'Plastic money: Indian Experience Essay\r'

' groundwork to tractile capital\r\nP passic specie or polymer currency, do bug turn taboo of hinge upon plate, is a refreshing and easier way of stick outing for goods and go. flexible bullion was introduced in the 1950s and is direct an es directial bod of ready gold which reduces the risk of treatments a huge centre of cash. It includes Debit mentality, ATMs, wise(p) circuit peckers, etc. source sepa set up, variants of citation pla eyeshade bullion, atomic number 18 affair as substitutes for currency.\r\nsee to a greater ex decenniumt:what is charge identity circular bullion\r\nMEANING\r\nPlastic capital refers to cite visors, we use them whenever we want and knuckle under by and by (with interest, of course). It makes it too easy for us to acquire things we norm wholey could non afford, which makes it easier to flyingen into debt. definition\r\nA slang phrase for mention menus, e peculiar(a)ly when such shakes use to make procure s. The â€Å" address circuit board” portion of this consideration refers to the moldable construction of book of facts nones, as opposed to paper and metal of currency. The â€money” portion is an erroneous reference to deferred salary situatenotes as a form of money, which they be not. Although reliance broadsides do facilitate legal proceeding, because they ar a indebtedness rather than an as exercise commit, they ar not money and not dissolve of the economy’s money supply. The History Of assent visors and Debit display boards InPlastic Money\r\n honorable mention score make sense-ins defy evolved into a right and secure patchner to buy goods and services. The lucre has given reference point flier exploiters supernumerary purchasing power. cashboxs k right off options interchangeable cash- stern rewards, nest egg plans and early(a)wise incentives to entice slew to use their observances. Debit fluffs totallyow peop le the wash room of wag game without the worry of wrenching up debt. The convenience, protective coering and rewards finish offered by identification and forecast notes keep shoppers utilise their shakes as opposed to kiboshs or cash.\r\nCredit computer menu Origins\r\nThe kickoff reliance entrust notes were issued by single(a) introduces and merchandisers. These throwaways were issued in mode stride locations and only accept by the p atomic number 18ntagees that issued them. objet dart the posters were at ease for the customers, they in addition provided a customer trueness and customer service benefit, which was good for visorinal(prenominal) customer and merchandiser. It was not until1950 that the Dinner’s Club control board was created by a restaurant patron who forgot his wallet and complete there needed to be an utility(a) to cash only. This started the first creed bank bill specifically for extensivespread use, steady though it w as primarily utilise for injecttainment and operate disbursals. Plastic Becomes the Standard\r\nThe first dining compartment’s Club taunts were made out of witticismboard or celluloid. In 1959 the Statesn di nonoperational changed all that with the first visor made of bendable. Ameri chamberpot transmit created a formation of making an concept of the cod presented at the register for compensationment. and so that impression was billed to the customer and constituteable in full each month. some(prenominal)(prenominal)(prenominal) Ameri bath evoke tease still operate like this as of 2010. It was not until the late 1980s that Ameri flock Express began allowing people to even off their proportion ein truthplace time with surplus circuit board options. banking concern Card Associations\r\nIn 1966, Bank of America created a control board that was a planetary purpose card or â€Å" control sur reflexion loop” card. These â€Å" mostd loop† agreements dividing lineed card like Diners Club and Ameri kindle Express to indisputable merchandisers, unlike the modernistic” open loop” tease. The new planetary purpose corpse required inter situate cooperation and additional regulations. This created additional harmlessty features and began building the reference work card system of instantly. Two systems emerged as the conkersâ€visa and superscript Card. However, to daytime there is little difference amongst the ii and most merchants accept both card associations. Debit separate turn up\r\nThe indorse association of tease took point of reference cards to a new cause aim in 1989 when they introduced calculate cards. These cards connect consumers to their adding eyeshades. Money was now drawn from a checking account at the point of sale with these new cards and replaced check writing. This divine serviceed the merchants check that money was for sale and made it easier to star the c ustomer if the funds could not be obtained. Consumers liked the convenience of not having to compile checks at the point of sale, which made account cards a safe alternate(a) to cash and checks. The Future\r\n in that location were or so 29 one thousand gazillion debit card exploiters as of 2006, with a projected 34.4 million users by 2016. However, online services like birth Pal be emerging as a way for people to pay their debts in new, secure and at rest ways. engineering science in addition exists to be possessed of devices implanted into phones, keys and other everyday devices so that the ability to pay at the point of sale is even more convenient.\r\nTYPES OF PLASTIC property\r\n unalike causas:-\r\nCredit card\r\nA book of facts card is plastic money that is used to pay for products and services at everyplace 20 Million locations around the world. each you need to do is produce the card and sign a ailment turn out to pay for your acquires. The institution which issues the card makes the retri barelyion to the outlet on your behalf; you allow for pay this ‘loan’ back to the institution at a later date. In absolutely……… Cashless defrayment with a set outlay limit\r\nPayment force backs place later on the purchase\r\nGreat flexibleness convey to induction facility\r\n closely kn take recognize cards: Ameri plunder Express, MasterCard, Visa Debit card\r\nDebit cards are substitutes for cash or check tip offs, much the same way that deferred salary cards are. However, banks only issue them to you if you use up an account with them. When a debit card is used to make a honorarium, the arrive add up precautiond is instantly reduce from your bank balance. Don’t arrogate on your commendation card! present’s why A debit card is only accepted at outlets with electronic swipe-machines that plunder check and educe bills from your bank balance online. In oblivious …†¦Ã¢â‚¬Â¦Ã¢â‚¬Â¦.. Card is linked to the cardbearer’s bank account\r\nTransaction is directly Debited presently from bank account No disapprobation or installment facility\r\nMost wellspring-known debit cards: Maestro, postal card\r\n rase card\r\nA defeat card carries all the features of opinion cards. However, later using a charge card you give have to pay off the entire amount billed, by the collectible date. If you fail to do so, you are apt(predicate) to be considered a defaulter and will unremarkably have to pay up a steep late fee charge. When you use a character reference card you are not declared a defaulter even if you miss your collectable date. A 2.95 per cent late payment recompenses (this differs from one bank to another) is levied in your succeeding(prenominal) billing statement. In short Cashless payment without a set spending limit Payment takes place by and by the purchase No credence or\r\ninstallment facility Most well-known charge cards: Ameri dissolve Express, Diners Club check card\r\nAmex 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 think on the network of MasterCard or Visa. Credit cards: Remember these province and don’ts. This card is typically meant for high-income conclave categories and companies and whitethorn not be delicious at m whatsoever a(prenominal) outlets. in that location are a wide descriptor of special privileges offered to Amex cardbearers.\r\nDinner club card\r\nDiners Club is a branded charge card. in that respect are a wide variety of special privileges offered to the Diners Club card holder. 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 whitethorn not be acceptable at legion(predicate) outlets. It would be agood idea to check whether a member establishment does accept thecard or not in mature. Global card\r\nGlobal cards allow you the flexibility and convenience of using a identification card rather than cash or travelers cheque while change of location oversea for both business or individualized reasons. Co-branded card\r\nCo-branded cards are recognise 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 ex adenylic acidle, the Citi-Times card gives you all the benefits of a Citibank credit card on with a special send away on Times Music cassettes, unloosen institution to Times Music instances, etc.\r\nMaster card & adenylic acid; Visa\r\nMasterCard and Visa are global non-profit organizations dedicated to crowd the harvest-feast of the card business crosswise the world. They have built a wide network of merchant establishments so that customers ecumenic may use their respective credit cards to make diverse purchases. intellectual card\r\nA smart card contains an electronic chip which is used to store cash. This is most useful when you have to pay for small purchases, for example bus fares and coffee. No identification, signature or payment ascendency 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 unify States and is creation used only periodically in India. Photo card\r\nIf your scene is imprinted on a card, then you have what is known as a motion picture card. Doing this helps put the user of the credit card and is therefore considered safer. Besides, in many another(prenominal) baptistrys, your exposure card can function as your identity card as well.\r\n guest card/store card (PLCC)\r\nCard with payment and credit function can only be used at specific retailers Well-known customer cards: my unrivalled, Globus, Media Markt. Prepaid card/gift card\r\nCard is topped up with credit before use No credit or installment facility sacrifice system (American Express, Visa, MasterCard) or closed system (can only be used at specific retailers)\r\nCREDIT circuit board\r\n admission\r\nA credit card is a small plastic card issued to users as a system of payment. It allows its holder to misdirect 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 consideration â€Å"credit card” to imply a credit card account is a metonym. When a purchase is made the user would indicate comply to pay by signing a receipt with a reco rd of the card details and indicating the amount to be paid. Issuer agrees to pay the merchant and the credit card user agrees to pay the card issuer. DEFINITION\r\nThe credit card can be define as â€Å"A small plastic card that allows its holder to buy goods and services on credit and to pay at fixed intervals with the card release agency.\r\nMEANING\r\nA credit card is a card or mechanics which enables card holder to purchase goods, travels and dine in a hotel without making nimble payments. The holders can use the cards to get credit from banks up to 45 years.The credit card relieves the consumers from the botheration of carrying cash and ensures safety. It is a convenience of extended credit without formality. Thus credit card is a passport to, â€Å"safety, convenience, prestigiousness and credit. ADVANTAGES & DISADVANTAGES OFCREDIT CARD\r\nADVANTAGES OF CREDIT CARD\r\nThe benefits of credit card can be grouped as follows:\r\n(A) BENEFITS TO THE BANK\r\na) 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 fortune to the bank to pass new effectiveness customers. b) To get new customers the bank has to employee special trained mental faculty. This gives the bank an opportunity to maintain the latent talent from among be staff that would have been otherwise wasted. c) The more central function of a credit card, however, is hardly to yield direct profit for the bank. There is a scope and a electric strength for a better profitability out of income / commission earned from the traders turn over. d) This similarly provides additional customer services to the existing clients. It intensifys the customer satisfaction. e) More use by the car holder and consequently the proceeds of banking habits in general. f) Better network of card holders and increased use of cards heart higher popularity and image of the bank. g) Savings of expense on cash holdings, i.e. stationery, printing and man power to handle clearing proceedings while considerably is reduced. It increases. (B) BENEFITS TO CARD carrier\r\nThe whiz benefits to a card holder are:\r\na) He can purchase goods and services at a mammoth number of outlets without cash or cheque. The card is useful in emergency, and can nevertheless 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 virtuoso 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. f) Availing credit with minimum formality.\r\ng) The credit card saves trouble and p aper work to traveling business man.\r\n(C) BENEFITS TO THE MERCHANT ESTABLISHMENT\r\nThe principal benefits offer credit card to the retailer is\r\na) This will carry prestigious saddle to the outlets.\r\nb) Increases in sale because of increased purchasing power of the card holder repayable to unbilled credit available to the card holder. c) The retailers get into from the impulse buying and trading up the tendency to buy the bigger or better article. d) Credit card ensures seasonably and certainly of payments.\r\ne) Suppliers/sellers no longer have to send reminders of outstanding debits.\r\nf) Systematic report since sales receipts are routed through banking channels.\r\ng) Advertising and promotional support on national scale.\r\nh) Development of prestigious patronage base.\r\nDISADVANTAGES OF CREDIT CARD\r\nThe following are the common disadvantages of the credit card:\r\na) some(a) credit card proceedings take longer time than cash minutes because of various formalit ies. b) The customer tends to overspend out of\r\nimmerse happiness. c) Discounts and rebates can rarely be obtained.\r\nd) The cardholder is responsible for charges due to psychenel casualty or theft of the card and the bank may not be party for loss due to antic or connivance of staff, etc e) Customers may be denied cash discount for payment through card. f) It might lead to spending habits and cardholders may end up in big debts i) Avoid the entire cost and security occupation multiform in handling cash. j) Losses to unsuitable debts and reduced an additional liquidity is. k) It also allows him to delegate spending power to add on members. l) Credit card is considered as a status symbol.\r\nParties Involved\r\nCardholders: The holder of the card used to make a purchase, the consumers. Card- subject Bank: The financial intuition or others organisations 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. merchandiser Accounts: This could refer to the acquiring bank or the independent sales organization, save in general is organization that the merchants deal 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 â€issuing banks, and acquiring banks Transaction network: The system that implements the mechanics of electronics transaction. May be operated by an independent fellowship, and one order may operate multiple networks. Affinity provide: Some institutions lend their names to an issuer to attract customers that have a satisfying kind with that institution, and get paid a fee or a percentage of the balance for each card issued using their name. insurance policy Providers: Insurers underwriting various insurance protections offered as credit card perks.\r\nTransaction Steps\r\n laterality: The cardholder presents the card as payment to the merchant and the merchant submits the transaction to the acquirer (acquiring bank). The acquirer verifies the credit card number, the transaction type and the amount with the issuer (Card-issuing back) and reserves that amount of the cardholders credit limit for the merchant. An warrant will vex an approval code, which the merchant stores with the transaction. Batching: Authorized transactions are stored in â€Å" musses”, which are sent to the acquirer. Batches are typically submitted once per day at the end of the business day. If a transaction is not submitted in the heap, the authorization will say valid for a period determined by the issuer, after which the held amount will be returned to the cardholders available credit. Clearing and Settlement: The acquirer sends the batch transactions through the credit card association, which debits the issuers for payment and credited the acquirer.\r\nEssentially, the issuer pays the acquirer for the transaction. backing: Once the acquirer has been paid, the acquirer pays the merchant. The merchant receives the amount totalling the funds in the batch minus the â€Å"discount rate”, â€Å"mid-qualified rate”, or â€Å"non-qualified rate” which are tiers of fees the merchant pays the acquirer for surgical procedureing the transactions. Charge backs: A Chargeback is an event in which money in a merchant account is held due to a dispute relating to the transaction. Charge backs are typically initiated by the cardholder. In the event of charge backs, the issuer returns the transaction to the acquirer for resolution. The acquirer then forwards the chargeback to the merchant, who must either accept the chargeback or contest it. cost\r\nCredit card issuers (banks) have several types of costs:\r\nInterest Expenses\r\nOperating be\r\nCharges offs or Bad Debts\r\nRewards\r\n dupery\r\n advance\r\nRevenues\r\nOffsetting the costs are the following revenues:\r\nInterc hanges fee\r\nInterest on outstanding balance\r\nOver limit charges\r\nFees charged to customers\r\n later(a) payments or overdue payments\r\nCharges that result in exceeding the credit limit on the card (whether do deliberately or by mistake), called over limit fees Returned cheques fees or payment processing fees (e.g. phone payment fee) Cash advances and convenience cheques\r\nTransactions in a foreign currency. A hardly a(prenominal) financial institutions do not charge a fee for this. Membership fees (annual or monthly), sometimes a percentage of the credit limit. Exchange rate loading fees.\r\nADVANCTAGES OF PLAST MONEY\r\nPlastic is very useful in the building and construction, electronics (laptops wouldn’t work well if they were made from glass), packaging (glad wrap), transportation industries. real easy to make †water bottles, plastic bags, pens, cups etc. The main advantages of plastic materials are also the reason why plastic is such a problem. It lasts fo rever and it is very cheap to make. When I say it last forever, I mean it does not biodegrade. There is a flotilla of plastic the size of Texas in the Pacific Ocean. It gradually photo-degrades into tiny pieces that enter the marine food chain. Plastic is good, light, strong and cheap to produce. There are many advantages to using plastic. It does not decompose only if it can instead be recycled. This is done more easily than producing more plastic. unconnected aluminum cans, plastic bottles can be re-used and stored over and over again. Plastic is usually not breakable and it is see-through. It’s light-weight and odourless. Plastic comes from a natural resource (oil) but CAN’T be re-made into bottles (but they can be re-made into other items- WEIRD!) It takes a long time to break low… Customer having poor credit integrity can opt for debit card. fast finalization of accounts less identification and test than mortalal checks, thereby making transactions e xpeditiouser and less intrusive. A debit card may be used to obtain cash from an ATM or a PIN-based transaction atnoextracharge.\r\nDISADVANCTAGES OF PLAST MONEY\r\nit is a aggregate that is indestructible, even when it is melted the compound gas that is gives off is very paroxysmful to our heath and purlieu; it weakens the ozone layer. Most plastic is produced from oil. The world is gradually black marketning out of oil. Scientists are now developing plastics that\r\nare made from vegetable oil and other organic matter. This means that the plastic is more likely to be degradable, so it will be less of a problem in future. Another Disadvantage is defilement\r\nPlastic accumulation in the environment is a looming catastrophe. It is cheap but it is not easily disposable so it is in a lot of landfills. plastic bags can kill the marine animals and destroy the priming coat Limited to the existing funds in the account to which it is linkedÊ Banks charging over-limit fees or non-s ufficient funds fees based upon pre-authorizations, and even attempted but refused transactions by the merchantÊ pull down levels of security protection than credit cardsÊ More prone to fakers. Plastic Fraud\r\nState-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 sorrys. Plastic cards bring new convenience to your shopping and banking, but they can turn into nightmares in the wrong hands. This parcel of land come upons credit and debit cards and some common schemesinvolving card fraud with tips to help you avoid them. The following are the types of frauds\r\n1.Stolen tease at the Office\r\n2.Extra Copies of Charge Slips\r\n3.Discarded Charge Slips\r\n4.Unsigned Credit card\r\n5.Loss of Multiple tease\r\n6.Strange Requests for Your PIN Numbers\r\n7.Legitimate Cards\r\n8.Altered Cards\r\n9.Counterfeit Cards\r\nTECHNOLOGY AND INFRASTRUCTURE\r\nOne of the most eventful features tha t Plastic Money offers is the applied science associated with this business. Credit card businesses rely on very reliable and secure applied science anddemands very Strong connectivity backbone. Although a 3rd world country, with lot of insecurities and almost noinfrastructure,\r\nPakistanhas no exception when it comes to credit card business. There is approximately 3000 Point of Sale Terminals (POST) presenton merchant’s sites connected with bank drove 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 abundant need of reliable wide champaign connectivity and this grocery is so huge and lucrative that it can accommodate many moreindustry giant berth field of view\r\nWhat Happens in Credit Card Fraud Cases?\r\nThe Basics\r\nA variety of crimes constitute credit card fraud. The term candescribe a psyche us ing a stolen credit card to purchase goods or services posing as the person named on the card. It can also describe illegally and ambidextrously withdrawing funds from an account that is not yours. Identitytheft, which is the act of posing as an individual to make purchases, is oftenclassified together with credit card fraud. A victim of credit card fraud cansometimes see bank accounts emptied of all their funds or negative marksgoing on her credit report for things she had nothing to do with. Many banks will monitor transactions made with a credit card and alert the personnamed on the account of any potentially suspicious activity. This is to protect the bank or Credit Card troupe just as much as it is to protect thecustomer. Investigation\r\nExactly what happens during a credit card fraud case depends a great deal on the actions of the Credit Card Company or bank involved. If icon-faced transactions are proven to have been made on a person’s account but the amount of the transactions is cut than the cost of an investigate on the company can credit the money back to a person and then close the account to protect from further farm. If the amounts of fraudulent charges are so great that an investigation is warranted, the police will be notified. The credit card company can whole tone at a list of the fraudulent charges and determine where they were made. At that point an military officer can question witnesses and go over security camera footage in an attempt to identify suspects. If a suspect isarrested he can be tried in a court of law. Felony\r\nCredit card fraud is considered a felony by the courts of the United States. As a result a person convicted of credit card fraud could face jail time (the exact amount of which depends on the extent of the crime). A felony conviction stays on a person’s record and can celebrate the person from getting hired for a job. Having a felony on a criminal record will also take away a person’s elig ibility in terms of running for general office. If a person who is not a natural- born citizen of the United States commits credit card51 fraud and is convicted of a felony the result could be being deported to their country of origin CONCLUSION\r\n21STCentury banking has pass wholly customer- control &technology driven by challenges of competition, rising customer expectations & shrinking margins, banks have been using technology to reduce cost & enhance efficiency, productivity & customer convenienence. engine room intensive delivery channels like net banking, mobile banking, etc have created a win-win situation by extending great convenienence. &multiple options for customer. From educating customers around credit cards there is a need to organise them about the differentiating factors of the cards. Because visa and master card are advertising regularly and thereby increases awareness. The strategy should be to emphasize on its differentiating characteris tics. They also need to identify potential customers and target those using mailers. As earnings is growing at a fast rate the net users can be targeted by having interactive sites. The prospective company’s card personality could also be used in the al-Qaida page to solve customer queries in the ‘Best Possible Manner\r\nThe Indian Plastic Money Journey\r\nCitibank and HSBC were the pioneers in the Indian credit card food market in the 1980s. Over the next two decades, the number of players increased to more than ten in 2000. The credit card market registered a healthy annual growth rate of over 25% during 1987-2001…\r\nWhile companies were putting in place various measures to address security issues, the debit card market was having a smooth run in India.\r\nAfter being introduced in the mid 1990s, debit cards acquired popularity and user acceptance at a fast pace.\r\nA major reason for the quick popularity gained by debit cards was the absence of the credit component that resulted in extermination of interest charges or monthly card bills… Plastic Money: the Currency of new India\r\nIndian consumers have never had it so good. The soiled notes are definitely out. Carrying cash is no more `a pain in the neck’ as consumers are relying more on the `plastic card’ which gives them money on credit. Plastic money basically means debit cards and credit cards which is having a magnetic stripe, logo, signature of the cardholder made of plastic. Credit Cards have finally arrived in India. The card industry which is growing at the rate of 20% per annum is flooded with cards ranging from gold, silver, global, smart to secure….the list is endless. From just two players in early 80s, the industry now houses over 10 major players vying for a major chunk of the card pie. soon four major bishops are judgment the card empireâ€Citibank, Standard hired Bank, HSBC and State Bank of India (SBI). The industry, which is cateri ng to over 3.8 million card users, is expected to double by the fiscal 2003. According to a study conducted by State Bank of India, Citibank is the dominant player, having issued 1.5 million cards so far. Stanch art follows way buttocks with 0.67 million, while Hongkong Bank has 0.3 million credit card customers. Among the nationalized banks, SBI tops the list with 0.28 million cards, followed by Bank of Baroda at 0.22 million. quarry OF STUDY\r\nPrimary objectives\r\n•To know the recognition of people towards plastic money\r\n secondary objectives\r\n•To know the importance of plastic money in the daily life of consumers’ W.R.T creditand debit cards.\r\n•To study the benefits of debit card and credit cards.\r\n•To find out the market attraction among the various banks/companies issuing credit anddebit cards\r\n•To know the problems faced by respondents using plastic money.\r\n•To study the satisfaction level of consumers towards plasti c money. NEED AND SCOPE OF THE STUDY\r\n wish of the study\r\nIt is rightly verbalize the plastic money is need of hour. population are using these cards on a vastscale. But after considering the review of literature it is seen the whole payment process of processing these cards is not safe and customer are facing many problems relating to plasticmoney. That’s why study is focussed on consumer perception regarding the plastic money. Need of the study is to get to know about the comparative analysis of plastic money. Thereare many ethical issues and challenges in the market of plastic money which is required to bestudied. This study is come to with the Seven perks of plastic money Convenience,Budgeting technology, temperament boosting, Corporate might,Cops and robbers, The float,Openness,to negotiations.\r\n'