HS - Vedant Bhaskar - Analytical Study of Plastic Money in Indian Market

PROJECT REPORT
ON
"ANALYTICAL STUDY OF PLASTIC

MONEY IN INDIAN MARKET"
Bachelor of Management Studies

Semester VI
2021-2022
Submitted by:
VEDANT BHASKAR
TYBMS, A 05
R. A. Podar College of Commerce &

Economics
Matunga, Mumbai 400019
DECLARATION

I, Vedant Sudhakar Bhaskar the student of T.Y.BMS

Semester VI (2021- 2022) hereby declare that I have completed
the project on
" Analytical study of plastic money in Indian Market ".
The information submitted is true and original to the best of
my knowledge.

(Signature of Student)
Vedant Sudhakar Bhaskar
TYBMS A 05
R. A. Podar College of Commerce & Economics
Matunga, Mumbai 400019
CERTIFICATE

This is to certify that Mr./Ms. Vedant Sudhakar Bhaskar, roll
no: 05 of Third Year BMS, Semester VI (2021- 2022) has
successfully completed the project on “Analytical Study of
Plastic Money in Indian Market” under the guidance of Mr.
Hemant Solanki.
Course Coordinator Principal
Project Guide/ Internal Examiner
External Examiner
ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are
so numerous and the depth is so enormous.
I would like to acknowledge the following as being idealistic
channels and fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai
for giving me chance to do this project.
I would like to thank my Principal, Dr (Mrs.) Shobana
Vasudevan for providing the necessary facilities required for
completion of this project.
I take this opportunity to thank our Coordinator Ms. Divya
Lalwani, for her moral support and guidance.
I would also like to express my sincere gratitude towards my
project guide Mr. Hemant Solanki whose guidance and care
made the project successful.
I would like to thank my College Library, for having
provided various reference books and magazines related to my
project.
Lastly, I would like to thank each and every person who
directly or indirectly helped me in the completion of the project
especially my Parents and Peers who supported me
throughout my project.
Index
Sr No Name of the Topic Page

No
1 Abstract 6
2 Introduction 6
3 Review Of Literature
4 Objective
5 Research Methodology
6 Data Analysis & Interpretation
7 Findings
8 Conclusion
9 Bibliography
10 Questionnaire
11 Plagiarism report
Abstract
Banks consider as a greater participant in India’s financial system. The banking

sector offers numerous facilities, services and opportunities to their clients. India’s
banking system is divided into two parts, first one is organized sector and the second is
unorganized sectors. In addition to electronic banking, card banking is one of the most
vital forms of banking products. Card banking products are Debit Cards, Credit Cards,
prepaid card, store card, Smart Card and many more which are popularly recognised as
Plastic Card or Plastic Money. As banking sector becomes more aggressive, the
distribution of plastic money has also increased. This research study is done on the topic
of Analytical study of plastic money in Indian market. Primary data as well as the
secondary data is used for this study where Primary data was collected through a well-
structured Questionnaire with the sample size of 94 respondents in Maharashtra and
Gujrat to find out Analytical study of plastic money and customer perceptions towards
plastic money in Indian market. The research also shows that present and future scenario
of plastic money.
Introduction
Plastic cards are one among of the innovations in ﬁnancial services through which
the purchasers are given a chance of non- cash payment of goods and services and are
designed to facilitate small value retail payment by offering a substitute for bank notes
and coins. Plastic money or Polymer money are made out of plastic. Plastic money is a
substitute to the cash. It represents currency and near currency. The different plastic cards
it includes Debit Card, Credit Card, ATM, Prepaid Card, Smart Card and so on. These
cards have plastic used in their making and that is where from the name of plastic money
has originated from.
Plastic cards, or what’s described a plastic money, happen to be one of the best-
known method of payment in this days and age. Most of the people failed to grasp how
quickly that little piece of plastic took its place in our lives. Credit cards online will
continue to be used for the multiple advantages they offer us.
Additionally, at this time going around with a massive quantity of carrying cash
with you is not a wise choice in terms of safety. The security issue assumes even greater
significance when you are visiting someplace far. Money is easy to identify and pick-
pockets and thieves are able to use nicked money equally easily because these funds are
not traceable. On the contrary, online credit card dealings, are detectable, traceable and
carry an audit trail likewise.
Payment cards/ Plastic card are a part of a payment system issued by financial
institutions, such as a commercial bank, it is also referred as bank card, to a customer that
allows its owner (the cardholder) to access the funds within the customer's
designated bank accounts, or through a credit account and make payments by electronic
account transfer and access automated teller machines (ATMs). Such cards are called as
by a variety of names including bank cards, ATM cards, client cards, key cards or cash
cards etc.
There are a multiple types of payment cards, the most common plastic card
among customers are credit cards, debit cards, store-value card, charge cards and smart
cards. Most commonly, a payment card is electronically linked to an account or accounts
belonging to the cardholder. These accounts may be deposit accounts or loan or credit
accounts, and the plastic card is a means of authenticating of the cardholder. However,
stored-value cards store money on the card itself and are not necessarily linked to an
account at a financial institution.
It can also be the smart card that contains a very unique card number and few
securities information like an expiration date or with a magnetic strip on the back
enabling various machines to read and access information. Depending on the issuing
bank and the preferences of the customer, this may allow the card to be used as an ATM
card, enabling transactions at automatic teller machines (ATM); or as a debit card, linked
to the cs bank account and able to be used for making purchases at the point of sale; or as
a credit card attached to a revolving credit line supplied by the bank.
Definition
A slang phrases for plastic cards especially when such cards used to make purchase the
plastic origin of these term refers to the plastic construction of credit card as opposed to
paper and metal of currency.
History
The evolution of plastic money dates back to the 1920s, when the first payment card was
introduced in the USA.
Diners Club and American Express launched the world’s first plastic card in the USA, in
1950. The first credit card was introduced by Diners Club in 1951. However, the plastic
cards began to be widely used only after 1970, when the specific standards for magnetic
strip were set.
In the late 1990s, plastic cards became very common and by 2001, plastic money had
become an essential form of ‘ready money’
The Indian Plastic Money Journey:
Citibank and HSBC were the pioneers in the Indian credit card 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…
Evolution of plastic cards:
1. The First plastic is Card: Charg-It

The very first credit card and plastic card milestone came in the year 1946
when the first bank card called “Charg-It”. It was introduced by the Brooklyn,
New York banker John Biggins. The Charg-It model worked almost similar to
modern credit cards: A customer would use the card to pay a retailer and the
issuing bank would reimburse the retailer and then seek for payment from the
customer.
At this time, Charg-It cards are only worked at stores located very near to
the card’s issuing bank. These early credit cards were not considered as national
payment tools yet.
2. Diners Club Card is Formed

In 1949, a person named Frank McNamara was dining at Major’s Cabin
Grill in New York City and realized his wallet was sitting at home. He resolved
the situation, but it was something he never wanted to happen again. His
experience, dubbed “The First Supper” by Diners Club, inspired McNamara and
his business partner Ralph Schneider to release the primary cardboard Diners
Club Card in 1950. It was named as charge card intended for consumers who
wanted to pay back their travel and entertainment purchases later. At that time it
was the first card to be accepted by multiple merchants outside a single
geographic area.
The Diners Club Card exploded in popularity and by 1951, only a year
after launch, Diners Club had around 42,000 members, and card acceptance
spread throughout major U.S. cities.
3. American Express
American Express started their own credit program in 1958. Just Like the
original Diners Club Card, it was first a charge card intended to fund travel and
entertainment expenses and bills were due in full at the end of every month. In
1959, American Express introduced the primary card made of plastic. The issuing
bank then launched their corporate credit card program for commercial customers
in 1966.
4. BankAmericard
In 1958, Bank of America introduced the very first true general-purpose
credit card, BankAmericard, which was almost similar to the credit cards we use
today. It was initially made of paper, but soon became plastic. It had a $300
spending limit and cardholders could carry balances month-to-month for a fee. It
can be accepted by any merchants willing to accept it.
Until now, banking and financial services in the U.S. were largely
conducted locally, not nationally. To higher compete with the growing credit card
industry, in 1966 Bank of America began licensing its cards to be utilized by
other banks, expanding its reach around the nation. To strengthen the network, by
1970 Bank of America joined a group of banks to create National
BankAmericard, Inc. which was later renamed Visa in 1976.
5. Master Charge
In 1966, a small group of East-coast banks formed the Interbank Card
Association (ICA) to compete with California-based BankAmericard. ICA’s
answer to the BankAmericard was a card program called “Master Charge.” The
organization began revolutionizing the payment authorization process and in 1973
established a central computer network that connected merchants with the card-
issuing banks. In 1979, Master Charge was renamed MasterCard.
6. Invention of the Magnetic Stripe

You know that black stripe on the back of your cards? It was placed on a
plastic card by IBM engineer Forrest Parry in the early 1960s.12 Parry’s
magnetized tape first held details for CIA identity cards and have become an easy
and cheap way to store account information for payment cards and point-of-sale
terminals, too.
Until the introduction of the magnetic stripe (also referred to as “mag
stripes”), credit card transactions were more physical than digital, so this was an
historic revolution. Payment transactions might be computerized rather than
dependent on manual processing.
7. ATM
One of the most convenient aspects of plastic money is the all-serving
ATM. The ATM (Automated Teller Machine) was brought into existence within
the 1960’s by John Shepperd-Barron. After an unfortunate and unsuccessful trip
to the bank, John had to wait until the following day when it opened again. That
night, while reportedly taking a bath, John thought of a self dispensing cash
machine. Along with the invention of what was soon to be the ATM, he also
invented the 4-digit international standard Personal Identification Number (PIN)
code. John first wanted a six-digit army serial; but his wife convinced him four
digits would be easier to remember.
8. Chip and Personal Identification Number (PIN) card

One of the more disruptive changes to plastic money came with the
adoption of chip and Personal Identification Number (PIN) technology. This
technique has become a standard with credit and debit cards, and is preferred to
the magnetic stripe. Chip and Personal Identification Number (PIN) technology
makes cards much more secure and safer also personal information is very hard to
steal because of the encrypted chip. A cloned chip can also be immediately
recognizable as a fraudulent card, as each individual chip is specifically encrypted
for each and every individual card. Even though this card technology has been
around since the 1990’s, it has become nationally used across Canada, and will
become mandatory within the United States by October, 1st 2015.
9. Bling Tag
The Bling Tag makes it even faster to pay via mobile device. It’s a sticker
that contains an NFC (Near Field Communication) chip. The NFC chip uses the
similar technology that’s in your traditional credit or debit card. Any Bling Tag
user simply has got to tap their phone on the card accepter machine just like
taping a credit or debit card. This can be convenience at a wholly new level.
Consumers can leave their wallets or purses at home.
Advantages and disadvantages of plastic money are as follows:
The advantages include:

1. Eliminates the need for carrying huge cash:
This eliminates the requirement for carrying huge load of cash which is
risky and inconvenient too. It’s essential that we need to possess some sort of
money in hand always as we never know when a need arises. But carrying a lot of
cash in hand is not at all a great idea. Also, who would want to hold a lot of cash
in hand and make their wallet bulge out. In such situations, plastic money comes
for help. Your wallet will remain perfect and your cash needs also will be sorted
out. If required you can take cash using plastic cards whenever you want to. Also,
it’s safe when you have a card with you as whether or not it’s lost, you’ll be able
to always call the bank and ask them to block it. This avoids misusing the card by
any. But when it’s cash, you are not left with that option and you’ll end up losing
your money. Cards are waterproof hence you don’t need to get panicked whether
or not water spilled over your wallet. They’re strong and durable.
2. Risk of Loss or Theft minimized:

Just In case of cash there’s a high risk of losing cash and an opportunity of
cash getting stolen. However, in the case of debit/credit card you can report the
matter to the bank and block the card to avoid misuse. We are living in a world
where thefts and crimes are on the increase. Personal Identification Number (PIN)
cash in hand isn’t a secure thing to do. It’ll not provide you peaceful nights. So be
practical and opt for plastic money. You do not have to worry when someone runs
away with your wallet, as long as you only have plastic money in it. The guy
needs, PERSONAL IDENTIFICATION NUMBER (PIN) number to use it hence
he can’t take the cash or swipe it. As soon as you know that you are pickpocketed,
you can call the bank and ask them to block or cancel the card. If it was actual
cash in its place, then it is easy for the thief. He can easily take the cash and throw
the wallet somewhere. But with plastic money, his job has become a difficult one.
He needs to know cracking techniques to find out the PERSONAL
IDENTIFICATION NUMBER (PIN) to use the cards. Hence worries related to
the theft are less in case of plastic money. Another merit is that the fingerprints on
a plastic card are more clear than that on bank notes.
3. Anytime/Anywhere Access:
Using cards you’ve got the unique advantage and convenience of using it
anywhere within the country or even in abroad. In olden days when there was no
plastic money, we need to go personally to each and every place to make a
payment be it utility payments or booking tickets. But now you’ll able to pay at
your own convenience sitting at home with the use of plastic money. For
example, you need to go to the travel agency to pay cash for your ticket, instead,
you can book your ticket online. Also, when a travel agency is involved, they
charge commission or fee but when you are booking the ticket directly from the
airline’s website, you are saving on it. Plastic cards can also be used for online
purchases. We can see many online shops coming up these days. If you find
something interesting on a website and would want to have it, you can always
purchase it anytime using plastic money. Another advantage is that certain
websites do not charge you the service fee if you are making payment through
plastic money as the payment is finished upfront. A service fee will be charged in
cash on delivery option. Plastic money can be used 24 * 7 for online purchases.
4. Credit Facility:
In the case of credit card you have got the choice of buying on credit or
paying later. Although the charges are high, it helps you in the case of
emergencies and contingencies. However, regarding having a card that gives you
a credit facility? That sounds great right? With the advent of credit cards, you can
purchase anything today and you’re given sufficient time to pay for it. Only with
the use of plastic money, you avail this credit facility. The advantage of having
this facility is that you need not go behind people to borrow cash in case of
emergencies, instead, you’ll use the card in your hand. Also, you get ample
amount of time to repay the amount. It is like a best buddy who helps you in case
of monetary needs. Purchase today and pay later, isn’t that a benefit you are
getting? This factor is one of main reasons why people are getting attracted
towards credit cards.
5. Online Payments:
You can use cards for online payments, fund transfers and various other
transactions. These are the key benefits which I can easily remember, but there
could be various other good features too that are specific to certain cards.
6. Tracking transactions becomes easy:

Having a track of your daily or monthly transactions is always good. By
using the plastic money, you’re automatically Personal Identification Number
(PIN) a track of all your transactions. You can verify it later if needed. When we
are using bank notes, we would forget later for what we spend it, unless you have
the habit of noting down each cash transaction you make. This is not the case with
plastic cards. The banks normally send the statement of debit or credit card to its
customers on a monthly basis which can have the list of all your transactions for
that particular month. This transaction history might help us at times when we
misplace a bill. We can show the transaction details to prove that we have made a
purchase. Also, for us to have a check of our expenses or any particular
transaction made in the past, these statements are helpful.
7. 0% Instalment options:
Certain credit cards offers its customers the facility to convert their
purchases from selected outlets to instalment options of 3, 6 or 12 months at 0%
interest rate. The client is given the choice to select the period of instalment which
cannot be changed it later. If you have selected 6 months instalment plan and paid
it off at intervals 5 months, then you will have to pay an additional fee. Therefore,
be careful and pay only according to the instalment period selected. It is an
amazing facility offered by the banks as it helps you to purchase that thing you
wish today and pay in equal instalments at an interval within specific time. Will
you avail this facility if you are using cash? A big No is the answer. Therefore,
this is indeed a benefit of plastic money.
8. internationally acceptable:
One of the main and important advantages of plastic money is that the
same card can be used regionally as well as internationally. For instance, you can
get rid of the trouble of converting the cash into the currency of the country
you’re planning to travel. If you have an international debit or credit card, you can
make your purchases with that card itself. So, the problem of running out of cash
will not happen even if you are abroad and that helps you to have a safe journey
without worrying about the cash and budget. Sometimes we end up not buying
something that we actually like due to insufficient cash but when you have a
credit card with you, you can always purchase it and pay later. Especially from
abroad as it is not practically possible to visit the country again to buy stuff.
9. Rewards and Cashback:

For years credit card issuers have been engaging customers to sign up by
offering rewards programs for using the card. The more and more you spend, the
more and more money card issuers can make in transaction fees and, possibly, in
late payments and interest if you fall behind in repayment. The most common
credit card rewards are airline miles, "points" that can be redeemed for cash or
discounts at certain retailers, and cash back. A majority of the credit cards that
gives rewards also require an annual fee for the use of the card. Banks have also
started giving some rewards for the use of debit cards however these are not as
strong as credit card reward programs because banks get lower fees per
transaction on debit card use. Examples of debit card rewards include fee waiver
on checking accounts if the debit card is used three times in a month, and
revolving discounts at certain merchant locations.
Disadvantages include:
1. Plastic money cannot be used everywhere:
There are many places where there is a need for cash only. For instance,
purchasing utilities from a small retailer or for payments to milkman, newspaper
boy, etc. Further religious places like temple generally accept cash as offerings.
Thus, plastic money cannot completely replace cash and thus cannot be used
everywhere. Just plastic money won’t help always: Plastic money is not a
complete replacement for cash. In certain places, we need cash itself. While
buying fish from the market or when paying to the newspaper boy, we need cash
itself as they do not carry POS machine to swipe the plastic money. Similarly, we
pay money at religious places for offerings, there also they do not take plastic
money. Unless we have the facility to use plastic money everywhere, we cannot
replace cash completely. Still, there are small retail shops which do not take
plastic money. In villages, hardly we find any shops that accept plastic money. It
makes us necessary to carry some cash always for our safety.
2. Plastic money is also not completely safe:

When we are making an online purchase through a form of plastic money
there a certain degree of risk involved as we share our bank details and other
financial information on the internet which is not always a safe place. There are
certain malicious websites on the internet with the intention of looting people,
thus it is very important to be careful while sharing an important detail online.
3. Interest liability:
While it is true that credit cards give us ample time to pay for purchases
made through it, it can also not be ignored that on the lapse of that period the card
holder has to pay interest amount. but if we fail to make the payment within the
due date, interest will be charged. This is not the case when making payment
through cash.
4. Service charge in certain cases:

When we are using plastic money instead of cash, in certain cases the bank
charges a service charge for the purchase of certain items. For instance, in some
countries, the service charge is levied on card transactions when you purchase
gold from jewellery. When paying cash, this additional charge will not be taken.
5. Card too can get damaged:

Imagine a situation wherein you have made a purchase and when at the
counter you realize that your card is damaged or when trying to swipe, the
transaction is not getting proceed due to some chip error or damage. You will
definitely wish if you had some cash in hand. These cases occur only when plastic
money is used. It might be a rare case but the possibility cannot be completely
ignored.
6. Risk of Overspending:
With debit cards, you can usually ask your bank to offer overdraft
protection or reject transactions when there are insufficient funds in the account.
There’s some risk of overdraft fees but you generally cannot spend a lot more
money than you have if you use a debit card. On the other hand, credit card debt
can become a nightmare very quickly if you fail to pay your bills on time. Most
monthly credit card bills list two amounts — minimum payment due and monthly
balance. If you only make the minimum payments that are due, interest 8 starts to
accrue on the remaining balance at staggeringly high rates of 12 to 24%. And
since this interest is compounded, it is very easy to get mired in a lot of debt.
Financial advisors are unanimous in recommending that consumers repay their
credit card debt first, before other loans like student loans or home equity loans.
7. Credit History:
It is important to build a good credit history for yourself over time. A
good credit score ensures you pay lower interest on mortgages and car loans, and
lower insurance premiums. Landlords and potential employers also run credit
checks. Debit cards do not affect credit history at all. But credit cards can play an
important role in building credit history. Owning a credit card and paying off
credit card bills in full every month makes a positive impact on your credit
history. Conversely, owning a credit card but falling behind on payments
negatively impacts your credit score.
Types of Plastic Cards
In the market there are two types of plastic cards which are frequently used to buy goods
and services: Debit Card and Credit Card.
1. Debit Card:
Debit card is a type of card which is linked to the account of the cardholder i.e.
The one who owns the card. These are usually issued by banks and financial institutions.
If you use a debit card, the money is will be deducted directly from your bank account
which is linked with the card. As long as you have money in your bank account you can
make payment. A debit card is a “pay now” method. Say you have Rs 10,000 in your
bank account. The amount you can spend, or withdraw, through your card cannot exceed
this limit.
A debit card (also identified as a bank card or check card) is a plastic card that
offers the cardholder an electronic access to his or her bank accounts at a financial
institution. Some cards have a stored value with which a payment is made, while most
relay a message to the cardholder’s bank to withdraw funds from a particular account in
favour of the payee’s particular bank account. Card can be used as a substitute payment
method to cash when creation purchases. In most of the cases, the primary account
number is assigned exclusively for use on the Internet and there’s no need of using
physical card.
In many countries around the world, the use of debit cards has become so
widespread that their volume has overtaken or completely replaced cheques and, in some
instances, cash transactions. The expansion of debit card, unlike credit card, has
commonly been country specific resulting in a number of different systems around the
world, which were often incompatible. Since the mid-2000s, a number of initiatives have
allowed debit cards issued in one country to be used in other countries and allowed their
use for internet and phone purchases.
Though, unlike credit cards, the funds paid using a debit card are transferred from
the bearers bank account, instead of having the bearer pay back the money at a later date.
debit cards usually also allow for instant withdrawal of cash, acting as the ATM card for
withdrawing cash. Merchants may also offer cash back facilities to customers, where a
customer can withdraw cash along with their purchase.
 Advantages of Debit Card:

1. 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. And also it is easy to use.
3. Paper money also picks up dirt and stains more easily than plastic money.
4. Another important advantage of plastic money is that you won’t have to carry
your cash around all the time as it is substitute to cash.
5. Plastic card also doesn’t wear after time as paper does rip and tear.
6. It is more convenient to carry than carrying huge cash.
7. It provides a convenient payment method for online purchases and telephone
purchases.
8. It also helps you to establish a good credit history.
 Disadvantages of Debit card:
1. Lost 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. If you failed to make your instalment it will damage your credit rating.
3. It allows you to build up more debt than you can handle.
4. It has very complicated terms and conditions.
5. It id around 4.56% of the more money you spent by using plastic card.
6. Some extra money will be deducted for the banks as you avail the facility which
is provided by banks.
2. Credit Card:
Credit cards are plastic card that are issued by financial institutions such as banks.
As the name itself of credit, if you buy anything using credit card, it means you are
buying by taking loan. And thus, you need to pay back later. There is a limit to which one
can buy on a credit card. So, even if you have only Rs 10,000 in your bank account but
your credit card limit is Rs 50,000, you are able to spend up to Rs 50,000. You could also
have Rs 1,00,000 in your bank account, but your credit limit is only Rs 50,000. However,
you need to repay the amount bought on credit by a due date.
There are also two type of credit card: Credit card and Online credit card. Most of
the time, people find using online credit card their way out of an otherwise hopeless
situation. Some people found themselves purchasing airline tickets online, reserving a
hotel room, or renting a car. Then again, there are times when you require some more
ready money at once. In such emergency situation, you can switch to using credit by
using your credit cards online. In general, credit card online give maximum of fifty days
of interest free use of your credit.
Many people look at your credit report which lists your credit history and is
created and updated using information from banks and financial institution from where
you took loan, merchants and other creditors to evaluate you, Therefore, it is important
that your credit report has to be as good as possible. Potential employers, insurance
companies, mortgage lenders and several other institutions seek to get an idea for your
character by examining this factual data. Owing a credit card online and using it wisely
can help you create a positive credit history.
There is no need to be worry over whether you have enough of money or whether
you don’t. also, you don’t have to wait in long lines at a bank branch, or spend time
withdrawing money from an automatic teller machine. Instead, you can carry your credit
card with you. Anytime, anywhere and everything can take care of all your financial
needs.
Several online credit cards have travel insurance where the insurance cover issues
related with traveling built into them as a unique feature. So, if you are one of those who
travel often, this feature might be help you. However, you need to make sure that this
travel insurance provides appropriate coverage. Misplaced baggage is something which is
almost always taken care of with such insurance. Also, please read carefully the terms
and conditions that come with such type of insurance.
You can treat your online credit card as an additional funder of money. When you
are travelling abroad and this whenever you don’t wish to avail of your Prepaid visa
Mastercard as your first source of funds, in order to avoid paying commission on out-of-
country transactions. Thus, if you find yourself strapped for money or traveller’s cheques
you can use a charge card as a fallback option. With such a plethora of useful features
when you are under the financial stress, it is an ease that you cannot avoid. Truly, online
credit card is really a crucial commodity in today’s global environment.
 Advantages of Credit Card:

1. Credit card provides an additional customer service to the existing clients. It
improves the customer satisfaction.
2. Due to increase in use of credit card eventually the growth of banking habits has
increased in the market.
3. The risk factor of carrying and storing cash is avoided. It is convenient to carry
credit card and have trouble free travel and may purchase without carrying casher
cheque.
4. Cardholders usually have a free credit period of 9+ 5+ days after the purchase.
5. Availing credit with minimum formality.
6. Credit card saves trouble and paperwork of traveling businessmen.
7. Increasing revenue by increasing the purchasing power of cardholder with
unclaimed funds available to the cardholders.
8. Credit card guarantee timely and secure of payments.
9. Receipts are routed through bank channels for systematic accounting.
10. Advertising and promotion at the support on national scale.
 Disadvantages of credit card:
1. Some credit card transactions take longer time than cash transactions because of
various formalities.
2. Discounts and rebates are rarely possible in fact there is no scope of reward and
discount.
3. The cardholder shall be responsible for any loss or theft of the card and the bank
shall not be involved in any loss due to fraud or collusion with employees.
4. If you pay by the card, you may be refused the discount. In some cases, extra
charges are applied for making payment in cash e.g., buying gold.
5. It might lead to spending habits and cardholders may end up in big debts
6. Avoid all the cost and security issues involved in handling the cash.
7. It also allows customer to delegate purchasing power.
8. Credit cards are considered as a status symbol.
Other Kinds of Cards

There are also different types of plastic cards available in the market today. Such as add-
on cards, charge cards, co-branded cards, affinity cards or Diners Club cards etc.
1. ATM card:
An ATM card is any card that can be used in automated teller
machines (ATMs) for transactions such as deposits, cash withdrawals, obtaining
account information, and other types of transactions, often through interbank
networks. This card is issued solely to access the ATMs, and most debit or credit
cards may also be used at ATMs, but most charge and proprietary cards cannot.
The purpose of a credit card is to withdraw cash at an ATM is treated in a
different way to an POS transaction, usually attracting interest charges from the
date of the cash withdrawal. On the other side the use of a debit card usually does
not attract any interest. There is possibility that third party ATM owners may
charge a fee for the use of their ATM But it depends on banks to banks.
Most of the payment cards, such as debit and credit cards, can also
function as ATM cards, although ATM-only cards are also available. Rest of
charge and proprietary cards cannot be treated 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.
All ATM machines allows cash withdrawals of customers of the machine's
owner and for cards that are associated with any ATM network the machine is
also associated. They will report the amount of the withdrawal and any fees
charged by the machine on the receipt. Most of the banks and credit unions allows
to 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.
For other types of transactions through telephone or online banking, this
may be executed with an ATM card without in-person authentication. This
includes such as account balance inquiries, electronic bill payments, or in some
cases, online purchases too.
ATM cards can also be used on improvised ATMs such as "mini-ATMs",
merchants' card it delivers the similar ATM features but without any cash drawer.
These terminals can also be used as cashless scrip ATMs by cashing the receipts
they issue at the merchant's point of sale. In 2017, there were 20.48 billion
payment cards in circulation worldwide.
2. Charge card:
It has all the features of a credit card. Though, after using a charge card
you will have to pay off the entire amount you used, by the due date. If you fail to
do repayment of your loan then, you are likely to be considered as a defaulter and
will usually have to pay up a steep late payment charge. But in the case of credit
card, you can pay the late payment fee if you missed the due date.
3. Photo card:
If card holder photograph is printed on the card, thus card is known as a
photo card. This helps to identify the user of the credit card and is therefore it is
considered as the safer card among all.
4. Global cards:
Global card allows you the flexibility and convenience of using your
credit card rather than cash or travellers checks while you are travelling abroad
for either business or personal reasons. As name itself this card allows you to use
all over the world.
5. Affinity Card:
An affinity credit card will allow an organization to offer its members and
employees those who have an “affinity” for that organization a credit card that
helps to promote the organization’s brand each time when a cardholder uses the
card. When the card is used, a certain percentage is contributed to the organisation
institution by the card issuer.
6. An add-on card:
An add-on card permits you to apply for a supplementary credit card
within the overall credit limit. You can apply for this card in the name of family
members like your father/ mother/ spouse/ brother/ sister/ children above 18 years
of age. You are liable to make good all the payments for the purchases made
using the add-on card. Your billing statement would reflect the details of
purchases made using the add-on card. Normally an issuing bank permits two
add-on cards per credit card.
7. Prepaid cards:
Retail and departmental stores are the core issuers of prepaid cards. Where
cash is loaded on your card and the cardholder can shop in the store without
having to carry cash. Upon depletion of the funds, cash can be refilled for future
use if the customer is wants it.
8. Amex Card:
International visa and master cards are mostly used by travellers to endure
their expenses on their trips. Believe it or not, most travellers finance their trips
with their business credit cards or by travellers’ cheques. One of the main reasons
is that because of which this practice has become most common among travellers
is currency. Usually, it becomes difficult for travellers to go to currency exchange
agencies and exchange their currencies at very low rates.
.
9. In-Store Card:
In-store card is issued by retailers or companies. It has a currency only at
the issuer’s outlet for purchasing products or services of the issuer company. The
payment can be made on monthly or in case of extended credit basis and for
extended credit facility, interest is charged.
10. Smart Card:

A smart card contains an electronic chip which is used to store cash. This
is the most useful to pay for small purchases for example in fairs, coffee shops,
and the like. When a transaction is made using the card, the value is debited and
the balance comes down automatically. Smart cards serve as credit or ATM cards,
fuel cards mobile phone SIMs, authorization cards for pay television, household
utility pre-payment cards, high-security identification and access-control cards,
and public transport and public phone payment cards. Smart cards can also be
used as electronic wallets. The smart card chip can be loaded with funds to pay
parking meters, vending machines or merchants. Cryptographic protocols protect
the exchange of money between the smart card and the machine. No connection to
a bank is needed. Smart cards can provide identity documentation, authentication,
data storage, and application processing. Smart cards may provide strong security
authentication for single sign-on (SSO) within large organizations.
11. Petro Card:

Several petroleum companies permit its customers to pay for the fuel
through electronic medium which means by using plastic money. It offers a
scheme of gifting points, rewards to the customers whenever they pay for fuel
using the Petro card.
12. 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 choice of the fleet owner or manager. The
benefits of using fleet card are that it minimizes 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 or managers to receive real time reports and set purchase controls
with their cards, helping to keep them informed of all business related
expenditures. They may also reduce administrative work or otherwise be essential
in arranging fuel taxation refunds.
Debit Card V/S Credit Card
Sr Point of Debit Card Credit Card

no. differences
1. Definition Money gets deduct from saving Credit card allows you to make
account. payment for goods and service
(Purchase and pay later)
2. Source of Savings bank account or Credit extended to you by your
funds current account. card issuer. It gives you access
to use money.
3. Spending You can spend amount to the credit extended to you by card
advantage amount you have in your issuer.
account.
4. Who pays for You pay for your purchase. The credit card company pays
the purchase on behalf of you.
5. Bill There is no concept of bill or you get bill or statement of
statement. each month. With the details of
the transaction you made.
6. Payment There’s no repayment that You need to be paid loan
needs to be made. amount to each month since it
is being borrowed.
7. Fees and Annual fees and personal There are multiple fees
Charges identification number (PIN) applicable. this includes
regeneration fees are joining fees, annual fees, late
applicable. payment fees, and bounced
cheque fees among others.
8. Interest There’s lower rate of interest Higher rate of interest is
that is credited to your bank charged on the outstanding
account. amount if it hasn’t been paid
by the due date.
9. Reward There is minimum or no Card holder gets lots of
rewards you get. rewards such as cashback, air
miles, and reward points which
can be redeemed.
10. Lost and Protection from theft or loss Most cards offer 100% lost
Liability of the card is minimal. liability protection. So, you are
not liable for any unauthorized
transactions made.
11. Credit There is no scope for credit Payments of instalments affect
History history. credit history.
12. Security In debit card PIN makes it Security varies from bank to
secure account transaction. bank.
13. Application The process for getting debit It depends on credit score and
process card is easy. other details required to be
fulfilled.
14. Limits of Very few Annual fees and There are multiple fees are
funds that personal identification charged such as joining fees,
can be number (PIN) regeneration annual fees, bounced cheque
accessed fees are applicable. fees and late payment fees etc.
are applicable.
15. privileges There is no scope for There are many privileges such
privileges. as dinning, retail, travel and
entertainment (it depends on
which card you have)
Parties Involved in transaction:
Cardholder: The owner of the card makes a purchase; the consumer.

Card-issuing bank: The financial institution (Banks) or other organization that issued
the card to the cardholder.
Merchant: The individual or business who accepts the card payments for the products or
services which is sold to the cardholder/ customer.
Acquiring bank: The financial institution accepting payment for the products or services
on behalf of the merchant.
Independent sales organization: Resellers (to merchants) of the services of the
acquiring bank.
Merchant Account: This may be refer to an acquiring bank or an independent sales
organization, but usually the organization that the merchant deals with.
Card Association: An association of card issuers banks such as Visa, MasterCard,
RuPay and American Express etc.
That sets the transactional terms and conditions of the merchants, card issuing banks, and
acquiring banks.
Transaction Network: A system that implements the mechanism of the electronic
transactions. It may be operated by an independent company and one company may
operate on multiple networks. The transaction processing networks include: Cardnet,
Omaha, Paymentech, NDC Atlanta, Nova, Vita and Visa Net etc.
LITERATURE REVIEW
1. Hirschman 1982; Jonker 2005; -We are accompanied by our study of payment
behaviour with qualitative data and payment behaviour of the recognition of the
payment function. It was found that the recognition of payment banknotes and
perceived differences are considerable determinants of consumer behaviour.
2. Feinberg Richard A. (December 1986). It was originated that customers pick

plastic money over paper money and the core advantage is that cards provides to
the customers is the convenience and accessibility. The major challenge according
to them is the increased transactional charges and unnecessary formalities to
acquire the cards from the financial institutions. They felt that the future of plastic
money is bright and according to them, the next thing to come via technology
would be the use of digital signatures.
3. Brito and Hartley (1995) indicate that the cost of paying interest on credit card
debt is likely to be lower than the transaction costs associated with arranging
loans from banks or other financial institutions.
4. Telyukova and Wright (2005) and Zinman (2007) show that consumers sustain
balances in their low-interest-bearing bank accounts for liquidity reasons, even
while carrying high-interest credit card debt. The authors suggest that a rational
consumer may pay interest on credit card debt to avoid some of the expected costs
associated with not holding cautionary or transactions balances.
5. Zinman (2007a) and Klee (2006) have shown that people with rotating credit card
balances are much more likely to accept debit cards than qualified users.
6. Mandeep Kaur and Kamalpreet Kaur (2008), in their article, “Development of

Plastic Cards Market: Past, Present and Future Scenario in Indian Banks”
conclude that the Indian banking sector is currently owned by all groups of
bankers. As you can see, we can conclude that we are embracing the challenges of
information technology. We recognized that this was essential requirement for
their survival and growth in the future. Despite of the significant advances in
electronic payments, an estimated 90% of personal consumption expenditure in
India is still made in the cash which demonstrate that the potential for huge
developments in this business. Therefore, this can be seen as just the beginning
of a bright future outlook for the Indian plastic card market.
7. Alvares, Cliford (2009): The article reports on the issue of counterfeit currencies
in India. The country's battle against fake currency has never easier, and many
false goods are said to be undetectable. It is also specified that the printing ability
of counterfeiter’s products. It had restricted printing facilities which made it easier
to discover fakes. According to chief economist Soumendra K. Dash, the solution
to this problem is to offer people an incentive to use more plastic cards and make
cashless transactions.
8. Loewenstein and Hafalir in 2012 conducted a study on “The Impact of Credit

Cards on Spending”. The study focused on two types of customers, the first are
those who are revolvers (who carry debt) and others are convenience users (who
do not carry debt), and measured the impact of payment with credit card as
compared with cash by an insurance company employee spending on lunch in a
cafeteria. It was found that there was a change in the diner’s payment medium
from cash to a credit card when an incentive to pay with a credit card was given.
It was discovered that credit cards did not increase spending. However, the use of
credit cards has a different impact on the spending of revolvers and convenience
users. Revolvers spend less when promoted to use them with a credit cards, while
convenience users show the opposite pattern.
9. Vimala V. and Dir. Sarala K.S., (2013).” Stressed on the Usage and perception of
plastic money among the customers of BOI” with emphasis of the awareness
level, perception and usage of new innovative services in regards to plastic
money.
10. Hayashi Fumiko and Weiner Stuart E. (Sept.2005) in their article “Competition
and Credit Card Interchange Fees” Specified that there’s a bridge between the
theoretical and empirical literatures on interchange fees. credit and debit card
industries are examples of two sided markets. The distinguishing feature of two-
sided markets is they contain two sets of end users, each of whom needs the other
in order for the market to run. In the case of credit and debit cards the two end
user groups are cardholders and merchants. Payment card systems take one of two
principal forms. They may be three- party system: Cardholders, Merchants and a
single financial institution that offers proprietary network services, For example:
American Express. Alternatively, they may be four-party systems: Cardholders,
Merchants, Card- Issuing Banks, and Merchant acquiring Banks, using the
services of a multi- party network such as MasterCard, Visa, or a domestic debit
card network. In four-party system, the interchange fee is an instrument that
networks can use to achieve a desired Balance of cardholder.
11. Khurana, Sunayna1, Singh, S. P. (2011) explained that, in today’s busy world,
nobody has the time to withdraw money from the bank account for shopping.
Everybody is interested in carrying the plastic money (credit card and debit card)
in their wallet. For shopping as it gives convenience, safety, easiness and even
style. In this cutthroat competition, banks have to work hard to Gain market share
and to meet the expectations of customers so that they can delight their customers.
This study is carried out to Identify customer preferences and expectations from
credit/debit card services.
12. Subhani in 2011 conducted a study on ‘Plastic Money/Credit Cards Charisma for
Now and Then’. The study was based to find out the charisma of plastic money,
its usability and affordability and its impact on its preference to use. The research
found that the Preference to use of plastic money/ credit card has its pros and cons
with its usability and Affordability. According to the consumer behaviour, plastic
money is a form of Conditioning and acts as a stimulus which qualifies a
consumer to spend. The study shows That the preference to go for plastic money
has a positive association with the easy use of Plastic money because the precept
of credit card usability is linked with a psychological Phenomenon that people are
likely to spend less with credit card and spend more with the Same amount of
cash on hand in the same budget and this precept also linked with the Consumer
self-convenience, i.e., convenience and easy use which delves into spending.
13. Bansi Patel and Urvi Amin (2012) in their research paper “Plastic Money: Road
may Towards Cash Less Society” conversed That now days in any transaction
Plastic money becomes inevitable part of the transaction and with it life becomes
easier and development would take better place and along with the plastic money
it becomes possible that control the money laundry and effective utilization of
financial system would become possible which would also helpful for tax
legislation.
14. Sushma Patil, 2014 Anupama Sharma (2012)in her research paper “Plastic card
frauds and the counter measures: towards a safer payment mechanism” have
thrown light on the number of frauds increased considerably in the usage of
plastic cards as in case of plastic card frauds the most affected parties are the
merchants of goods and services as they have to bear the full liability for losses
due to frauds, the banks also bears some cost especially The indirect cost whereas
the cardholders are least affected because of limited consumer Liability and
concluded that all these losses can be dealt with by making the prudent use of The
new technology and taking the respective counter measures.
15. Manikandan (2013) in his research paper “Plastic Money a way for cash Less
Payment System” examined that Plastic Money i.e., usage of Credit card was
measured a luxury, and has become needed. These plastic money and electronic
payments were and used by only higher income group. This facility extended not
only to customers in urban areas or cities, but also to customers residing in rural
area. However, today, with development of banking and trading activity, the fixed
income group or salaried classes are also start using the plastic money and
electronic payment systems and particularly Credit cards.
16. Tabrez Haq and Bushra Malik, (2014).” Consumer response towards the usage of
plastic Money” with emphasis on increase of shift of plastic money in India by
consumers from Credit cards to Debit cards -The distribution of plastic money has
increased due to the Fact that banking sector has become more aggressive.
Moreover, duplication of users is an Important area of concern for the industry
which can exaggerate the number of active Users. The present paper makes an
attempt to understand the after effects of recession on Plastic money industry and
its impact on consumer preferences. The paper duly Investigates the acceptability
of the cards among the Indian consumer and the factors Influencing the card
choice.
17. IMPACT OF PLASTIC MONEY ON BANKING TRENDS IN INDIA Sushma

Patil (Jan 2014) Due to the technological revolution in financial sector, the
payments in banking system have undergone a tremendous change. The number
of innovative products for making payment has developed after the privatization
and globalization. Customers have showed their preference over the usage of the
plastic money generally over a period of time in the banking process. Plastic
money is an alternative to the cash or the standard money. Plastic money is
referring to the credit cards or the debit cards that we use to make purchases.
Various other types of plastic cards provided by banks in India are ATM cards,
$mart cards. The current study presents an overview of the development of
banking in the plastic cards usage trends since these have been introduced in
Indian banking sector. The study also highlights the role of these cards as
electronic payment tool to be used by customers and discusses the penetration of
these cards in replacement of cash and paper money. The Study is been carried
out by taking a survey of 2++ respondents by non-probabilistic convenience
sampling method from a city of Mumbai by using structured questionnaire and
interview technique. The factors for adoption of plastic money in replacement of
cash and paper money have been identified which shows the preference of the
customers for plastic cards over the cash and paper money. Some future plans
made by various banks and institutions for avoiding the frauds arisen due to the
credit and debit cards are also been discussed in a way that it depicts the picture of
its future growth and prospects in India. As the study is been carried out in a city
of Mumbai the results cannot be generalized.
OBJECTIVE
Analytical study of plastic money in Indian market.
 Factors affecting customers to use of plastic money.
 Growth and present scenario of plastic money in India.
 Customer perception towards plastic money.
 To study Future Plans made by various banks and institution for avoiding frauds
arise due to plastic money.
 To suggest some of the precautionary measures involved in minting security
while using plastic money.
RESEARCH METHODOLOGY
Scope of Research:
The main aim of the research is to find out factor affecting use of
plastic money and perception towards plastic money.
Source of Data:
In this research there’s use of both primary as well as secondary data to
get the proper knowledge of each objective.
Primary sources:
 Questionnaire
Secondary sources:
 Internet
 Articles and Newspaper
 Textbooks
Tools of analysis:
 Pie charts and percentage

 Table and Figures
1. Selection of population:
The survey has been held online it primarily target the people of India.
The population for the research was general People and randomly selected people
for the purpose of research.
2. Sample Size: The total sample for this research was 94 respondents.
3. Research instruments:
For the purpose of research, questionnaire method was used to the
respondents. The questionnaire Was developed so as to obtain response relevant
to objects of the research. While designing the questionnaire every attempt was to
make it precise so that the purpose of filling up the responses does not consume
time and it help to people understand the topic without getting Complexes. In this
survey structured questionnaire used with close ended questions. Various
questions like the usages of plastic money, purpose or factor influencing to use
plastic money, market leader among various companies issuing credit and debit
cards. Challenges of using plastic money was asked to get a clear vision of the
objectives.
4. Sampling method:
Convenient sampling:
Convenient sampling is used to in exploratory research where the
researcher is getting an inexpensive approximation of the truth. As it includes in
the name it is a convenient method to follow for the survey. This non-probability
method is often used during preliminary research efforts to get a gross estimate of
the results, without incurring the cost or time required to select a random sample.
Testing Hypothesis
H0: There is no relationship between Age and Usage of plastic money.
H1: There is positive relationship between Age and Usage of plastic money.
In order to test hypothesis, 56% of respondent have age group between 18-25,
34% of respondent have age group between 26-35, whereas 8.5% of respondent fall
under the age 36-45. Which means there is a positive relationship between Age and
Usage of plastic money. Thus, age can be consider as a affecting factor and perception
towards usage of plastic money.
H0: There is no relationship between Occupation and Usage of plastic money.

H1: There is positive relationship between Occupation and Usage of plastic money.
In order to test hypothesis, 52% of respondent are student by occupation, whereas
40% of respondents are salaried people. It means there is no positive relationship between
Occupation and Usage of plastic money. Thus, occupation cannot be consider as a
affecting factor and perception towards usage of plastic money.
H0: There is no relationship between Sex and Usage of plastic money.

Ho: There is positive relationship between Sex and Usage of plastic money.
In order to test hypothesis, 52% are female and 48% are men. Which state that
there is no relationship between Sex and Usage of plastic money. Thus, sex cannot be
consider as a affecting factor and perception towards usage of plastic money.
LIMITATIONS OF THE STUDY
1. The sample size of survey is very small and comprise only 94 respondents,
compare to population of the study.
2. Geographically the scope of this study is limited to Maharashtra & Gujarat only.
3. The behaviour of the customer is unpredictable which may result in lacking of
accuracy in the data.
4. Primary data has its own limitations which might affect the conclusion of this
study. Thus, study accuracy totally based upon the respondent’s response.
DATA ANALYSIS AND INTERPRETATION

The demographic profile of respondent’s
SR Category No. of people Percentage
no.
1. Gender: Male 45 47.9%
Female 49 52.1%
Total 94 100%
2. Age group: 18-25 53 56.4%
26- 35 32 34%
36- 45 8 8.5%
45 & above 1 1.1%
Total 94 100%
3. Occupation: Student 49 52.1%
Corporate Employee 36 38.3%
Govt employee 4 4.3%
Businessman 2 2%
Other: (Profession/ 3 3.3%
Housewife)
Total 94 100%
Data Interpretation:
The above table represent Socio-demographic characteristics such as sex, age and
occupation. When the survey conducted 94 respondents were interviewed for this study.
Where 47.9 % of respondents were male, and 52.1 % were female, which depicted that
there’s not much difference in the usage of plastic money as far as gender concern. The
table also shows percentage of different age groups taken for the research. In this age
group of 18-25 year has 56.34% respondents, age group of 26-35 years consists the 34%
of respondents, age group between 36 to 45 consists 8.5% and 45 and above age group
there’s only 1% of respondent. It means the age group of 18-25 and 26-35 use more
plastic money than other age groups. And the last category is occupation where different
occupations of respondents was asked such as students, corporate employee, government
employee and businessman and other such as any profession or housewife. The study
shows 52% of the students attempted the survey, 38% of the corporate employee, 4% of
government employee and in the remaining 5% of respondents were other by profession
it mostly includes businessman, teacher and or housewife.
The above pie chart shows that the respondents does have bank account or not. Out of the
total sample of 94 people, 85% of respondents have bank account and the rest 14% of
respondents does not have their bank account yet.
Are you aware about plastic money

94 responses
yes
no
100%
Here we can see the awareness of plastic money is excellent almost all the
respondents are aware of what is plastic money. Even if there are some people don’t have
bank account or not using plastic money but they still aware about the plastic money.
The above chart represents the usage of plastic money. The people who have bank
account are using plastic money.
Here as from the above bar chart we can see that the Debit card user has 61% that
is 58 out of 94, Credit card users are 25% that is 24 out of 94 and there are 46% of ATM
card holder and next is store card there are approximately 9% of respondents are using it.
And the others are 1% of respondent using different card from mentioned above. The
highest usage of card in the market is Debit card. Thus, we can say that primary plastic
card which is available in the market is debit card. We can also conclude that using more
debit card than credit card also says that people are tend to be credit free.
Data interpretation:
The above graph shows that people are using various platform of plastic money.
There’s no monopoly in the market. Visa, Rupay and MasterCard all are the top in the
market of plastic money.
The above pie chart indicates that only 48% of the respondents are feeling that the
online payment is more convenient than other type of payment But, cash and card are still
survived in the market where 28% people think cash is the convenient to pay. And only
23% of people feel that card payment is convenient. Thus, it shows that very less amount
people feel that card payment is convenient. Cash and online payment is the best
alternative way to pay.
Among the customers who prefer plastic money, 55% of respondent expressed the
reason for using plastic money as it Eliminates of carrying cash also the 55% of the
respondents prefer plastic money because of the Quick Transaction. Where the people of
29% have the opinion that they prefer plastic money because of the very unique feature
of plastic money is Purchase and pay later. 18% of people pointed out the facts that using
plastic because it is internationally acceptable. Because there’s no need of carrying
currency of other nation. And 26% have the answer that they prefer plastic money
because it is less risky that risk of loss or theft is lowered as compared to paper money.
From the above Graph we can see that 57% of the respondents use plastic money
for payment of Online purchase, 52% respondents use it for Money transaction, 47%
respondents use it for paying bills, 45% for shop Number (PIN)g be it online or offline
and only 40% of the respondents use plastic money for Booking ticket. Thus, we can say
that the use of debit cards is convenient as they can be swiped anywhere with ease and
the deduction from respective bank accounts happens immediately unlike the credit cards
where a swipe generates a future liability of payment for the customer. The easy access to
internet and site like Flipkart, Amazon has led to rise in online shopping of the card users,
Offers and cash backs available make paying utility bills online more convenient option
for the users. The reasons may be varying but the behaviour is common among maximum
respondents.
Do you have ATM service near by your locality

94 responses
1.9%
Yes
No
98.1%
From the above pie chart, it indicated does respondents have ATM services
nearby their locality? Where 98 percent of people have ATM service nearby them. And
remaining 2 percent of people find it difficult to use ATM service as they don’t have
ATM services nearby them.
The above graph shows that the solution of the question “What are the ATM survives you
are aware of or have used it before?” Cash Withdrawal has the highest number of votes
by 70%. It seems most people use ATM service for withdrawing the cash. And other
services such as balance inquiry, Reset ATM PERSONAL IDENTIFICATION
NUMBER (PIN), transfer of fund and Mini statement have fluctuating votes.
when did you visited bank for withdrawing cash

94 esponses
1.6%
last week/month
last year
not visited
98. 4%
There’s almost only 1 percent of respondent had visited bank in the past month or week
to withdraw the cash. And over 98 percent of people do their banking transaction without
going to the bank.
From the above chart it shows how often respondents use plastic money. Where
54% of respondents use plastic money occasionally. Only 31 percent of people use plastic
money on daily basis. And 15% of respondents use plastic money very rarely. Thus, we
can say that there are mixed type usage in the market.
The above pie chart indicates the payment instruments used by respondents for
paying consumable and utilities bills, where there’s almost similar preference in Cash and
Online payment by 40% and 41%. And only 14% people used plastic card for paying
consumable goods and utilities bills. And other instruments like cheque is used by only
1% respondents.
The above pie chart indicates the payment instruments used by respondents for
paying luxury and durable goods, where 40% people use Plastic card, 32% of people
prefer Online payment and only 23% people use cash for buying luxuries goods. And
other instruments like cheque is used by only 1% respondents.
Data Interpeitation:
Here 39 percent of respondent use online payment while they are travelling and
only 25 percent of the respondent are using card (plastic money) while they travel. 29
percent of people are ready to carry cash while travelling and settlement of the payment
through the cash only. Only 2% of the respondents are using cheques while they travel.
Thus respondent feel secure using online payment while they are travelling.
Here the above pie chart shows solution of question “Do you think, due to use of
E-banking plastic money has become outdated?” where 48 percent of respondent feel that
plastic money is not outdated. Also 27% respondents are confused. They are not sure
about whether plastic money has become outdated or not. Also, 17 percent respondent
believe that plastic money has become outdated due to E-banking. And 10% of
respondent have no clue or they don’t want to give comment on this question.
Due to scam and faud, do you feel insecure or hesitate to you plastic
money
94 responses
Yes
No
6.3%
Maybe
Sometimes
9.6% 82.5%
1.6%
Here the above pie chart shows solution of question “Due to scam and fraud, do
you feel insecure or hesitate to use plastic money?” where 82 percent of respondent feel
insecure or hesitate to use plastic money as a mode of payment. Also 6% respondents
sometimes feel insecure or hesitate to use plastic money. And only 2 percent of
respondent don’t feel insecure. Because their high insecurity in the market to usage of
plastic money it is become individual responsibility to aware about the scams happening
in the market.
Here the above pie chart shows solution of question If you are the financial
minister of the country, what would you prefer on higher proportion?” where 53 percent
of respondent have voted for E money. And 28 percent of respondent feel that would
prefer to give more proportion to the plastic money rather than cash or online money.
And rest only 18% of people voted for cash.
The above diagram shows that customer perception towards plastic money.
Where 21 percent of customers are fully satisfied with use of plastic money and 43% of
customers are only satisfies with the use of plastic money. Where 29% of customers have
neutral opinion on plastic money, they not satisfied nor dissatisfied with the use of plastic
money. And the rest of only 2% of customers are not satisfied and totally dissatisfies with
the use of plastic money. Thus, we can conclude that customer have positive approach
towards plastic money. Even tough in the market there’s substitute product of online
payment but customers are still using plastic money and they don’t feel that plastic
money has become outdated.
Growth and Present Scenario of Plastic Money in Indian
Market
In India, Citibank and HSBC were the only two financial institutions were
pioneers in the credit card market in the year 1980. Over the next two decades, the
number of players raised to more than ten in 2000. Therefore, there is equal rise in the
use of plastic card. In 1987-2001 the credit card market had registered a healthy annual
growth rate of over 25%.
Growth of ecommerce equals to increase of plastic money: The development of
ecommerce has resulted in plastic money and it is getting more popular than cash. One of
the also most vital reason on surge in plastic money is E-commerce. Over the last few
decades, along with online shopping, paying bills, online purchase, money transfer there
has been a stable growth in the number of credit card and debit card users. Mobile wallets
have also contributed to promote the online sales. Not just in urban areas, even in the
rural area users are aware about plastic money its benefits and its features. Hence, the
usage of cards has been increased.
 SBI’s Chief Economic Advisor, Soumya Kanti Ghosh says, “Ecommerce has to
be one of the reasons for the rise in plastic card sales today. Usage of cash will
come down significantly and this could lead to likely revolution in the Indian
economy.”
 President of Yes Bank, Shubhada Rao admits, “There’s a definite impact of
ecommerce sector on card sales even though the cash-on-delivery option is
available. There’s a comfort of shopping via cards and this has been discovered in
smaller towns where some brands are not available. Credit cards give them an
accessibility and we have seen spends rising.”
E-commerce retailers provide attractive incentives, rewards in the form of
discounts and no shipping/delivery charges for prepaid orders, which can also be one of
the reasons why plastic money is used more often as opposed to opting for COD.
Talking about other reasons than e-commerce travelling, dining and jewellery are
the top three purchases that Indians make through credit cards. About two decades ago, it
was jewellery and apparel purchases that formed the major chunk of purchases made
through plastic money. Fuel accounts for a very small portion of credit card purchases as
these are largely paid through debit cards. The credit card companies said that consumers
spend Rs 50,000 crore annually which is expected to grow at 50% over the next
upcoming years
 Head of (credit cards) Sachin Khandelwal ICICI Said, “Travel has
definitely become much larger a segment than what it was two decades
ago. Airline tickets, both domestic and international, are now bought
through credit cards making it the largest category for credit card
purchases.”
Air travelling becoming affordable and eating out is a normal thing in Indian
households, this tendency will only gain momentum in the future feels experts. Air
travelling, dining corner about one-fourth of the total credit card purchases which shows
that the change in the Indian spending patterns. Earlier, purchases of both the consumer
durables goods and jewellery items were higher than the hospitality segment. Going
forward, this trend should continue.
 HDFC Bank VP and head (credit cards and product portfolio) Parag Rao said,
“Jewellery, consumer durables, fuel purchases, apparel are a much smaller
segment than travel and dining which comprise the major chunk of credit card
purchases. Eating out has literally become a big concept in last few years.”
According to the reports of 2014, while travelling and hotel bills along with
dining, account were about 25-35 % of the total value of purchases through credit cards,
purchase of jewellery accounts were 10-11 % of the purchases. Apparel purchases
account for 8-10 % and consumer durables like TV and mobile phones account for nearly
6-7% of the purchases through plastic money. Before 2014, the figures were mostly
skewed in favour of jewellery and apparel purchases whereas travel and hospitality were
a small element. With 87% of all transactions in plastic money happening through credit
cards, debit cards in India and it is still continued to be used largely for cash withdrawals.
IN the year 2014 there were about 65 million debit cards users in India of which State
Bank of India alone accounts for 25 million debit cards. Where ICICI Bank had 11
million cards. This were largely in the line with the fact that both of the players were the
biggest banks in India and had the highest number of savings accounts.
Talking about current scenario about plastic card in the September 2020, there
were more than 860 million active debit card users in India. This number was much more
higher than the number of credit cards, which amounted to about 60 million in that same
month. Despite the value of transactions, the number of debit cards remained stable
throughout the coronavirus (COVID-19) pandemic. And talking about credit card As of
on August 2020, approximately 58 million credit cards users were in use in India. The
cumulative number of cards increased constantly in recent years and even recovered
quickly from falling numbers during the lockdown from the end of March to the end of
May 2020, amidst the first wave of the coronavirus (COVID-19) pandemic. About 80
public, private, and foreign banks as well as several smaller cooperative banks were
operating in 2020. At that time, India ranked 11th on the list of countries with the most
credit card users, far behind the United States with over one billion of plastic cards.
FUTURE PLANS NEED TO MADE BY BANKS IN ORDER

TO AVOID FRAUDS
Hacking and cyber theft are one of the dangers that plague the digital world.
Hackers can steal information and money from anywhere in the world. The challenge for
the governments is to set up a strong security system to protect the online transactions
from the hackers. Researchers have shown that if a cybercriminal gets a victim’s phone, it
is very easy to crack the PERSONAL IDENTIFICATION NUMBER (PIN) number and
gain access to the virtual wallet by using a software.
As per reports the ATM, credit card, debit card and net banking-related fraud has
gone up by more than 35% between the year 2012-13 and 2015-16 in India, According to
Reserve Bank of India (RBI). Also, the RBI data says that 8,765 cases were reported by
banks in the year 2012-13 and the corresponding figures for subsequent three years were
9,500 (2013-14), 13,083 (2014-15) and 11,997 (in the first nine months of 2015-16)
respectively.
Therefore, banks need to have a risk management model that proportionate with
their risk appetitions. However, the model you chosen should must ensure safety and
soundness of the bank’s financial position. Model Risk is the risk that theoretical models
used in pricing, trading, hedging and estimating risk will turn out to produce misleading
results. The effect of model risk on the financial performance of the bank can be
significant. The loss arising out of the model inaccuracy and consequent model risk can
be mitigated if the banks observe certain fundamental principles while making use of the
model.
SUGGESTIONS FOR TAKING PRECAUTIONARY
MEASURES TO MAINTAIN SECURITY WHILE USING
PLASTIC MONEY.
For Respondents
1. Customer need to read all the terms and conditions carefully before applying for
the plastic card facility provided by your financial institutions. This is prevent
users from feeling cheated or unaware of any of the rule afterwards.
2. Users should be very careful when entering their debit/credit card PIN numbers
and should not reveal their PIN numbers with your family members or colleagues
under any circumstances. It might cause you distress.
3. While making any online transactions check if the site is secured or authorised
and never save your card details in any application or website. It’s always a good
idea to type your PIN again and again rather than saving it or noted anywhere
else.
4. Insurance can prevent the risk of losing your plastic card. In market there are
some insurance players, such as Tata AIG who gave policies to protect your card.
The cost of replacing lost cards, wallets and so on is also covered. Therefore, be
aware of such faculties.
For Financial Institutions

1. In the today’s scenario where everything and everyone is preferring the paperless
and cashless work, there is an urgent major need of creating awareness about the
benefits of using plastic money so that people make the maximum use of it. And
they can avail the benefits of plastic money like loss of theft, eliminates carrying
cash etc.
2. Safety measures relating to fund transfer should be increased to encourage and
assure people so that the use of plastic money increases.
3. One of the most important suggestions for financial institutions to protect against
cyber crime is to maintain multiple levels of security should be maintained so that
there will be no data breach.
4. Transaction charges on online payment should be eliminated to encourage
customers to use plastic cards more.
5. Travel companies can offer discounts to encourage the customers to make use of
travel cards while travelling.
6. The thumb scan facility can be integrated into the use of plastic money, which
guarantees the safety and people get assured that they will use plastic cards.
FINDINGS
This research shows that there are almost similar males and females are using the plastic
money.
Age act as an important factor for use of plastic money. Age group between 18 to 25 are
more aggressively using facility of plastic money this study also shows that students and
working class people are using plastic money as compared to the older age group. The
people in the age group of 31- 50 are using plastic money for the different purpose. As
well as using plastic cards is famous among the students as it also reflects the prestige
among peers.
According to my survey 86% of people have their bank account.
Awareness among people is excellent as 100% of respondents are aware of plastic
money.
Majority of population that is 86% of people are using plastic money where as 14% of
people are still not using plastic money as modes of payments.
The analysis shows most of the people use debit card and credit card. Whereas people are
not so interested or not aware about using other plastic cards such as store card, smart
card etc.
Talking about convince in general respondent feels that online payment is most
convenient rather than cash and plastic money.
In terms of platform of plastic card, there is no monopoly in the there is a mixture of visa,
MasterCard, RuPay etc. here respondent have attempted in scatter way, thus we cannot
conclude that market dominated by which single company.
Various factors affect respondents to avail benefits of plastic money such as it eliminates
carrying of huge cash, Purchase and pay later, internationally acceptable, Risk of loss or
theft gets eliminate etc.
This study shows that peoples are using plastic money for various reasons like for
shopping, booking tickets, online purchase, money transaction, paying bills etc.
Majority of people have that is of respondents have ATM service near by their locality.
And only 1. % of people find it difficult to look out for ATM service.
This survey also shows that people have used lot of ATM services like for Cash
withdrawal, Balance inquiry, Reset ATM PIN, Fund transfer, Mini statement etc. But
70% of people use ATM service only for withdrawing cash.
Only 1.6% of respondents had visited bank for withdrawing cash in last week or month
otherwise 98% of people are doing their transaction without going in bank.
Most of respondent use plastic money sometimes and not day to day life. Thus, it speaks
that there is need to change the system or to bring new idea to the plastic card market.
According to survey 47% of people feels online payment is more convenient than other
payment modes. On the other side only 23% of respondent feel that plastic money is
more convenient.
Majority of people use online payment for purchasing household consumable goods and
utility bills.
Whereas 41% of people prefer plastic card while making payment for luxurious goods
and durable goods.
While travelling very least amount of people using plastic card to make payment. Thus, it
shows that due to unavailability of ATM services or looking for ATM service in new area
is hectic. And thus, people prefer using online payment and cash over card payment.
Majority of respondent feels that plastic money is not outdated its still in the use. There is
no doubt that E-banking is the best way for payment but due to incredible unquickens of
plastic card people still prefer using it.
Due to scam, frauds and cyber crimes 82% of respondent feel insecure or hesitate to use
plastic money.
I have also asked one of the hypothetical questions where I got the idea of what
respondent feel about future where they gave majority of votes to the E-money over
plastic money.
This research shows that 21% of people are highly satisfied with the use of plastic money
and 44% of people are satisfied with use of plastic money whereas 28% of people have a
neutral opinion towards plastic money and few percent of people are not satisfied with
facility of plastic money.
CONCLUSION
The results of the study have been stressed upon the convenience and ease of use
while paying for shopping, online purchase and money transaction by plastic money. The
basic motive behind the use of plastic money is that it eliminates of carrying huge cash
and other factor affect to use plastic money such as quick transaction and purchase and
pay later. also, the fact that the plastic money seems to be more portable, long durable life
all these features affect customer to use plastic money.
It is true that plastic had rapid growth in India. Even though there is substitute
product or service available in the market is online payment as modes of payment still
people have trust or faith on plastic money thus, 45% of people said that plastic money is
not outdated. They use it for making payment.
On the other hand, Security comes forward as a major cause for concern for the
population using plastic money. Most of people feel insecure or hesitate to use plastic
money due to increase of scam and fraud cases in India. Thus, banks need to take steps to
build better and safer payment gateways with high security programmed software which
does not give a lead to data theft or hacking of monetary details of the users. Banks
should educate people through awareness programs briefing about the uses of plastic and
the usage directions to the financially illiterate population as well as the existing
customers.
There is no doubt that plastic money is one of the great options to use but if you
do not manage your plastic card properly then you will lead to overspending, financial
burdens and financial stress. We are living in a world where almost every other person
holds plastic money along with cash. But we should know the advantages and
disadvantages of it in order to use the plastic money efficiently. It is true that at times
plastic money is of great help but we should admit that it is not the case always. One
should be wise when using plastic money or cash. Whatever it is, money has value and
we should not fall a victim for thefts be it online or not.
BIBLOGRAPHY
Dr. Subhani Muhammad Imtiaz, (2011). “Plastic Money/Credit Cards Charisma for Now
and Then” with emphasis on affordability and preference of them by consumers because
of their convenience attribute during all kind of daily transactions. European Journal of
Scientific Research (Vol.62.No1, pp.123-127.
Bansi Patel and Urvi Amin (2012), “Plastic Money: Roadmay Towards Cash Less
Society”, Paripex Indian journal Of Research, Vol. 1, No. 11, ISSN-2250-1991
Dr. Jaishu Antony (2018), A study on the impact of plastic money on consumer spending
pattern.
Dr. Radhabai Govt. Navin Kanya Mahavidyalaya, Rajpur 2015-17, ‘An Analysis of the
use of plastic Money in Chhanttisgarh.
Article
1. V L Srinivasan, 'Online banking and plastic card-related fraud in India increases
35 percent', 15 April 2016
2. Dr. Dhananjay Bapat, ‘Marketing of debit cards strategy to popularize Them’,
The Indian Banker, Volume V, No: 3 March 2010.
3. S.P.S. Paannu, ‘Banks gear up to make plastic money more secure for customers’,
Dec 28, 2016.
4. ‘The future: More Uses, More Models, More Scope’, Electronic for You, Volume
42, No: 9, September 2010.
Books
Plastic money: Constructing Markets for credit cards book by Akos Rona-Tas and Alya
Guseva
Website
https://www.scribd.com
www.icmrindia.org
www.wikipedia.org
Questionnaire
1. Name *
2. Gender *
 Male
 Female
3. Age *
 18-25
 26-35
 36-45
 Above 45 years
4. Occupation *
 Student
 Corporate employee
 Government employee
 Businessman
 Other:
5. Do you have Bank Account *

 Yes
 No
6. Are you aware of plastic money *

 Yes
 No
7. Do you use plastic money *

 Yes
 No
8. Which plastic money do you use *
 Debit card
 Credit card
 ATM
 Store card
 Other:
9. Which platform you use of plastic money *

 Visa
 MasterCard
 Rupay
 Maestro
 Other:
10. What are the factors made you to use plastic money *
 Eliminations carrying cash
 Quick transaction
 Risk of loss or theft
 Purchase and pay later
 Internationally acceptable
 Other:
11. For which purpose you use plastic money *

 Shopping
 Booking ticket
 Online purchase
 Money transaction
 Paying bills
 Other:
12. Do you have ATM service nearby your locality *

 Yes
 No
13. What are the ATM services you are aware of or have used it *?
 Cash withdrawal
 Balance enquiry
 Reset ATM PERSONAL IDENTIFICATION NUMBER (PIN)
 Transfer of fund
 Mini statement
 Other:
14. When did you visited bank for withdrawing cash?

 Last week/ month
 Last year
 Never visited
15. How often you use plastic money *

 At daily basis
 Sometimes
 Very rarely
16. According to you, which is the most convenient way to pay *

 Cash
 Plastic money
 Online payment
17. How do you make payments for purchase of household consumable and utilities
Bills *
 Cash
 Card
 Online payment
 Cheque
18. How do you make payments for purchase of luxury and durable goods *
 Cash
 Card
 Online payment
 Cheque
19. While traveling, According to you which is the preferred way of payment *
 Cash
 Card
 Online payment
 Traveller’s cheques
20. Do you think, due to you use E-banking plastic money has become outdated *
 Yes
 No
 Maybe
 No comment
21. Due to scam and fraud, do you feel insecure or hesitate to use plastic money *
 Yes
 No
 Sometimes
22. If you are the financial minister of the country, what would you prefer on higher
proportion *
 Paper money
 Plastic money
 E-money
23. Are you satisfied with using of plastic money *

 Highly satisfied
 Satisfied
 Neutral
 Not so satisfied
 Not at all satisfied
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PROJECT REPORT

"ANALYTICAL STUDY OF PLASTIC

Bachelor of Management Studies

R. A. Podar College of Commerce &

I, Vedant Sudhakar Bhaskar the student of T.Y.BMS

Course Coordinator Principal

Project Guide/ Internal Examiner

Sr No Name of the Topic Page

Banks consider as a greater participant in India’s financial system. The banking

Evolution of plastic cards:

1. The First plastic is Card: Charg-It

2. Diners Club Card is Formed

6. Invention of the Magnetic Stripe

8. Chip and Personal Identification Number (PIN) card

The advantages include:

2. Risk of Loss or Theft minimized:

6. Tracking transactions becomes easy:

9. Rewards and Cashback:

2. Plastic money is also not completely safe:

4. Service charge in certain cases:

5. Card too can get damaged:

 Advantages of Debit Card:

 Advantages of Credit Card:

Other Kinds of Cards

10. Smart Card:

11. Petro Card:

12. Fleet card:

Debit Card V/S Credit Card

Sr Point of Debit Card Credit Card

Parties Involved in transaction:

Cardholder: The owner of the card makes a purchase; the consumer.

2. Feinberg Richard A. (December 1986). It was originated that customers pick

6. Mandeep Kaur and Kamalpreet Kaur (2008), in their article, “Development of

8. Loewenstein and Hafalir in 2012 conducted a study on “The Impact of Credit

17. IMPACT OF PLASTIC MONEY ON BANKING TRENDS IN INDIA Sushma

 Pie charts and percentage

H0: There is no relationship between Occupation and Usage of plastic money.

H0: There is no relationship between Sex and Usage of plastic money.

DATA ANALYSIS AND INTERPRETATION

Are you aware about plastic money

Do you have ATM service near by your locality

when did you visited bank for withdrawing cash

FUTURE PLANS NEED TO MADE BY BANKS IN ORDER

For Financial Institutions

5. Do you have Bank Account *

6. Are you aware of plastic money *

7. Do you use plastic money *

9. Which platform you use of plastic money *

11. For which purpose you use plastic money *

12. Do you have ATM service nearby your locality *

14. When did you visited bank for withdrawing cash?

15. How often you use plastic money *

16. According to you, which is the most convenient way to pay *

23. Are you satisfied with using of plastic money *

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