INDEX

CHAPTER CONTENT PAGE

NO. NO.

I. Chapter I: Introduction to Plastic Money

• History
• Debit card
• Credit card
• Types of plastic cards

II. Chapter 2: Research Methodology

• Method of data collection
• Objective of study

III.
Chapter 3: Review of literature

IV. Chapter 4: Conceptual Framework

 History
 Advantages/ Disadvantages
 Types of plastic money
 Credit card
 Debit card
 ATM card
 Rechargeable calling cards store-
value card
 Prepaid card
 Gift card
 ATVM cards

V. Chapter 5: Data Analysis and Interpretation

VI. Conclusion

VII. Bibliography

VIII. Appendix
 CHAPTER 1
INTRODUCTION TO PLASTIC MONEY
1.1.1 INTRODUCTION

Concept of plastic money Plastic money or polymer money, made from 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 credit cards, debits cards, ATMs, smart cards, etc. This assignment on plastic money
is divided into two portions titled Concept and Experiences.

The former covers the emergence of plastic money, different types of plastic cards, their growth
in India. Plastic money is the alternative to the cash or the standard 'money', Plastic money is
used to refer to the credit cards or the debit cards that we use to make purchases in our everyday
life. Plastic money is much more convenient to carry around as you do not have to carry a huge
sum of money with you. It is also much safer to carry it along or to travel with it as if it is stolen
one can consult the bank whose service you are using and get it blocked hence saving your money
from getting stolen or even lost.

Nowadays, even developing countries like India are encouraging the use of these

plastic money more than cash due to these reasons. Furthermore, these credit and debit cards
arson have plastic used in their making and that is where the name 'plastic money has originated
from.

1.2. The History of Credit Cards and Debit Cards in Plastic Money

The history Of Credit cards and Debit 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 their
cards as opposed to checks or cash.

1.2.1 CREDIT CARD ORIGINS

The first credit cards were issued by individual stores and merchants. These cards were issued
in limited locations and only accepted by the businesses that issued them. While the cards were
convenient for the customers, they also provided a customer 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 a 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. The first Diner's Club cards were made from
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 for
payment. Then that impression was billed to the customer and

due in full each month. Several American Express cards still 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 with additional card options. Bank Card Associations In 1966, Bank of America
created a card that was a general-purpose card or "open loop" card. 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 of today. Two systems emerged as the leaders--Visa and Master Card.

However, today there is little difference between the two and most merchants accept both card
associations.

1.2.2. DEBIT CARD EMERGE

The Visa association of cards took credit cards to a new level in 1989 when they introduced
debit cards. These cards linked consumers to their checking accounts. Money was now drawn
from a checking account at the point of sale with these new cards and replaced cheque 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 a safe alternative to cash and cheques.

Then in Future there were almost 29 million debit card users as of 2006, with a projected 34.4
million users by 2016. However, online services like PayPal 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.

1.23 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
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

1.2.4 ADVANTAGES AND DISADVANTAGES

ADVANTAGES
l. Plastic money, unlike paper money, will not burn easily and can resist higher temperatures than
paper money.
2. You have no fear to be theft.
3. And it’s easy to use.

4. Paper money also picks up dirt and stains more easily than plastic money.
5. Plastic money is the debit and credit cards,
6. Plus, point of plastic money is that you won't have to carry your cash around all the
time,

7. It also doesn't tear after time as paper does nor does it rip and tear.
8. Give you incentives, such as reward points, that you can redeem.
9. Be more convenient to carry than cash.
10. Provide a convenient payment method for purchases made on the Internet and over the
telephone.
I. Help you establish a good credit history.

DISADVANTAGES
1. 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.
2. Damage your credit rating if your payments are late•
3. Allow you to build up more debt than you can handier;
4. Have complicated tens and conditions;
5. Paper money also picks up dirt and stains more easily than plastic money,
6. I can't really see any advantages to have paper money, unless it is cheaper to

Its disadvantage is that, some extra money will be deducted for the bank services. It's around
2.5% of the money you spent

1.2.5 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 Point of Sale Terminals (POST) present on merchant's site 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.

1.2.6 TECHNOLOGIES
Several International Organization for Standardization standards, ISO/IEC 7810, ISO/IEC
7811, ISO/IEC 7812, ISO/IEC 7813, ISO 8583, and ISO/IEC 4909, define
the physical properties of payment cards, including size, flexibility, location of the magnetic
stripe, magnetic characteristics, and data formats. They also provide the standards for financial
cards, including the allocation of card number ranges to different card issuing institutions.
1.2.7 EMBOSSING
Originally charge account identification was paper-based. In 1959 American Express was the
first charge card operator to issue embossed plastic cards which enabled cards to be manually
imprinted for processing, making processing faster and reducing transcription errors. Other
credit card issuers followed suit. The information typically embossed are the bank card number,
card expiry date and cardholder's name. Though the imprinting method has been predominantly
superseded by the magnetic stripe and then by the integrated chip, cards continue to be
embossed in Case a transaction needs to be processed manually. Cards conform to the ISO/IEC
7810 ID-I standard, ISO/IEC 781 Ion embossing, and the ISO/IEC 7812 card numbering
standard.

Magnetic stripe

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

1. Magnetic stripe
2. Signature stripe
3. Card Security Code

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 Magnetic

stripes started to be rolled out on debit cards in the 1970s with the introduction of ATMs. The

magnetic stripe stores card data which can be read by physical contact and swiping past a reading

head. The magnetic stripe contains all the information appearing on the card face but allows

for faster processing at

point-of-sale than the then manual alternative as well as subsequently by the

transaction processing company. The magnetic stripe is in the process of being augmented by

the integrated chip.

1.2.8 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 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 later.

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.
A debit card is only accepted at outlets with electronic swipe- machines that can check and
deduct amounts from your bank balance online,

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 your
next billing statement.

Amex card
Amex Stands for American Express and is one of the well-known Charge cards. This card has its
own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa.
Credit cards
This card is typically meant for high-income group categories and companies and may not be
acceptable at many outlets. There are a wide variety of special privileges offered to Amex
cardholders.

Dinner club card

Diners Club is a branded charge card, there are a wide variety of special privileges offered to the
Diners Club cardholder, for instance, as a cardholder you can set your own spending limit.
Besides, the card has its own merchant establishment tie-ups and does not depend on the network
of MasterCard or Visa, • However, since this card is typically meant for high-income group
categories, it may not be acceptable at many outlets. It would be a good idea to check whether a
member establishment does accept the card or not in advance.

Global card
Global cards allow you the flexibility and convenience of using a credit card rather than cash or
traveler’s cheque while travelling abroad for either business or personal reasons,

Co-branded card
Co-branded cards are credit cards issued by card companies that have tied up with a popular
brand for the purpose of offering certain exclusive benefits to the consumer. A debit card with a
difference. For example, the Citi-Times gives you all the benefits of a Citibank credit card along
with a special discount on Times Music cassettes, free entry to Times Music events, etc.

Master card & Visa

MasterCard and Visa are global non-profit organizations dedicated to promoting the growth of
the card business across the world. They have built a vast network of merchant establishments
so that customers worldwide may use their respective credit cards to make various purchases.
Smart card
A smart card contains an electronic chip which is used to store cash. This is most useful when
you must pay for small purchases, for example bus fares and coffee, no identification, signature
or payment authorization is required for using this card. The exact amount of purchase is
deducted from the smart card during payment and is collected by smart card reading machines.
No change is given. Currently this product is available only in very developed countries like
the United States and is being used only sporadically in India.

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. Besides, in many
cases, your photo card can function as your identity card as well.
 CHAPTER 11:
RESEARCH METHODOLOGY
Primary Data: Data which has not been previously published i.e. the data is derived from a new
or original research study & collected directly from first hand sources by means of surveys
observation or experimentation is known as Primary

Data.

Secondary Data: Data, which has already been collected, by Someone or an organization
for some other purpose or research study is known as Secondary Data.

Method of Data Collection:

Secondary Data: Secondary Data was collected from various sources such as books, internet and
newspapers.

11.1.2 OBJECTIVE OF THE STUDY To

study the concept of Plastic Money.

To study different types of Plastic Money.

To analyze the awareness among people and society regarding Plastic Money. TO

prevent online and offline frauds in banking.

 CHAPTER 111:
REVIEW OF LITERATURE

Many empirical studies have been conducted on the subject of 'Plastic Money' in India and
abroad. The major emphasis of research has been on various issues like frauds, security, usage
pattern, new method of e-payment, etc. The previous work done on plastic money needs perusal.
It has been reviewed to indicate in a general way the type of work done on this subject in India.
It is expected that the critical examination of the studies would give focus to our problem and
help to indicate the areas which have remained neglected at the hands of the researchers. From the
review of literature, it was found that hardly there was a study which examined theperception of
both users and traders on the usage of plastic money. Also, many studies concentrated on
individual cards, for instance, credit or debit card and neglected the joint effect and new
innovative cards like smart card, charge card and check card. In this study, an attempt is made to
include all types of cards in the analysis.

Handelman and Munson (1989), "Switching behaviors from credit card to cash payment among
ethnically diverse retail customers" shows that the credit card sales constitute an important
revenue source for many retailers, Their ever increasing use and evaluation into other forms, such
as debit and electron cards, demands that retailers gain a more complete understanding Of how
they are used by diverse consumer segments. Particularly needed is a better understating of the
propensity to switch over from credit card to cash payment and the incentive required to initiate
switching. In view of the cost to the retailer of administering credit card payment systems, the
retailer's overall profit position may be enhanced by converting a larger proportion of credit card
sales to cash sales. Four aspects of credit card usage and switching ethnicities are investigated,
propensity to switch over from credit card to cash payment at various levels of monetary
incentive, the effect of product price on propensity to switch, the frequency of credit card usage,
and the preferred method of payment of credit card balances (installment versus full payment).
Several significant differences are shown among the three ethnic groups studied
(Anglo-American, Chinese-American and his panic-American) in these usage behaviors such
differences might even be Review of Literature 32 extended to international comparisons
involving consumers domiciled in different countries.
Barker (1992) in his study, Globalization of credit card usage: The case of a developing
economy" investigate the attitude of Turkish consumers towards credit

cards, and the approach of card issuers by surveying two samples of 200 card holders and non-
holders. The better educated, middle aged members of the upper middle class seem to be the
prime target; the most important reasons for using a credit card were "case of payment", followed
by "risk of carrying cash", Non holders do not carry credit cards because they do not know much
about it; informal sources of information appear to be more influential than mass media
advertising in penetrating the market; proposes that the usage and the administration of credit
cards are influenced very much by the infrastructure of the country and hence, credit card
companies have to modify their marketing and administrative procedures rather than following a
standardized approach.

Natarajan and Manohar (1993) 'Credit Cards—an Analysis". A study has been attempted 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 cards issued by the Canara
Bank. A random sampling technique is used to collect the data. Ten components i.e. numbers of
purchases, shops, 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 has been conducted to know the level of utilization. For this, both
personal and nonpersonal factors also have been taken into consideration. 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.

Vora and Gawain (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
their 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 Literature
33 author, the card holders market has a potential to grow to 7 million, if all tax paying citizens
are considered. But these manful efforts at upgrading services can only have a limited impact if
the Indian customer remains
credit shy. For this, they must change their spending habits and keep their card active, so that a
piece of plastic becomes a premium card in an effective way.

Nash and Sankey (1997), On competition, Risk, and Hidden Assets in the Market for Bank Credit
Cards" show that the market for credit cards has been the subject of recent attention and
controversy because of "High" profits earned on credit cards and substantial premiums on the
resale of credit card receivable. This paper estimates risk-return profiles for credit card banks
and explores the role of intangible assets in determining resale premiums on credit card
receivable. In addition, the effect on resale market of securitization and the opportunity cost of
acquiring new accounts are analyzed. Using alternative measure of risk and alternative control
groups, authors find, for the year 1989 to 1995, that Credit-Card banks earned significantly
higher return on assets but that these returns were associated with greater risk-taking.

Black and Morgan (1998), "Risk and democratization of credit cards". Research paper show the
dramatic rise in credit card charge-offs during 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 affect delinquency risk. The new
card holders seem riskier along several dimensions. They tend to earn less, and as a result, they
owe relative to income. This rise in debt burden almost certainly contributed to the rise in charge
offs, since debt burdens are a 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 rise in charge-offs, since delinquency rates are higher in those occupations,
perhaps income is more cyclical,
 CHAPTER IV:
CONCEPTUAL FRAMEWORK

A. SECONDARY DATA
IV. DEFINITION

A Slang phrase for credit cards, especially when such cards used to make purchases. The "plastic"
portion of this term 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 they are a liability rather than an asset, they are not money and
not part of the economy's money supply.

a. CREDIT CARD

IV.I.I INTRODUCTION

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,

In other words, A credit card can be viewed as a payment mechanism which enables the holder
of the card to purchase goods (or services) without parting with immediate cash and make a
one-time payment at the end of a specified period (known as the billing cycle which is usually a
month) with a provision for spreading this payment over several easy instalments.

Again this card will permit the card holder to withdraw cash from an ATM, and a credit card
will allow the user to purchase goods and services directly, but unlike a Cash Card the money
is basically a high interest loan to the card holder, although the card holder can avoid any interest
charges by paying the balance off in full each month.
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 creates a revolving account and 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.

The Credit Card is built around the revolving credit concept. The card carries a preset limit for
spending which can be utilized by the cardholder during the specified period. At the end of the
month, the holder needs to pay about 5 to 10 percent of the outstanding value of purchases and
liquidate the balance in easy installments over the next few months.

IV.1.2. TECHNICAL SPECIFICATIONS:

The size of most credit cards is 85.60 mm x 53.98 mm (3.370 in x 2.125 in) and rounded corners
with a radius of 2.88—3.48 mm, conforming to the ISO/IEC 7810 ID-I standard, the same size
as ATM cards and other payment cards, such as debit

Credit cards have a printed or embossed bank card number complying with the ISO/IEC
7812 numbering standard. The card number's prefix, called the Bank Identification
Number, is the sequence of digits at the beginning of the number that determine the bank to
which a credit card number belongs. This is the first six digits for MasterCard and Visa cards.
The next nine digits are the individual account number, and the final digit is a validity check
code.

Both standards are maintained and further developed by ISO/IEC JTC

I/SC 17/WG l. Credit cards have a magnetic stripe conforming to the ISO/IEC 7813. Many
modern credit cards have a computer chip embedded in them as a security feature.

In addition to the main credit card number, credit cards also carry issue and expiration dates
(given to the nearest month), as well as extra codes such as issue numbers and security codes.
Not all credit cards have the same sets of extra codes nor do they use the same number of digits.
IV.1.3. BASIC TERMINOLOGIES

The balance outstanding at the end of a month carries a rate of interest of 2 percent to 3 percent
per month.

Parties involved:
Cardholder: The holder of the card used to make a purchase; the consumer.

Card-issuing bank: The financial institution or other organization that issued the credit card to the
cardholder.

Acquiring bank: The financial institution accepting payment for the products or services on behalf
of the merchant.

Merchant account: This could refer to the acquiring bank or the independent sales organization,

but in general is the organization that the merchant deals with.

Credit Card association: An association of card-issuing banks such as Discover, Visa, MasterCard,
American Express, etc. that set transaction terms for merchants, card- issuing banks, and acquiring
banks.

Transaction network: The system that implements the mechanics of the electronic transactions.
May be operated by an independent company, and one company may operate multiple networks.

Affinity partner: Some institutions lend their names to an issuer to attract customers that have a
strong relationship with that institution and get paid a fee or a percentage of the balance for each
card issued using their name.

Insurance providers: Insurers underwriting various insurance protections offered as credit card
perks.
IV.1.5 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 customers.

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.

(B) BENEFITS TO CARD HOLDER

The principal benefits to a card holder are:

a) He can purchase goods and services at many 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 encasings a cheque at the bank.

(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 must send reminders of outstanding debits.

IV.1.4. DISADVANTAGES OF CREDIT CARD

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.

IV.1.6. USAGE

A credit card issuing company, such as a bank or credit union, enters into agreements with
merchants for them to accept their credit cards. Merchants often advertise which cards they accept
by displaying acceptance marks — generally derived from logos
— or this may be communicated in signage in the establishment or in company material (e.g., a
restaurant's menu may indicate which credit cards are accepted). Merchants may also
communicate this orally, as in "We take (brands X, Y, and Z)" or "We don't take credit cards".

The credit card issuer issues a credit card to a customer at the time or after an account has been
approved by the credit provider, which need not be the same entity as the card issuer. The
cardholders can then use it to make purchases at merchants accepting that card. When a
purchase is made, the cardholder agrees to pay the card issuer. The cardholder indicates
consent to pay by signing a receipt with a record of the card details and indicating the amount
to be paid or by entering a personal identification number (PIN). Also, many merchants now
accept verbal authorizations via telephone and authorization using the Internet, known as a
card not present transaction (CNP).
IV.1.7 INTEREST CHARGES

Each month, the cardholder is sent a statement indicating the purchases made with the card, any
outstanding fees, and the total amount owed. In the US, after receiving the statement, the
cardholder may dispute any charges that he or she thinks are incorrect. The Fair Credit Billing
Act gives details of the US regulations. The cardholder must pay a defined minimum portion of
the amount owed by a due date or may choose to pay a higher amount. The credit issuer charges
interest on the unpaid balance if the billed amount is not paid in full (typically at a much higher
rate than most other forms of debt).

For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there
would be no interest charged. If, however, even $1.00 of the total amount remained unpaid,
interest would be charged on the $1,000 from the date of purchase until the payment is received.
The precise way interest is charged is usually detailed in a cardholder agreement which may be
summarized on the back of the monthly statement. The general calculation formula most financial
institutions use to determine the amount of interest to be charged is (APR/IO () x ADB)/365 x
number of days revolved. Take the annual percentage rate (APR) and divide by 100then multiply
to the amount of the average daily balance (ADB). Divide the result by365 and then take this total
and multiply by the total number of days the amount revolved before payment was made on the
account.

IV.1.8 GRACE PERIOD

A credit card's grace period is the time the cardholder must pay the balance before interest is
assessed on the outstanding balance. Grace periods may vary, but usually range from 20 to 55
days depending on the type of credit card and the issuing bank. Some policies allow for
reinstatement after certain conditions are met.

Usually, if a cardholder is late paying the balance, finance charges will be calculated, and the grace
period does not apply. Finance charges incurred depend on the grace
period and balance; with most credit cards there is no grace period if there is any outstanding
balance from the previous billing eyelet or statement (i.e. interest is applied on both the previous
balance and new transactions). However, there are some credit cards that will only apply finance
charge on the previous or old balance, excluding new transactions.

IV.1.9 TYPES OF CREDIT CARDS

1. BALANCE TRANSFER CARDS:

They 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 an IOW 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.

2. REWARDS CREDIT CARDS:

They 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 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.
 3. 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

4. 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 amount 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.

5. CREDIT CARDS FOR BAD CREDITORS:

Bad credit cred 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. Student Credit Cards
Student credit cards are cards meant to attract college and university students. These cards omen
offer sign-up bonuses for students. They are also easier to apply for, since credit card companies
recognize that students have much shorter credit histories than the average customer.
omen offer sign-up bonuses for students. They are also easier to apply for, since credit card companies
recognize that students have much shorter credit histories than the average customer.

IV.1.10. TYPES OF CREDIT CARDS OFFERRED BY INDIAN BANKS

Silver credit cards rank lowest among the metal named cards, and, because of lower prestige to
gold and platinum cards are commonly knowns as basic and standard 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 00/0 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. HI) FC 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 card holder, bringing prestige Since getting gold
and platinum cards usually require that you have good car 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.

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 IO Credit Card Issuers in India are as follows,

1. ICICI Bank
2. HDFC Bank
3. SBI Cards
4. Citibank
5. HSBC Cards
6. ABN Amor
7. Axis Bank
8. Deutsche Bank
9. American Express
(Data Courtesy - The Reserve Bank of India)

IV.2.1. DETERMINANTS TO CARDHOLDERS 1.1--

11GH INTEREST AND BANKRUPTCY

Low introductory credit card rates are limited to a fixed term, usually between 6 and
12 months, after which a higher rate is charged. As all credit cards charge fees and interest, some
customers become so indebted to their credit card provider that they are driven to bankruptcy.
Some credit cards often levy a rate of 20 to 30 percent after a payment is missed. In other cases,
a fixed charge is levied without change to the interest rate. In some cases, universal default may
apply: the high default rate is applied to a card in good standing by missing a payment on an
unrelated account from the same provider, this can lead to a snowball effect in which the
consumer is drowned by unexpectedly high interest rates. Further, most card holder agreements
enable the issuer to arbitrarily raise the interest rate for any reason they see fit. First Premier
Bank at one point offered a credit card with a
79.9% interest rate. However, they discontinued this card in February 2011 because of persistent
defaults.

WEAKNESS SELF REGULATION

Several studies have shown that consumers are likely to spend more money when they pay by
credit card. Researchers suggest that when people pay using credit cards, they do not experience
the abstract pain of payment. Furthermore, researchers have found that using credit cards can
increase consumption of unhealthy food.

IV.2.2. DETERMINANTS TO SOCIETY

1. INFLATED PRICING FOR ALL CONSUMERS

Merchants that accept credit cards must pay interchange fees and discount fees on all credit-
card transactions, in some cases merchants are barred by their credit agreements from passing
these fees directly to credit card customers, or from

setting a minimum transaction amount (no longer prohibited in the United States, United
Kingdom or Australia). The result is that merchants are induced to charge all customers
(including those who do not use credit cards) higher prices to cover the fees on credit card
transactions. The inducement can be strong because the merchant's fee is a percentage of the
sale price, which has a disproportionate effect on the profitability of businesses that have
predominantly credit card transactions, unless compensated for by raising prices generally. In
the United States in 2008 credit card companies collected a total of $48 billion in interchange
fees, or an average of $427 per family, with an average fee rate of about 2% per transaction.

2. BENEFITS TO MERCHANTS
An example of street markets accepting credit cards. Most simply display the acceptance marks
(stylized logos, shown in the upper-left corner of the sign) of all the cards they accept.

For merchants, a credit card transaction is often more secure than other forms of payment, such
as cheques, because the issuing bank commits to pay the merchant the moment the transaction
is authorized, regardless of whether the consumer defaults on the credit card payment (except
for legitimate disputes, which are discussed below, and can result in charges back to the
merchant). In most cases, cards are even more secure than cash, because they discourage theft
by the merchant's employees and reduce the amount of cash on the premises. Finally,
credit cards reduce the back-office expense of processing checks/cash and transporting them to
the bank,

3. COSTS TO MERCHANTS
Merchants are charged several fees for accepting credit cards. The merchant is usually charged
a commission of around I to 4 percent of the value of each transaction paid for by credit card.
The merchant may also pay a variable charge, called a merchant discount rate, for each
transaction. In some instances of very low- value transactions, use of credit cards will
significantly reduce the profit margin or cause the merchant to lose money on the transaction.
Merchants with very low average transaction prices or very high average transaction prices are
more averse to accepting credit cards. In some cases, merchants may charge users a "credit card
supplement" (or surcharge), either a fixed amount or a percentage, for payment by credit card.
IV.2.3. SECURITY

Credit card security relies on the physical security of the plastic card as well as the privacy of the
credit card number. Therefore, whenever a person other than the

card owner has access to the card or its number, security is potentially compromised. Once,
merchants would often accept credit card numbers without additional verification for mail order
purchases. It's now common practice to only ship to confirmed addresses as a security measure to
minimize fraudulent purchases. Some merchants will accept a credit card number for in-store
purchases, whereupon access to the number allows easy fraud, but many require the card itself to
be present, and require a signature. A lost or stolen card can be cancelled, and if this is done quickly,
will greatly limit the fraud that can take place in this way. European banks can require a cardholder's
security PIN be entered for in-person purchases with the card.

The Payment Card Industry Data Security Standard (PCI DSS) is the security standard issued by
the Payment Card Industry Security Standards Council (PCI SSC). This data security standard is
used by acquiring banks to impose cardholder data security measures upon their merchants.

The goal of the credit card companies is not to eliminate fraud, but to "reduce it to

manageable levels". This implies that fraud prevention measures will be used only if their cost are
lower than the potential gains from fraud reduction, whereas high cost low- return measures will
not be used — as would be expected from organizations whose goal is profit maximization.

CODE 10

Code 10 calls are made when merchants are suspicious about accepting a credit card. The operator
then asks the merchant a series of YES or NO questions to find out whether the merchant is
suspicious of the card or the cardholder. The merchant
may be asked to retain the card if it is safe to do so. The merchant may receive a reward for
returning a confiscated card to the issuing bank, especially if an arrest is made.

Iv.2.4 COSTS
Credit card issuers (banks) have several types of costs:

1. INTEREST EXPENSES

Banks generally borrow the money they then lend to their Customers. AS they receive very low-
interest loans from other firms, they may borrow as much as their customers require, while lending
their capital to other borrowers at higher rates. If the card issuer charges 15% on money lent to
users, and it costs 5% to borrow the money to lend, and the balance sits with the cardholder for
a year, the issuer earns on the loan. This 10% difference is the "net interest spread" and the
5% is the "interest expense".

2. OPERATING COSTS

This is the cost of running the credit card portfolio, including everything from

paying the executives who run the company to printing the plastics, to mailing the statements,
to running the computers that keep track of every cardholder's balance, to taking the many phone
calls which cardholders place to their issuer, to protecting the customers from fraud rings.
Depending on the issuer, marketing programs are also a significant portion of expenses,

3. CHARGE OFFs

When a cardholder becomes severely delinquent on a debt (often at the point of six months
without payment), the creditor may declare the debt to be a charge-off. It will then be listed as
such on the debtor's credit bureau reports. (Equifax, for instance, lists 'tR9" in the "status" column
to denote a charge-off.)
A charge-off is "written off as uncollectable". To banks, bad debts a fraud are part of the cost of
doing business. However, the debt is still legally valid, and the creditor can attempt to collect the
full amount for the time periods permitted under state law, which is usually three to seven years.

IV.2.5. REWARDS

Many credit card customers receive rewards, such as frequent flyer points, gift certificates, or
cash back as an incentive to use the card. Rewards are generally tied to purchasing an item or
service on the card, which may or may not include balance transfers, cash advances, or other
special uses. Depending on the type of card, rewards will generally cost the issuer between 0.25%
and 2.0% of the spread, Networks such as Visa or MasterCard have increased their fees to allow
issuers to fund their rewards system. Some issuers discourage redemption by forcing the
cardholder to call customer service for rewards.

On their servicing website, redeeming awards is usually a feature that is very well hidden by the
issuers. With a fractured and competitive environment, rewards points cut dramatically into an
issuer's bottom line, and rewards points and related incentives must be carefully managed to
ensure a profitable portfolio, unlike unused gift cards, in whose case the breakage in certain US
states goes to the state's treasury, unredeemed credit card points are retained by the issuer.

IV.2.6. FRAUDS

In relative numbers the values lost in bank card fraud are minor, calculated in 2006 at 7 cents per
100 dollars’ worth of transactions. In 2004, in the UK, the cost of

fraud was over E500 million. When a card is stolen, or an unauthorized duplicate made, most
card issuers will refund some or all the charges that the customer has received for things they did
not buy. These refunds will, in some cases, be at the expense of the merchant, especially in mail
order cases where the merchant cannot claim sight of the card, in several countries, merchants
will lose the money if no ID card was asked for, therefore merchants usually require ID card in
these countries,
Employees that are specialized in doing fraud monitoring and investigation are often placed in
Risk Management, Fraud and Authorization, or Cards and Unsecured Business. Fraud monitoring
emphasizes minimizing fraud losses while trying to track down those responsible and contain the
situation. Credit card fraud is a major white- collar crime that has been around for many decades,
even with the advent of the chip- based card (EMV) that was put into practice in some countries
to prevent cases such as these. Even with the implementation of such measures, credit card fraud
continues to be a problem.

IV.2.7. REVENUES

Offsetting the costs are the following revenues:

1. INTERCHANGE FEE
In addition to fees paid by the card holder, merchants must also pay interchange fees to the card-
issuing bank and the card association. For a typical credit card issuer, interchange fee revenues
may represent about a quarter of total revenues.

These fees are typically from 1 to 6 percent of each sale but will vary not only from merchant to
merchant (large merchants can negotiate lower rates), but also from card to card, with business
cards and rewards cards generally costing the merchants more to process. The interchange fee
that applies to a particular transaction is also affected by many other variables,

2. INTEREST ON OUTSTANDING CHARGES

Interest charges vary widely from card issuer to card issuer. Often, there are "teaser" rates in
effect for initial periods of time (as low as zero percent for, say, six months), whereas regular
rates can be as high as 4() percent. In the U.S. there is no federal limit on the interest or late fees
credit card issuers can charge; the interest rates are set by the states, with some states such as
South Dakota, having no ceiling on interest rates and fees, inviting some banks to establish their
credit card operations there. Other states, for example Delaware, have very weak usury laws. The
teaser rate no longer
applies if the customer does not pay their bills on time and is replaced by a penalty interest rate
(for example, 23.99%) that applies retroactively.

3. FEES CHARGED TO CUSTOMERS

The major fees are for:
I. Late or overdue payments

ii. Charges that result in exceeding the credit limit on the card (whether deliberately
or by mistake), called over limit fees

iii. Returned cheque fees or payment processing fees (e.g. phone payment fee)

iv. Cash advances and convenience cheques (often 3% of the amount)

v. Transactions in a foreign currency (as much as 3% of the amount). A few financial

institutions do not charge a fee for this.

VI. Membership fees (annual or monthly), sometimes a percentage of the credit limit.

4.0VER LIMIT CHARGES

Consumers who keep their account in good order by always staying within their credit limit, and
always making at least the minimum monthly payment will see interest as the biggest expense
from their card provider. Those who are not so careful and regularly Surpass their credit limit or
are late in making payments are exposed to multiple charges that were typically as high as E25—
35 until a ruling from the Office of Fair Trading that they would presume charges over El 2 to be
unfair which led most card providers to reduce their fees to E 12.
IV.3.1 CREDIT CARDS IN ATMs

Many credit cards can also be used in an ATM to withdraw money against the credit limit
extended to the card, but many cards issuers charge interest on cash advances before they do so
on purchases. The interest on cash advances is commonly charged from the date the withdrawal
is made, rather than the monthly billing date. Many card issuers levy a commission for cash
withdrawals, even if

the ATM belongs to the same bank as the card issuer. Merchants do not offer cashback on credit
card transactions because they would pay a percentage commission of the additional cash amount
to their bank or merchant services provider, thereby making it uneconomical.

Discover is a notable exception to the above. A customer with a Discover card may get up to
$120 cash back if the merchant allows it, this amount is simply added to the card holder's cost of
the transaction and no extra fees are charged as the transaction is not considered a cash advance.

Many credit card companies will also, when applying payments to a card, do so, for the matter
at hand, at the end of a billing cycle, and apply those payments to everything before cash
advances. For this reason, many consumers have large cash balances, which have no grace
period and incur interest at a rate that is (usually) higher than the purchase rate, and will carry
those balances for years, even if they pay Off their statement balance each month.

IV.3.2 CREDIT CARDS AS FUNDING FOR

ENTREPREUNERS
Credit cards are a risky way for entrepreneurs to acquire capital for their startups when more
conventional financing is unavailable. Len Bozick and Sandy Lerner used personal credit card
to start Cisco Systems. Larry Page and Sergey Brines startup of Google was financed by credit
cards to buy the necessary computers and office equipment, more specifically "a terabyte of
hard disks".
Similarly, filmmaker Robert Townsend financed part of Hollywood Shuffle using credit cards.
Director Kevin Smith funded Clerks in part by maxing out several credit cards. Actor Richard
Hatch also financed his production of Battlestar Galactica: The Second Coming partly through
his credit cards, Famed hedge fund manager Bruce Kovner began his career (and, later, his firm
Caxton Associates) in financial markets by borrowing from his credit card. UK entrepreneur
James

Can financed his first business using several credit cards.

IV.3.3 PROBLEMS

Travelers from the U.S. had encountered problems abroad because many countries have
introduced smart cards, but the U.S. had not. As of 2010, the U.S. banking system had not
updated the cards and associated readers in the U.S., stating that the costs were prohibitive. As
of 2015, the smart cards had been introduced and put into use in the United States. Other
problems with credit cards have involved mis-sold policies on top of the products, such as the
additional sold policies which is still causing problems for clients in the UK.

IV.4. DEBIT CARD

IV.4.1 INTRODUCTION

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.

Some cards may bear a stored value with which a payment is made, while most relay a message
to the cardholder's bank to withdraw funds from a payer's designated bank
 account. In some cases, the primary account number is assigned exclusively for use on the
Internet and there is no physical card.

Unlike credit and charge cards, payments using a debit card are immediately transferred from
the cardholder's designated bank account, instead of them paying the money back later.

Debit cards usually also allow for instant withdrawal of cash, acting as the ATM card for
withdrawing cash. Merchants may also offer cashback facilities to customers, where a customer
can withdraw cash along with their purchase.

IV.4.2 BENEFITS & FEATURES OF DEBIT CARDS

BENEFITS OF THE DEBIT CARD

• FREE wry 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 bank does
not need to investigate 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. I O, 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 traveler, we don't need to stock up on Traveler’s 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 state mint 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.

WIDELY ACCEPTED, INTERNATIONALLY VALID

2. FEATURES OF DEBIT CARD

The following are features of Debit cards:

A) 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, Carte Blue in France, EC electronic
cash (formerly Eurocheque) in Germany, UnionPay in China, Repays in India and EFTPOS cards
in Australia and New Zealand. The use of a debit card system allows operators to package their
product more effectively.

B) The Debit Card services in meant for withdrawals against the balance already available in
the designated account.

C) It is the card holder's obligation to maintain enough balance in the designated account to
meet withdrawals and service charges.
D) 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,

E) No credit check is required to get a Debit card.

IV.4.3 TYPES OF TRANSACTIONS

There are currently three ways that debit card transactions are processed:

EFTPOS (also known as online debit or PIN debit),

2. offline debit (also known as signature debit) and

3. The Electronic Purse Card System.

One physical card can include the functions of all three types, so that it can be used in several
different circumstances.

Although the four largest bank card issuers (American Express, Discover Card, MasterCard, and
Visa) all offer debit cards, there are many other types of debit card, each accepted only within a
country or region, for example Switch (now: Maestro) and Solo in the United Kingdom, Interact
in Canada monitoring customer spending.

IV.4.3.1 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; some online cards require such authentication
for every transaction, essentially becoming enhanced automatic teller machine (ATM) cards.
One difficulty with 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.

IV.4.3.2 OFFLINE DEBIT SYSTEM

Offline debit cards have the logos of major credit cards (for example, Visa or MasterCard) or
major debit cards (for example, 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.

IV.4.3.3 PREPAID DEBIT CARD

Prepaid debit cards, also called reloadable debit cards or reload able prepaid cards, are often used
for recurring payments. The payer loads funds to the cardholder's card account. Prepaid debit
cards use either the offline debit system or the online debit system to access these funds.
Particularly for companies with many 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 affiliate networks (Media Whiz) have all started
offering prepaid debit cards for their contributors/freelancers/vendors.

IV.4.4. IMPACT OF GOVERNMET- PROVIDED BANK

ACCOUNT

In January 2016, the UK government introduced fee-free basic bank accounts for

all, having a significant impact on the prepaid industry, including the departure of several firms.

IV.4.5. CONSUMER PROTECTION

Consumer protections 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. This may lead them
to "steer" customers to debit transactions. Consumers disputing charges may find it easier to do
so 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 and
credit cards.

In some countries, like India and 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 networks, but rather with the bank's
judgement of the person's age and credit records. Any fees that the customers must pay to the
bank are the same regardless of whether the transaction is conducted as a credit or as a debit

transaction, so there is no advantage for the customers to choose one transaction mode over another
swiping.
IV.4.6 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 expatriated workers to send money
home to their families holding an affiliated debit card.

IV.5. CHARGE CARDS

With charge cards, the cardholder 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
cardholder'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 charged on charge cards and there is usually no
limit on the total amount that may be charged. If payment is not made in full, this may result in a
late payment fee, the possible restriction of future transactions, and perhaps the cancellation of the
card.

IV.6. FLEET CARD

A fleet card is used as a payment card, most commonly for gasoline, diesel and other fuels at gas
stations. Fleet cards can also be used to pay for vehicle maintenance and expenses, at the discretion
of the fleet owner or manager. The use of a fleet card reduces the need to carry cash, thus increasing
the security for fleet drivers, the elimination of cash also helps to prevent fraudulent transactions
at the fleet owner's or manager's expense,

Fleet cards provide convenient and comprehensive reporting, enabling fleet owners/managers to
receive real time reports and set purchase controls with their cards, helping to keep them
informed of all business-related expenses.
IV.7. SMART CARD

Smart card used for health insurance in France. A smart card, chip card, or integrated circuit card
(ICC), is any pocket-sized card with embedded integrated circuits which can process data. This
implies that it can receive input which is processed — by way of the ICC applications — and
delivered as an output. There are two broad categories of ICCs. Memory cards contain only non-
volatile memory storage components, and perhaps some specific security logic. Microprocessor
cards contain volatile memory and microprocessor components. The card is made of plastic,
generally PVC, but sometimes ABS. The card may embed a hologram to avoid counterfeiting.
Using smart cards is also a form of strong security authentication for single sign-on within large
companies and organizations. EMV is the standard adopted by all major issuers of smart payment

IV.8. PROXIMITY CARDS

Proximity card (or proxy card) is a generic name for contactless integrated circuit devices used for
security access or payment systems. It can refer to the Older 125 kHz devices or the newer 13.56
MHz contactless RFID cards, most commonly known as contactless smartcards.

Modern proximity cards are covered by the ISO/IEC 14443 (proximity card) standard. There is
also a related ISO/IEC 15693 (vicinity card) standard. Proximity cards are powered by resonant
energy transfer and have a range of 0-3 inches in most instances. The user will usually be able to
leave the card inside a wallet or purse. The price of the cards is also low, usually US$2—$5,
allowing them to be used in applications such as identification cards, keycards, payment cards and
public transit fare cards.
 IV.9. RE-PROGRAMMABLE MAGNETIC STRIPE CARD
Re-programmable/dynamic magnetic stripe cards are standard sized transaction cards that include
a battery, a processor, and a means (inductive coupling or otherwise) of sending a variable signal
to a magnetic stripe reader. Reprogrammable stripe cards are often more secure than standard
magnetic stripe cards and can transmit information for multiple cardholder accounts,

IV.10. ATM CARD

IV.IO.I INTRODUCTION

An ATM card is any payment card issued by a 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 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 cards.

IV.10.2 DIMENSIONS

The size of ATM cards is 85.60 mm x 53.98 mm (3,370 in x 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 payment cards, such as credit, debit and other cards. They also have a
printed or embossed bank card number conforming with the ISO/IEC 7812 numbering standard.
IV.10.3 ATM USES

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 Iso 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 postage stamps.

IV.10.4 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 transaction, or a non-pin-
based credit-card transaction if the merchant is affiliated with the credit or debit card network of
the card's issuer. Banks have long argued with merchants over the fees that can be charged by
the bank for such transactions. Even though ATM cards require a PIN for use, banks have decided
to permit the use of a non-PIN based 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 inquiries, electronic bill
payments, or in some cases, online purchases.

IV.10.5. MISUSE

Due to increased 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.
 b. RECHARGEABLE CALLING CARDS

IV.11.1 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. The rechargeable calling card is
a specialized form of 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
time as making a call,

After transferring funds to the card company, the ID can be provided electronically by email, by
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 effected
in any manner that funds can be transferred to the company.

IV.11.2 RECHARGING

Cards can be recharged or topped up in a variety of ways:

• Credit card
• Cash at convenience stores/corner shops
• Swipe card machines
• Internet
• Coupons
• Bank account
• Debit card
IV.11.3 A CARDLESS FUTURE

As international travel became cheaper and more people started to travel the international phone
card became an essential part of a travelers' itinerary, previously customers would have to carry
one or more cards when traveling and the cards could only be used in certain phones. Phone
companies such as Pure Minutes began to release "cordless" 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.

IV.12. STORE -VALUE CARD

IV.12.1 INTRODUCTION

A stored-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 stored- value cards and debit and credit cards is that debit
and credit cards are usually issued in the name of individual account holders, while stored-value
cards may be anonymous, as in the case of gift cards. Stored-value 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 card, 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 maintained 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 entering a 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, Visa payWave, American Express Pay and Discover Zip.

IV.12.2. 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 cards in that when making, say,
a purchase telecommunication facility is 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 be a reference to the bank for processing, A
limitation is that these cards cannot be used for online, telephone, mail order and other "card not
present transactions". The German Geldard and the Austrian Quick card can also be used to
validate a customer's age at cigarette vending machines.

IV.13. PREPAID CARDS

IV.13.1 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 gift cards or store cards. These cards are

typically purchased to be used as gifts and are increasingly replacing the traditional paper gift
certificate. Generally, few if any laws govern these types of cards. Card
issuers or sellers are not required to obtain a license. 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 an asset. Consequently, gift certificates and merchant gift cards
have fallen under state escheat or abandoned property 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 a service fee.

IV.13.2 SEMI-CLOSED SYSTEM PREPAID CARDS

Semi-closed system prepaid cards are like 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 than the retailer who accepts the card. Examples include university
cards and mall gift cards. The laws governing these types of cards are unsettled. Depending on the
state, the issuer may or may not be required to have a money transmitter license or other similar
license.

Under 18 USC section 1960, it is a crime for an issuer to conduct a money transmitting business
without a license. Cardholders generally suffer from the Same redressability problems that
closed system card holders suffer. It is unclear whether Chapters 7 and Il of the Bankruptcy code
are applicable to these types of cards.

MONEY LAUNDERING

It is common for countries to place limits 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.
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 U.S. Congress are considering creating laws that
would require travelers crossing, entering, or leaving the country to report these cards. The
Financial Crimes Enforcement Network of the U.S. Department of the Treasury has published a
notice of proposed rulemaking on stored- value cards in the June 28, 2010 edition Of the Federal
Register, the proposed rules would require sellers of prepaid cards to register with the
government and keep records on transactions and customers.

IV.14. GIFT CARDS

IV.14.1 INTRODUCTION

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 store or related businesses. Gift cards are also given out
by retailers and marketers as part of a 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 purchases at the relevant retail

premises and cannot be cashed out, and in some situations may be subject to an expiry date or fees.
Visa and MasterCard credit cards produce generic gift cards which need not be redeemed at
stores, and which are widely used for cashback marketing strategies. A feature of these cards is
that they are generally anonymous and are disposed of when the stored value on a card is
exhausted.
 IV.14.2. FUNCTIONS AND TYPES

A gift card may resemble a credit card or display a specific theme on a plastic card the size of a
credit card. The card is identified by a specific number or code, not usually with an individual
name, and thus 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 thus 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 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 thus are generally not stored-
value cards as used in many 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 a 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 how greatly they are appreciated.

Bank-issued gift cards may be used in lieu of checks to disburse rebate funds. Some retailers use
the gift card system for refunds in lieu Of cash thereby assuring that the customer will spend the
funds at their store.

A Charity Gift Card allows the gift giver to make a charitable donation, and the gift recipient to
choose a charity that will receive the donation.
 IV.15. ATVM CARD

11.15.1 INTRODUCTION

Long hour 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 use 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 I 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 and initial amount of Rs. 100, from which the first-time usable amount will be
Rs.52 to 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. I O as 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 cards 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 within I hour
limited time using this card tickets.

Railway authority offer 5% extra on every recharge to promote more usage of this

IV.15.2 ATVM Machines - FACTS AND FIGURES

Out of about I million daily ticket buyer local train travelers, 13 to 15 percent of them use this
smart card. 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 on Main Line, 43 on Harbor
Route and 6 at Trans-Harbor 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 possibly in early 2014.

11.15.4 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.

The time printed on Ticket by validating machine is generally rounded in hour (60 minutes), So
if for example the Machine 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
I hour duration time which calculates the total journey valid time as I Hour (As per ticket rules)
and 55 minutes extra,
We really don't know if the new ATVM machines will have this facility kept of be removed with
printing exact timings Of I hour valid journey,

l. 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.
3. No queue to purchase smart card or recharge same,
4, No Huge queue at ATVM machines, as practically CVM coupons are more widely used too.
 CHAPTER V:
DATA ANALYSIS AND INTERPRETION

B. PRIMARY DATA
DATA COLLECTION AND RESEARCH ANALYSIS

The primary data was collected by conducting a survey by circulating an E-form/ questionnaire
among several people. In which 35 individuals have responded.

Q 1. GENDER*

 MALE
 FEMALE

INTERPRETATION:

According to the survey, 48.6% of the respondents are Male and 40% are Female & others
are not interested.

Q2. AGE*

 15-20
 21-25
 26-35
 OR above
Q 3. ANNUAL INCOME

 Upton Rs.180, OOO

 180,000- 300,000
 300,000- 500,000

INTERPRETATION:

According to the survey, 57.1% Of the respondents were earning an annual income up to
180,000 lakh Rs,

While 25.7% Of the respondents were having annual income between 180,000 & 300,000 lakh
and 17.1% of the respondents have an annual income of 300,000- 500,000 lakh.
Q4. Do you have any idea about plastic money? which of them are you aware of?

INTERPRETATION:

According to the survey, 88.4% of the respondents do know what PLASTIC MONEY is. And
about I of respondents are confused about the ten and around 11.4% of the respondents sincerely
don 't know about the term PLASTIC MONEY.
Q 5. Do you have any of them?

INTERPRETATION:

According to the survey, 60% Of the respondents have debit card and 25.7% respondents have
credit card; 14.3% have special outlet card.
Q.6. According to you, which is the most convenient way to pay?

o PAPER MONEY (CASH)

o PLASTIC MONEY (CREDIT CARD)

INTERPRETATION:
According to the survey, 54.3% of the respondents claim that both is the most convenient way to
pay. Whereas, 14.3% of the respondents say that PAPER
MONEY is the most convenient way to pay&31.4% of the respondents say that plastic money is
the most convenient way to pay.
Q 7. HOW DO YOU PREFER TO PAY YOUR UTILITY BILL?

 CASH
 CARD
 CHEQUE
 ONLINE

INTERPRETATION:
According to the survey, 28.6% of the respondents say that they prefer to pay their utility
bill with cheque; 28.6% say they would pay with online and around 25.7% respondents
say they would prefer to pay their utility bill via card& 17.1% respondents say they would
prefer to pay their utility bill by cash.
Q.8 How do you make payment of purchases made of household consumables?

 CASH
 CARD
 CHEQUE

According to the survey, 51.4% claim that they would prefer to pay via card for their
purchases towards household consumables;
Whereas 22.9% say they would make payment with cheque and 25.7% say that they
would prefer to make payment with cash
Q.9. HOW DO YOU MAKE PAYMENT FOR THE PURCHASES OF
LUXURY? AND DURABLE GOODS?

 CASH
 CARD
 CHEQUE

 INTERPRETATION

According to the survey, 42.9% Of the respondents claim that they would make payment towards
purchase of luxury and durable products via card
Whereas, 34.3% claim that they would make purchase with cheque and other 22.9% say they
would pay by cash.
 Q.10. WHILE TRAVELLING ACCORDING TO YOU WHICH IS THE
PREFFERED WAY OF PAYMENT?

 CASH
 CARD
 TRAVELLERS CHEQUE
 CHEQUE
 DD

According to the survey, 34.3% of the respondents say that they would prefer to make payments
while travelling by means of card; while 31.4% claim that they would pay with travelers’ cheque
and a 17.1 % say that they would use cash,14.3% of respondents say that they would use DD.
Q.11. DO YOU FIND THE USE OF CREDIT? PLASTIC MONEY TO BE SAFEST
MODES OF TE TRANSACTION?

 YES
 NO
Q.12. WHY DON’T YOU PREFER PLASTIC MONEY?

 UNSTABLE INCOME
 LACK OF KNOWLEDGE
 MALPRATICES BY OULET OWENER
 MALPRACTICES BY BANKER
 MISSUSE OF OTHER

 INTERPRETATION

According to the survey, 45.7% of the respondents say that they have lack of knowledge; while
31.4% claim that they sure for misuse of others, and a 11.4 % say that they are sure for
malpractices by outlet owner and unstable income.
 CHAPTER V: CONCLUSION

Card makes economy more efficient. It helps user to do transaction whenever he wants.
The amount of black money injected every year in our Indian economy is unaccounted
for and is to pervasive as we know it. Thus reforming the informal sector is a task that
will require persistence efforts and revised intellectual engagement in coming up with
sustainable solutions and one of them is the mode of using plastic money such as credit
card, debit card, ATM card, rechargeable calling card, store value cards, gift cards, flit
card, ATVM cards etc. which helps to curb black money.

o In the last two years, spending pattern through plastic money has changed
drastically.

o Travelling, dining and jeweler are the top three purchases that Indian makes
through credit cards.
o Fuel accounts for a very small proportion of credit card purchases as these are largely paid
through debit cards.
o Consumers were not only more open to the possibility of owning a financial card
but were also more than willing to use their cards to settle dues. The status symbol
aspect of owning and using cards too played its part on bringing about such robust
growth over the space of a single year.
o Consumers are preferring these cards mostly for shopping online ecommerce has
given a better way to use the plastic money.
o According to projections for the 2003-2016 periods the number of financial cards
in circulation will register a compounded annual growth rate of nearly 510/0 and
the satisfaction of consumers has also increased.
o There are many ethical issues and challenges for plastic money issuing banks/
companies,
o At last it is concluded that plastic money has a very bright future in the coming
years because Of the trend of E- commerce.
 SUGGESTIONS

Based on analysis, the following suggestion can be given to on increase the Plastic Card
usage: -

l. It was found that people don't prefer to pay their utilities bills like Telephone bills,
Electricity Bills etc. by cards. In the changing scenario of today where everything is
going paperless and cashless, there is a great need to educate and motivate the people to
pay their utility bills by Plastic money.
2. Safety measures pertaining to the fund transfer need to be increased to encourage and
assure people so that the use of Plastic money increases.
3. Safety in Plastic money is an important factor that induces its usage. Multiple
level of security to be insured like Password, OTP (One Time Password), use of HTTP
instead of http etc.
4. Transactions charges on online transactions should be waived off to induce the
people to use Plastic cards more.
5. Subsidy on Electronic transactions can also lead to increased usage of Plastic cards.
6. People should be motivated to make more use of Plastic cards while travelling. Travel
Companies can give discounts to lure the customers to make the use of Plastic cards.
7. It can play a very important role and in fact a major role in the eradication of
corruption in India. These are the reasons that how are it possible: -

• Every money transaction is maintained and recorded, and the transactions of crores and
crores of money cannot go unrecorded.
• None of money transactions are illegal. As, all the money transfer and transaction happen
through bank accounts, none of the illegal money can be transferred.
• The number of fraudulent money Practices are reduced as no fake paper notes can be
printed as they are not useable.
 BIBLIOGRAPHY

 HTTP://WWW.MBASKOOL.COM

 HTTP://WWW.STUDYMODE.COM

 HTTP://BUSINESS-FINANCE.BURTIT.COM

 WWW.RBI.ORG

 WWW.WIKIPEDIA.COM

 WWW.INFOSEE.COM

 WWW.INDIAMBA.COM

 WWW.INDIABANKING.COM
 QUESTIONNAIRE

I. Gender?
 Male
 Female
2. Profession?

 Student
 Govt employee
 Business
 Service
 Other
3. Annual income?
 Upton 180,000
 180,000- 300,000
 300,000 - 500,000rs
4. DO you have any idea about plastic money? Which Of them are you aware of?
 Credit card
 Debit card
 ATM card
 Others o All of them

5. Do you have any of them?

 Debit card
 Credit card
 Specific outlet card

6. According to you, which is the most convenient way to pay?

 Cash
 Card
 Both
 7. How do you prefer to pay your utility Bills?
 Cash
 Card
 Cheque
 Online

8. How do you make payment for purchases of household consumables?

 Cash
 Card
 Cheque

9. How do you make payment for purchases of luxury and Durable goods?
 Cash
 Card
 Cheque

10. While traveling, according to you which is the preferred way of payment?
 Cash
 Card
 Travelers cheques
 Cheque
 DD
11. Do you find the use of credit card/Plastic money to be safest modes of the
transaction?

 Yes
 No

12. Why don't you prefer plastic money?

 Unstable income
 Lack of knowledge
 Malpractices by outlet
 owners o Malpractices by
Bankers
 Misuse by others