in India.
The following are the factors that make it possible: Every movement of money and every
transaction involving large sums of money are kept track of and recorded, so nothing can
go unnoticed. Each official is only permitted to possess the money they earn or have
saved from their wages.
All of the financial transactions are legal. No unlawful money may be transmitted because
all financial transactions and transfers take place through bank accounts.
All exchanges of Indian rupees for U.S. or Swiss cash are tracked, along with their If a
large amount of money is converted, it is recorded; the prevalence of fraudulent money
practises is decreased; phoney paper notes cannot be manufactured since they are useless;
and so on. To retain a record of the transactions done, all of the transactions will be
logged, and payments made in this way will also be billed out. Consequently, this will
solve the issue of a lack of documentation for transactions.
Despite the fact that a cash memo from the shopkeeper is sometimes the only record or
proof that we have purchased something from that store, especially when a large sum of
money is involved, we frequently forget to get one.
As there is no phoney paper, the quantity of dishonest money practises decreases
9. The option of thumb scanning can be added to the use of plastic money so that security
is guaranteed and customers feel comfortable using plastic cards.
Consequently, this study has attempted to shed some insight on the variables influencing
utilisation and possibilities.

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 Strengthen the security component of all such devices, which is the key concern of users
of those devices.
To address the concerns of clients, extra features can be added.
People who worry about security are less likely to carry their card with them wherever
they go.
A plastic wallet's space that promotes the adoption of many forms of protection is missing
from mobile wallets.

The MetroCard was established in 1993 to modernise the public transportation system's
technology and eliminate the burden of carrying and collecting tokens. The MTA ceased
taking tokens in the subway on May 3, 2003[2], and it did the same for buses on December
31, 2003.

The MetroCard is expected to be totally eliminated by April 2024. The OMNY contactless
payment system, which lets riders to pay for their fare by tapping or waving their cellphones,
credit or debit cards, or smart cards from the MTA, will take its place. [3]

The MetroCard is managed by the MTA's Revenue Control, MetroCard Sales Division,
which is a division of the Office of the Executive Vice President. The company is Cubic
Transportation Systems, Inc.

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 CHAPTER– 08
CONCLUSION

We are living in world where 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 convenience. Technology intensive delivery channels like net banking, mobile
banking, etc. have created a win-win situation by extending great convenience & multiple
options for customer. From educating customers about credit cards & debit 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.

Plastic money is getting the acceptance from customers due to convenience and life style
symbol. The banks are targeting the card segment to penetrate into unexplored areas and
enhance the alternative revenue steam. The launch of Rupay provides the opportunity for
Indian banking system to reduce the dependence on foreign card providers. The flexibility
and cost effectiveness of Rupay cards will enhance the penetration of cards in India in
rural and semi urban areas. The supportive policy framework of BJP government may
also enhance the financial inclusion and adoption of card with schemes like Jan Dhan
Yojana. The information technology and mobile penetration is another supportive aspect
to help reduce the cost of operation and expand the reach of card.

The cards have the scope of enhancing transparency in overall financial transaction and
make growth more inclusive. It is true that at times plastic money is of great help but we
should admit that it is not the case always. One should be wise when using plastic money
or cash. Whatever it is, money has value and we should not fall a victim for thefts be it
online or not. 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’

In India, plastic money is expanding quickly. Many banks today provide cards of various
varieties, such as gold, silver, worldwide, platinum, etc. Though the foreign banks have a
dominant share in the card industry, the entry of the Indian banks like SBI, ICICI and
HDFC Bank changed the rules of the game. The third-largest provider of credit cards is
SBI. This proves that in our county, there is a huge potential for the use of plastic money.

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 BIBLIOGRAPHY

1) Bansi Patel and Urvi Amin (2012), “Plastic Money: Road may Towards Cash Less
Society”, Paripex Indian journal Of Research.
2) Anupama Sharma (2012), “Plastic card frauds and the countermeasures: Towards safer
payment mechanism”, International Journal of Research in Commerce, It &Management.
3) Manivannan P (2013), “Plastic Money a way for cash Less Payment System”, Global
Research Analysis.
4) Vimala V. and Dr. Sarala K.S., (2013).”Usuage and perception of plastic money
among the customers of BOI”. Asian Journal of Research in business Economics

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 WEB BLIOGRAPHY

1) https://en.wikipedia.org/wiki/Money
2) https://www.academia.edu/Documents/in/PLASTIC_MONEY
3) https://pctechmag.com/2018/05/5-signs-plastic-money-is-the-future/
4) https://www.thoughtco.com/canada-replaced-paper-currency-with-plastic-3971626
5) https://www.groupdiscussionideas.com/plastic-money-merits-demerits/
6) https://taluspay.com/blog/what-is-a-pos-system-6-functions-of-point-of-sale-systems/
7) https://www.quora.com/What-are-the-benefits-of-a-Delhi-Metro-Card

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 ANNEXURE

1) Current profession.
A) Student

B) Employed

C) Self- employed

D) Housewife

E) Other

2) Age
A) Below 18

B) 18 to 30

C) 30 to 50

D) 60 above

3) Gender
A) Male

B) Female

C) Other

4)Do you think is the use of Plastic money, the safest mode of transaction?
A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

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5) While travelling, plastic card is the preferred way of payment?
A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

6) According to you, is the use of Plastic card beneficial?

A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

7) According to you, the transaction through plastic money has become convenient?
A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

8) Plastic Card leads to Over Consumption and Spending.

A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

9) Misuse of plastic cards is the reason you don’t opt for plastic money?
A) Strongly Agree

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B) Agree

C) Disagree

D) Strongly Disagree

10) If you are financial minister of the country, will the country see increase use of
Plastic Money?
A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

11) Do you think, Credit card/Debit card transaction in country, over cash transaction
will help to curb black money circulation in Economy?

A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

12) Due to duplicity of paper money you are shifting to plastic money?
A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

13) Are credit cards expensive as many other charges are charged on it?
A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

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14) Do you use any of the plastic money on regular basis?
A) Yes

B) No

C) Maybe

15) Plastic Card is regarded as a symbol of high Socio-Economic status.

A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

16) More Credit card/Debit card transaction in country over cash transaction will help
solve the problem of corruption in the economy.
A) Strongly Agree

B) Agree

C) Disagree

D) Strongly Disagree

17) Any personal feedback on the use of plastic money.

Submit

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