PLASTIC MONEY

ABHISHEK AGARWAL
DEVIKA VENU

INTRODUCTION

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,smart cards,
etc. Credit cards, variants of plastic
money, are used as substitutes for
currency.

MEANING

Plastic money is a term that is used

predominantly in reference to the hard
plastic cards we use everyday in place of
actual bank notes. They can come in many
different forms such as cash cards, credit
cards, debit cards, pre-paid cash cards
and store cards.

HISTORY OF CREDIT
CARDS AND DEBIT
CARDS

ORIGIN OF CREDIT CARDS

First issued by individual stores and merchants.
These were only accepted by the businesses that
issued them.
Convenient to customers, provided customer loyalty
and customer service benefit. Therefore good for
customer and merchant.
It was not until 1950, that the Diners Club card was
created by a restaurant patron who forgot his wallet
and realised the need for an alternative to cash.
It was primarily used for entertainment and travel
expenses.

PLASTIC
BECOMES
THE
STANDARD

First Diners Club card made of cardboard

or celluloid.
In 1959, American Express changed all that
with the first card made of plastic.

ORIGIN OF
DEBIT CARDS

Introduced by Visa Association in 1989.

Linked to customers savings accounts.
Replaced cheque writing at point of sale. This helped
merchants check if customers had enough funds in their
account.
Convenience as cash and cheques dont have to be
carried.

TYPES OF
PLASTIC
MONEY

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 purchase 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; and you the pay loan back to the institution at a
later date.

DEBIT CARD
Substitutes for cash or cheque payments.
Only issued if you hold an account with the concerned bank.
When used to make a payment, the same amount is deducted from your bank
balance.

CHARGE CARD
Similar to credit card. However, after its use you will have to pay off the entire
amount billed, by the due date. Failing which you are likely to be considered a
defaulter and will usually have to pay up a steep late payment charge.
A 2.95% late payment fees (this differs from one bank to another) is levied in your
next billing statement.

AMEX CARD
Amex stands for American Express and is one of the well known charge cards.
It has its own merchant establishment tie ups and does not depend on the network
of MasterCard or Visa.
It is meant for the high income group category and companies and may not be
acceptable at many outlets.

GLOBAL CARD
These allow the flexibility and convenience of using a credit card rather than
cash or travellers cheque while traveling abroad for either business or
personal reasons.

MASTER CARD AND VISA

MasterCard and Visa are global non-profit organizations dedicated to promote
the growth of the card business across the world.
They have a built a vast network of merchant establishments so that customers
worldwide may use their respective credit cards to make various purchases.

SMART CARD
Contains an electronic chip used to store cash.
Used to pay small purchases.
Smart cards can provide identification, authentication, data storage and
application processing.
A single smart card can be programmed with multiple banking credentials, medical
entitlement, drivers license/public transport entitlement, loyalty programs and
club memberships to name just a few.

PHOTO CARD
If your photograph is imprinted on a card, then you have what is known as a photo
card.
Doing this helps identify the user of the credit card and is therefore considered
safer.
Also serves as an identity card.

ADVANTAGES OF
CREDIT CARD

BENEFITS TO BANK:
Provides an opportunity to the bank to
attract new potential customers.
To attract customers the bank employs
special trained staff. This gives the
bank an opportunity to find talent
among existing staff that would have
otherwise been wasted.
Provides additional customer services
to existing clients. Enhances customer
satisfaction.

BENEFITS TO CARD HOLDER

Can purchase goods and services at a large number of outlets without cash or
cheque.
Risk of carrying huge amounts of cash is avoided.
Cardholder has the period of free credit usually between 30-50 days of purchase.
Availing credit with minimum formality.

BENEFITS TO THE MERCHANT ESTABLISHMENT

Ensures timely and certainty of payments
Increase in sales because of purchasing power of cardholder.
Suppliers/ Sellers no longer have to send reminders of outstanding debt.

DISADVANTAGES The customer tends to overspend out of

immerse happiness.
OF CREDIT CARD Discounts and rebates can rarely be

obtained.
It might lead to spending habits and
cardholders may end up in big debts.
Customers may be denied cash discount
for payment through card.
Sometimes the merchant may swipe the
card several times saying that the
transaction has not been successful
leading to transactions being repeated.

CREDIT CARD TRANSACTION PROCESS

MERCHANT

CARDHOLDER

AUTHORIZATION

BANK

TYPES OF
CREDIT CARDS
OFFERED BY
INDIAN BANKS

Silver Cards
They 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 limits 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

 Gold and Platinum Cards

Gold and platinum credit cards are a status symbol for any credit cardholder, bringing prestige
since getting gold and platinum cards usually require that you have good credit rating and a higher
income levels. Gold and platinum cards offer higher limit for cash advance withdrawals and
sometimes can provide higher credit limits as compared to standard or silver cards . If you have a
gold or platinum card, you also get better perks and privileges such as travel insurance, extended
warranties for appliance purchases and special deals on specific products, and purchase protection
insurance . You can also engage in some loyalty schemes that are offered for gold and platinum
credit card holders which can sometimes involve cash back promos and reward points systems .
Some popular gold and platinum cards available are the American Express Gold card, and the
ICICI Solid Gold Credit Card .It is not possible to cover them the exact offerings of these cards but I
will highly advice you to check all these websites of the banks to get all the info about the credit
cards they are offering. Also try to talk to your friends who are having credit cards to get more info.

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,
ICICI Bank - 5.07 Mn
HDFC Bank - 4.42 Mn
SBI Cards - 2.65 Mn
Citibank - - 2.54 Mn
HSBC Cards - 1.3 Mn
ABN Amro - 0.78Mn
Axis Bank - 0.57 Mn
Deutsche Bank - 0.495 Mn
American Express - 0.45 Mn

ASPECTS
OF DEBIT
CARDS

1) ONLINE DEBIT CARDS

Require electronic authorization of every transaction and debits are
reflected in the users account immediately.
Additionally secured with personal identification number (PIN)
system and online cards require such authentication for every
transaction, essentially becoming enhanced ATM cards.

2) Pre-paid Cards (i.e. cards linked to a prepaid account)

Pre-paid or re-loadable cards are identical to debit cards with the only difference
being that instead of having a savings account where your purchases are
withdrawn from, you have a pre-paid account. Most people add money to, or
load, their pre-paid accounts with cash and in person by going to certain
grocery stores, drugstores, check cashing stores, and even some gas stations
However, they usually involve a heavy fee structure with monthly fees, pertransaction fees, fees for adding funds to your account

BENEFITS OF A
DEBIT CARD

Obtaining a debit card is easy. On opening an account with

the bank we usually get a debit card.
No background check is required while getting a debit card
as the bank already has all the account information.
Convenience- A debit card prevents us from carrying a lot of
cash and cheques.
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.
A statement of transactions can be obtained from the
customers branch
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 A
DEBIT CARD

The debit card service s is meant for

withdrawals against the balance already
available in the designated account.
Its the card holders obligation to maintain
sufficient balance in his account.
Spending is limited to our bank account.
The customer can withdraw a minimum of Rs.
100/- and a maximum Rs.15,000/- per day

DEBIT CARD
PROCESSING

What is Debit Card Processing?

There are two types of debit card processing:

PIN (formerly known as online) debit transactions require
the debit card and cardholder to be present, and the
cardholder to enter a PIN (Personal Identification Number)
into a PIN Pad at the time of purchase. This method of
payment can also offer optional cash back to the customer
with a purchase. PIN debit transactions provide immediate
access to the cardholder's checking account funds. PIN Pad
technology encrypts the information and keeps the
transaction secure.
Signature (formerly known as offline or non PIN) debit
transactions behave very much like credit card transactions.
The debit card must have either the Visa, MasterCard or
Discover Network logo, which allows it to work in any cardpresent or card-not-present purchasing situation including
mail order, telephone order, wireless, and Internet. Cash
back is not available when processing a signature debit card
transaction.

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

ADVANTAGES Will not burn easily like paper money. Can also bear high
OF PLASTIC
temperatures.
MONEY

No fear of theft and can be easily used.

Gives you reward points that you can redeem.
Doesnt wear over time and rip like paper.
Provides a convenient payment method for purchases made on
the internet and telephone.

DISADVANTAGES
OF PLASTIC
MONEY

Damages your credit rating if your payments are

late.
Allow you to build up more debt than you can
handle.
Has complicated terms and conditions.
They can be stolen leading to huge losses.
High interest rates are charged if you fail to pay up
on due date.
Makes you spend more than you can afford. In
other words, overspending.

THE END