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Jateen TyBBI BlackBook
Jateen TyBBI BlackBook
A Project Report on
A Project Submitted to
University of Mumbai for partial completion
of the degree of Bachelor in Commerce
By
Student name
Jateen Mayavanshi
2023- 2024
PRAGAT SAMAJIK SHIKSHAN SOCIETY SANCHALIT
DR. BABASAHEB AMBEDKAR SCIENCE MAHAVIDHYALAYA,
ADVOCATE GURUNATH KULKARNI COMMERCE AND
MANAGEMENT MAHAVIDYALAYA
VASAI (WEST) PALGHAR – 401 202
AFFILIATED TO UNIVERSITY OF MUMBAI
NAAC ACCREDITED WITH “C” GRADE
Certificate
This is to certify that (Jateen Mayavanshi) has worked and duly
completed his / her project work for degree of bachelor in Banking and
Insurance under faculty of commerce in the subject of (Banking) and
his / her project is entitled, “Factors Behind The Use Of Plastic Money”
under by supervision.
I further certify that the entire work has been done by the learner under
my guidance and that no part of it has been submitted previously for
any Degree or Diploma of any University.
It is her/ his own work and facts reported by her/his personal findings
and investigations.
Date of submission:
PRAGAT SAMAJIK SHIKSHAN SOCIETY SANCHALIT
DR. BABASAHEB AMBEDKAR SCIENCE MAHAVIDHYALAYA,
ADVOCATE GURUNATH KULKARNI COMMERCE AND
MANAGEMENT MAHAVIDYALAYA
VASAI (WEST) PALGHAR – 401 202
AFFILIATED TO UNIVERSITY OF MUMBAI
NAAC ACCREDITED WITH “C” GRADE
Declaration by learner
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.
JATEEN MAYAVANSHI
Certified by
Acknowledgment
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. Adil Siddiqui for providing the necessary
facilitiesrequired for completion of this project.
I take this opportunity to thank our Coordinator Mr. Amit Tambe, for her moral
support and guidance.
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.
SUMMARY
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 paymenthas developed after the privatization and
globalization. Customers have showed theirpreference over the usage of the
plastic money generally over a period of time in the bankingprocess.
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 40 respondents by non-probabilistic convenience sampling
method from a city 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.
In particular these are required to appear on a credit card are name of the customer, 16 digit
card number, validity date, the name of the issuing bank, signature panel, magnetic strip and
personal identification number.
distinct phases. They are as mentioned below: 1. Early phase from 1786 to 1969 of Indian
Banks 2 .Nationalization of Indian Banks and up to 1991 prior to Indian banking sector
Reforms. New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.1 Phase I The General Bank of India was set up in the
year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company
established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as
independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders. During the first
phase the growth was very slow and banks also experienced periodic failures between 1913
and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning
and activities of commercial banks, the Government of India came up with The Banking
Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with
extensive powers for the supervision of banking in india as the Central Banking Authority.
Phase II Government took major steps in this Indian Banking Sector Reform after
independence. In 1955, it nationalized Imperial Bank of India with extensive banking
facilities on a large scale specially in rural and semi-urban areas. It formed State Bank of
India to act as the principal agent of RBI and to handle banking transactions of the Union and
State Governments all over the country. Seven banks forming subsidiary of State Bank of
India was nationalised in 1960 on 19th July, 1969, major process of nationalisation was
carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14
major commercial banks in the country was nationalised. Phase III This phase has introduced
many more products and facilities in the banking sector in its reforms measure. In 1991,
under the chairmanship of M Narasimham, a committee was set up by his name which
worked for the liberalisation of banking practices. The country is flooded with foreign banks
and their ATM stations. Efforts are being put to give a satisfactory service to customers.
Phone banking and net banking is introduced. The entire system became more convenient and
swift. Time is given more importance than money.
HISTORY OF MONEY:
Credit cards as we know them today date back about 60 years, but buying on credit has been
around for a while. European merchants offered credit vouchers to customers as early as the
1890s. Stores also offered customers a paper or metal “card” that could be used only in their
stores and for years, it was up to each store to approve and monitor their customer‟s
creditworthiness. That changed after the Second World War, with what is largely considered
to be the first plastic charge card: The Diners‟ Club card, Introduced in New York City in
1950, the card al owed Diners‟ Club members to eat at 27 restaurants in New York City on
credit. However cardholders had to pay the balance back in ful to the Diners‟ Club within 30
days.
Operation of Plastic Money Figure 1 illustrates the general structural model common to most
electronic money systems, including participants and their in-tractions. Cardholder is the
person in whose name the card is and who being in possession of the card is legally entitled
to buy goods and services from merchant establishment and is under an obligation to pay for
the goods and services. The cardholder is an agreement with the issuer to pay for the goods
and services bought on the card along with the various applicable charges and the interest due
on the card. This agreement is known as the „cardholder agreement‟ and is ratified by the
cardholder as soon as he receives his card and sign on it. Merchant establishment (MEs) is a
shop or establishment which accept the card offered by the cardholder as a mean of payment
for the goods and services provided. The merchant establishment (MEs) enters into an
agreement with a bank, known as acquiring bank (since it acquires the business from the
MEs). Under this agreement, the merchant establishment provides goods and services to the
cardholder on credit and receives money from the acquiring bank within the few days
(generally 1-4 days). The MEs has to pay the commission to the acquirer for the services
provided. The commission generally ranges between 2%-5% of the total sales value. MEs can
be divided into two main categories based on the machines provided to them by the acquirers.
The machines are provided based on the volumes of the sale of the MEs. A high volume MEs
provided with an electronic data capture (EDC) machine while a low volume MEs is
provided general y with an imprinters are known as „manual merchant‟. Such merchants are
given „floor limits‟ by the acquirers.
The floor limit is an amount specified
by the acquirer, below which the
merchant need not take an approval
but he must refer to hot card bulletin.
If the transaction amount is above the
floor limit, the merchant must take
approval from his acquiring bank.
Acquiring bank is retained by the
retailer or merchant to process the payment card transaction on their behalf and licenses the
merchant to accept credit cards of one or more of the worldwide issuing bodies such as
VISA, MASTER, DISCOVER etc. The acquirer need not always be a bank but can be a
financial institution. In India, acquirers are known to be banks alone. The acquirers that
processes the transaction, routes the authorization request to the card issuing bank. The
merchant provides his acquirer with the charge slips for the day‟s transaction, irrespective of
whether the acquirer was the issuer of the cards accepted by the merchant. Thus, it is clear
that the acquirer need not necessarily be an issuer of the card which will be accepted at the
MEs. The acquirer pays the merchant the total transaction value minus a commission, known
as a service fee, which is agreed upon when the negotiations for the acquiring of the merchant
were taking place. The merchant thus gets the instant reimbursement for the goods sold.
Issuer/Issuing Bank is an institution which has issued the card to the cardholder. The issuer
has the responsibility for transaction that are put through on cards that they have issued and
responsible for debiting funds from the relevant cardholder‟s account. The card cycle works
when cardholder buys certain goods at a shop and pays through his card. The merchant has
three copies of the chargeslips. One for his own records, one for the customer (which he
signs), and one for his acquirer. The merchant present the copy of the charge slip to his
acquiring bank. The acquiring bank pays the merchant, on the basis of charge slip the amount
of transaction minus its own commission. The rate of this commission is lesser than the rate
of the merchant commission. The issuer consolidates all transaction for each card issued and
presents the charges to the cardholder in the form of monthly bil or „statement‟. The
cardholder has two options on receiving the statement. One is that he can pay off the full
amount due on his card on or before the due date, in which case, he is said to using his card
as a charge card rather than a credit card since he is not utilizing card facility on his card. The
second option is that he pays the minimum amount due (MAD) before the due date, or any
percentage greater than the MAD but lesser than the total amount due and „roll over‟ or carry
over the balance amount to the next month for a small finance amount charge. The small
finance charges generally varies between 1.5%-3% per month. In USA there is law which
prohibits issuers from charging a finance charges 4% or more per month, unfortunately there
is no such law in existence in India at the moment. Of course, if cardholder fails to pay even
the MAD, he has to pay either a service charge or fixed finance charge(depending on the
rules of the issuer) plus the interest charges. In the certain cases, where the acquirer and the
issuer are the same, the cycle have the three players instead of four. In this case, the issuer
makes a little more profit than with the presence of an acquirer in the cycle, since he doesn‟t
have to pay the commission to the acquirer. When translated over a transactions per day, this
means a lot of saving to the issuer. Thus there are many issuers who are vigorously pursuing
the business of acquiring too. The actions in this model are: credit (loading) means
transferring the monetary value from the issuer to the payment instrument (e.g. electronic
purse) of client. Debit (purchase, payment) means transferring the monetary value from
payment instrument of client to the payment instrument of merchant (that is usually payment
terminal). In the terminal is then created payment transaction, that contains the electronic
money and other payment details. Transaction collecting means transferring the payment
transactions from the merchant to the acquirer. Payment clearing means clearing of payment
request between acquirer and issuer.
Client
(Customer)
Debit Operation (Payment)
Credit Operation (Loading)
Client Bank
Merchant
(issuer)
Clearing Collecting
Merchant
Bank
(aquirer)
From the security point of view the most sensitive operations are credit and debit. The main
threats are concentrated in these two operations. These threats include using of fake payment
instrument, modifying communications of payment instrument, and illegal crediting. Other
two operations are less sensitive and the probability of security incident during these
operations is much smaller. Physical devices, such as smart cards or personal computers, are
held by clients and by merchants. Merchants interact with clients and with their acquiring
bank or other collection point, such as a third-party payment processor. Issuers receive funds
in exchange for prepaid balances distributed to clients and manage the “float” in the system
that provides financial backing for the “value” issued to consumers. In some cases, other
intermediaries, such as banks, retailers or service providers, distribute stored-value devices
and balances directly to consumers. The system may include a central clearing house or
system operators.
EMERGING OF THE PLASTIC MONEY IN INDIAN FINANCIAL
SYSTEM
Indian economy has flourished with the advent of Liberalization, Privatization and
Globalization. Banking sector is not an exception too. These reforms have presented a
challenge before Indian banking sector to shake hands with the pace of new technology.
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors However,
mere technology up gradation or introduction of innovative products cannot improve the state
of affairs until customers don‟t respond to it positively. Hence, it becomes very necessary for
the banks to offer the services or products while taking into consideration the customers‟
needs, preferences, perceptions and convenience. The banks‟ services are not just confined to
their particular branch customers only. Customer is now treated as customer of banks as a
whole, which means that he is now capable of enjoying facilities such as anywhere, anytime
banking (Kamesam, 2003).
This concept as enabled the bankers to establish long term connection with their customers.
Hence, Electronic banking is the new trend significantly adopted by banking sector
worldwide due to its wider scope for the customers as well as banks at large. Various
sophisticated products have been launched by the banks which help them to meet the basic
requirements of their customers. With entry of tech savvy private sector banks and foreign
banks, the competitive environment has started prevailing in banking sector too. No doubt,
Public sector banks have large network of traditional branches to approach their customers as
compared to the private and foreign players.
However, with the help of information technology, it has now become possible for banks to
deliver products and services efficiently and to improve customer base without opening new
branches.
Hence, these new private and foreign players are trying to compete with them on the basis of
adoption of new technological services like plastic cards, PC banking, Electronic Funds
Transfer (EFT), Internet banking etc. to approach the maximum customers inspite of having
less physical branches (Venkatesan and Kumar, 2007). Due to this reason, public sector
banks are also likely to move towards electronic banking, which ultimately leads the entire
banking sector to the remarkable improvement with respect to its efficiency, customer
services, productivity, profitability etc. Thus, Banks are now reengineering the way
in which their services can be reached to their customers by bringing in flexibility in their
“distribution channels” (De Sarkaret. al. 2001).
Traditionally, banks were only concerned with acceptance of deposits from customers and
lending surplus money to the suitable customer who want borrow at some rate of interest. The
most products being offered by banks were savings account, current account, term deposit
account and lending products being cash credit and term loans, Banker‟s main purpose was to
manage the savings of people through the mobilization of funds (Deva, 2005).
In the seventies, Banks in India started moving towards the social orientation due to which
nationalization took place in July 1969. The Indian Government nationalized the 14 largest
commercial banks and afterwards nationalization of 6 more commercial banks were followed
in 1980.
The main reason for the nationalization was to give the government more control of credit
delivery in order to discharge social obligations (Suneja, 1994). Due to this effect of
nationalization, Banks tried to uplift the neglected areas like agriculture, small scale
industries, tertiary sector, remote areas and weaker section of the society by providing them
with funds at reasonable rates of interest.
Thus, till nineties, the government was having direct control on the 90% of the banking
business in India (Suneja, 1994). While fulfilling the social objective, the cost of banking
operations increased and thus profitability of banks declined drastically. To overcome these
problems, it became necessary for the banks to introduce new products and services which
are commercially viable and helped them to improve their profitability and productivity
(Deva, 2005).
Hence, modem era has brought progressive change in banking industry as a whole which is
resulted from disintermediation process and information technology. New entrants (private
and foreign banks) in the banking industry generally known as New Generation tech-savvy
banks tend to introduce various innovative services while incurring minimum cost but also
suit the customer preferences.
This is the period when automation of banking operations has gained much importance
(Thakur and Singh, 2005).
Hence, over last one and a half decades the banking environment has changed progressively.
After financial sector reforms during nineties, the banking industry in India has witnessed
Remarkable changes due to information technology and computer applications. The
information technology has replaced the brick or traditional banking with the wide range of
e-banking products and services like ATM (Automated Teller Machine), Internet Banking,
Credit Cards, PC banking, EFTs, Debit Cards, Smart Cards etc. With the effect of this
changing environment, Indian banking has witnessed remarkable growth since 2006 as
banking sector is growing by 18% and it is 6 times more than the last decade growth.
Credit Cards
The term “credit card” general y refers to
a plastic card issued to a cardholder, with
a credit limit, that can be used to purchase
goods and services on credit or obtain cash
advances. It is issued by banks holding the
logo of one of the bank card association
like Visa, MasterCard, Dinners club etc.
after proper verification of accountholders.
Unlike debit cards, credit cards also
provide overdraft facility and customer can
purchase over and above the amount available in his account and thus regarded as authentic
payment tool (Mishra, 2007). Interest charges are levied on the unpaid balance after the
payment is due. Cardholders may pay the entire amount due and save on the interest that
would otherwise be charged. Equated Monthly instalments (EMI) scheme is also offered by
some banks to the customers who make huge purchases so that they can feel convenient
while paying back the outstanding amount (Vardhaman, 2008). Clearing and settlement
through credit card is a simple and reliable process in which bank plays a crucial role.
Smart Card
A plastic card containing a computer chip and enabling the holder to purchase goods and
services, enter restricted areas, access medical, financial, or other records, or perform other
operations requiring data stored on the chip. Smart card is currently introduced by BRTS
which stands for Bus Rapid Transit Services in Gujarat in India.
Charge Card
A charge card carries all the features of credit cards. However, after using a charge card you
will have to pay off the entire amount billed, by the due date. If you fail to do so, you are
likely to be considered a defaulter and will usually have to pay up a steep late payment
charge.
Amex Card
Amex stands for American Express and is one of the well-known charge cards.
This card has its own merchant establishment tie-ups and does not depend on
the network of MasterCard or Visa.
MasterCard and Visa
MasterCard and Visa are global non-profit organizations dedicated to promote
the growth of the card business across the world. They have built a vast network
of merchant establishments so that customer‟s world-wide may use their
respective credit cards to make various purchases.
Debit Cards
Debit card is a magnetically encoded plastic card issued by banks which has
replaced cash and cheques. It allows the customers to pay for goods and services
without carrying cash with them. In some cases, debit card is multipurpose
which can also be used as ATM for withdrawing cash and to check account
balances. It is issued free of cost with the savings or current account (Mishra,
2007). Debit card is one of the best online e-payment tool through which the
amount of purchase is immediately deducted from customer account and
credited to merchant‟s account provided if that much amount is available in
customers account. It has overcome the delayed payment process of cheques,
due to which sometimes merchants have to suffer.There are currently two ways
that debit cards transactions are processed
1. Online debit(also known as PIN)
2. Offline debit ( also known as signature debit)
ATM Cards
These cards are typically used at automatic teller machines (ATMs) to
withdraw cash, make deposits, or transfer funds between accounts. ATM card is
used by inserting the card into an automatic teller machine and enter a personal
identification number, or PIN, for security. The system checks the account for
adequate funds before permitting any transaction.
ADVANTAGES OF PLASTIC MONEY
• Purchasing Power:
Credit or Debit cards made it easier to purchase things. Now we
don‟t have any need to carry hard cash in a large amount. Plastic money is accepted
everywhere, anytime.
• Time Saving:
Through a credit card or debit card you can purchase anything from anywhere without spend
money on fare or cash transition. Just provide your card details to seller store or companies
and finalize your order. Now you don‟t have need to worry about time wastes. Use internet
for minimum time consuming.
• Extra Safety:
While you are not carrying cash, how can it be lost? But if your card has lost, just contact to
your bank or financial institution, which provide you cards. It will block the account and
nobody can draw a single coin without your permission. So it is 100% safe without any
tension.
• Fraud:
Credit cards can be stolen. A thief may be use them directly or to get their information
(which is required in money exchange). In today‟s technical intelligence it is also possible
to get a clone of any credit card or debit card, which works like original and they can be give
you a heavy financial loss. So be aware from credit cards fraud as they are like stolen your
money from your pocket without your information Steps taken by the other countries towards
cashless transaction- As per a recent Washington post article, in Sweden, only 3% of
transactions involve cash. Credit and Debit cards are dominant in Sweden payment system.
Not only in Sweden, but in most of the developed countries, above 90% of transactions are
cashless. Mobile payment is bringing new way of cashless payment system. Other prominent
countries are Norway, Austria, Finland etc.
In the United States today, only 7 percent of all transactions are done with cash, and most of
these transactions involve very small amounts of money. Another method that can be used to
make financial identification more secure is to use implantable RFID microchips.
RESERVE BANK OF INDIA PITCHES FOR CASHLESS SOCIETY
With the Indian economy expanding rapidly at more than 7.5% per annum and the middle-
class budding, several financial firms believe and predict that the use of plastic money in
India will become very popular. However, according to the recent estimates by the Reserve
Bank of India (RBI), the use of cashless transactions through credit card usage among Indians
is actually falling.
The Reserve Bank of India (RBI) has prepared a road map to provide card swipe machines to
more than one crore retail businesses in the next three years to promote electronic
transactions for ushering in a less-cash society in the country. According to the road map
prepared by the central bank for cash-less transactions, all schools and colleges in the country
will also be equipped to handle plastic transactions. According to an RBI estimate, only six
lakh retail traders accept credit card in the country. Steps are being taken to make the facility
available to at least one crore retailers by 2015.The government and its financial institutions
will initially bear the cost of each card swap machine made available to retailers.
CHAPTER 2 :- RESEARCH METHODOLOGY
2) To analyze the factors for adoption of plastic money this replaces the paper or cash money.
3) To determine the penetration of plastic money in day to day life over the paper or cash
money.
4) To study the future plans made by various banks and institutions for avoiding frauds
aroused due to plastic cards.
Consumer financing have become increasingly important in the private sector of India for the
last two decades. With the new reforms in the banking sector, the marketing of financial
products has become very competitive, creating a need for strategizing the marketing efforts.
This study investigates the shift of Indian consumers towards the use of plastic money, with
emphasis on credit cards. A survey of consumers holding (at least) one or no credit card were
used for data collection. Variables related to demographics such as age, income level and
gender have also been taken into consideration. This study makes (the) use of descriptive
variables in terms of analyzing the general attitude about the use of (Plastic Money) credit
cards and the factors contributing towards the selection of one particular credit card over the
other. A positive relationship has been found between the income level of a person and
his/her possession of the credit card. While making the choice of a credit card the trust in a
particular brand name seems to hold a very significant importance in the selection of a credit
card, instead of the logo of Visa or Master card. The profession of the person seems to play a
very interesting role with their behaviour towards credit cards. My study shows that the
bankers hold negative attitude towards the use of a (Plastic Money) or credit card. The
moderating variables include the marketing campaign of a particular bank, sales teams
support, openness from retailers for accepting credit card instead of cash, knowledge about
the true interest rate imposed by the banks. Based on my observations, suggestions have also
been made for managers to refine the target market.
Research Design
The research study is Exploratory in nature. The Study is been carried out by taking a survey
of 40 respondents by non-probabilistic convenience sampling method from a city by using
structured questionnaire and interview technique. .
Secondary data is collected through reference books, research papers, articles, and websites.
Type of Research
1. Exploratory research
2. Causal research
3. Descriptive research
Sources of Data
1) Primary sources
Questionnaire
2) Secondary sources
Textbooks
Review articles
Internet
4. Questionnaire
5. Interview
Population
Total 40 Randomly selected people mainly employed are taken for the Research.
Sampling Method
Convenient Sampling
Sample Size
1. Questionnaire
2. Interviews
At the time of our survey we had a personal meeting with the respondents and got
useful and implementable suggestions.
LIMITATIONS OF THE STUDY
the time for our study by respondent so we have to manage according to their time.
The respondent felt the questionnaire according to their mood and time so I couldn‟t
research properly.
Some of the human error has resulted for cancelling the questionnaire.
Some of the Respondents‟ responses are different from actuality as they are feeling of
theft of their resources and because of threat of leak of their personal information.
CHAPTER 3 :- LITERATURE REVIEW
1. The literature relating to the topic as under: Mandeep Kaur and Kamalpreet
Kaur(2008), in their article, “Development of Plastic Cards Market: Past, Present and
Future Scenario in Indian Banks” conclude that Indian banking sector is accepting the
challenge of information technology as all the groups of bankers have now recognized
it as essential requirement for their survival and growth in future Despite the strong
advances in e-payments, an estimated 90 percent of personal consumption
expenditure in India is still made with cash which indicates the tremendous growth
potential of this business. So this can be considered as mere beginning which
indicates the bright future prospects of plastic card market in India.
2. P Manivannan (2013) in his research paper “Plastic Money a way for cash Less
Payment System” examined that Plastic Money i.e. usage of Credit card was
measured a luxury, and has become needed. These plastic money and electronic
payments was and used by only higher income group. This facility extended not only
to customers in urban areas or cities, but also to customers residing in rural area.
However, today, with development of banking and trading activity, the fixed income
group or salaried classes are also start using the plastic money and electronic payment
systems and particularly Credit cards.
3. Anupama Sharma (2012)in her research paper “Plastic card frauds and the
countermeasures: 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.
4. Bansi Patel and Urvi Amin (2012)in their research paper “Plastic Money : Roadmay
Towards Cash Less Society” discussed that now days in any transaction Plastic
money becomes inevitable part of the transaction and with it life becomes more easy
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. In this research
paper an attempt has been made to study 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 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.
CHAPTER 4 :- DATA ANALYSIS AND INTERPRETATION
Que.-1. Do you have Idea about plastic money? Which of them are you aware about?
Not Aware 3 2 5
135 65 200
Female
Not Aware
Male
Not Aware
Que. 1 Interpretation:
Here we can see that the awareness seems to be little good but not 100% awareness can be
seen at any of the groups.
But more awareness in male than female we can see. Because only 2% of male are not aware
about the plastic money where in female though the female respondents were half by the
male the awareness was 97% and 3% of them are not aware.
100
Que.- 2. Interpretation:
Here as from the above bar chart we can see that the credit card users are 29 out of 200, Debit
card users are 78 out of 200 and the highest card users are ATM card holders as they are 91
out of 200 and only 2 persons from the sample size are using special oulet card which are Pay
in & i-mint card.
Que.-3 Which is the most convenient way to pay?
Que.-3. Interpretation:
Here 43.5% of the respondents are feeling that the Cash is the best alternative to pay and for
card only 17% of them are feeling best way to pay which shows still the awareness and usage
of Plastic money do not accelerated that much in the market.
And the ratio goes somehow equal to the cash users for paying because again the people who
are convenient in both the way cash and card are 39.5%.
Que. 4 to 6. How do you make payment for purchases of household consumables?
Cash Cheque
Card ECS
goods
Cash, 67
50
Card, 47
40
30
20
10
Que.- 4 to 6: Interpretation:
Here the respondents have attempted all the alternatives in scatter way.
So that here we can conclude that they have their own convenience to pay such utility bills,
house hold items payment and luxury goods as well.
Here we cannot see the highest or lowest preference but scattered preference seems to be
taken place.
Que.-7. While travelling, According to you which is the preferred way of payment?
Travellers cheques
Que.-7. Interpretation:
Here 51% of the respondents are using cards (plastic money) while they travel, which shows
that the cards are the safest way while travelling for all kind of transaction to be made.
Only 38% of people are ready to carry cash while travelling and settlement of the payment
through the cash only.
Only 11% of the respondents are giving/using cheques while they travel.
Que.- 8. Do you find use of credit card/Plastic money to be safest modes of transaction?
Que.-8. Interpretation:
Here 55% of the respondents are feeling that Plastic money is the safest way for transaction,
which shows that the cards are the safest way for all kind of transaction to be made.
45% of people are ready to carry cash settlement of the payment through the cash only.
Que.-10. Give your preference in rank 1 to 3; when you do not prefer Paper money?
Rank
Increasing Duplicity Tear of paper money
Que.-10. Interpretation:
Here the highest rank i.e 1st is given by the majority of the respondents that they are not
preferring paper money because of the duplicity of the money. Which shows that the forgery
is taking place in the Indian market. So the usage of the plastic money must be given a big
push by the Government by taking care of the Public as well as the Financial System.
2nd highest rank is given that the feel that paper must be torn so that they are switching to the
Plastic Money which again shows that Indian market or RBI must think about to take more
care for the quality of the currency notes.
Que.-11. Interpretation:
Here 56% of the respondents are using cards (plastic money) are agreed that the cost of
plastic card is more expensive than that of money to carry is much less expensive.
44% of people are not agreed that it is expensive to carry a Card they feel that they are
getting proper services in front of the fees they pay so that.
Que.-12. DO you find it cheaper and Beneficial as if gives you one Month Credit
for Payment?
Yes
Que.-12. Interpretation:
Majority of i.e 96% people are agreed that they are need of the credit period for settlement of
the payment.
51
60
89
Que.-13. Interpretation:
Here Majority of the respondents are using cards (plastic money) are feeling that Paper
money is more reliable and secured way to settlement of the transaction.
30% of people are believing that plastic money is more reliable & secured.
25.5% of people are ready to carry cash as well as the Card both are the reliable and secured.
Que.-14. Which can be carried and kept easy and has more life?
Que.-14. Interpretation:
Here Majority of the respondents are using cards (plastic money) and feeling that it has more
life and kept easy. Which shows that Plastic Money has more life and can be kept easily.
Security Mesurement
Que.-16. Interpretation:
Here Majority of the respondents about 50 % are using cards (plastic money) are feeling that
Biological Imprints are the most secure measurement to the transaction.
About 40% of people believe that PIN make more reliable & secured.
Once in a year
Que.-19. Have you been victim for any credit/debit card fraud?
Yes
Que.-20. Rate the following in a scale of agreement.
Scale Of Agreement
5. Plastic money will penetrate in society more
Disagree
2. The OTP [One Time Password] protection is
180
Que.-24. If you are financial minister of the country, what would you prefer on
higher proportion?
Que.-26. Interpretation:
Here Majority of the respondents 95% are using cards (plastic money) are feeling that SMS
alerts way to settlement of the transaction.
Only 5% of respondents don‟t feel that only SMS or telephonic connection make each
transaction more secured.
CHAPTER 5 :- CONCLUSIONS/ SUGGESTIONS
1. The use of Plastic cards is more and moraine raising for online payment.
2. Around 50% of payments of the customers are done through credit/Debit cards. Sample
survey shows Debit cards are preferred over credit cards.
3. The main reason for the increase in plastic money is that the customers are not a victim
4. The customers have rated that the telephonic payment option is average due to long
timeliness and security concern for CCV/PIN number.
5. The survey and secondary data suggests that customers have hardly faced any
discrepancies with their bills.
6. The introduction of ATM machines has changed the banking process also.
Customers are preferring the ATM machines now to days due to that frequency of customers
7. The use of plastic cards has also been increased because banking industries has also
provided the 24x7 customer service for their customers.
8. The factors for adoption of plastic money over the cash and paper money are mon-
Discounts while shopping, No hassles of carrying cash, Security of money, Hassle free
EMI‟s, Easy to use, Personal Loan on Credit Card .
9. About 60% of the people are feeling that the plastic money will penetrate in society. So
we can conclude that the future of plastic money in India seem to be bright.
CONCLUSION
The rise in consumerism generated by economic reforms began in 1990‟s has also sparked
robust demand for plastic cards. The arrival of malls, multiplexes, online shopping stores and
shopping complexes encourage the customers to make use of plastic cards. The modern day,
Indian customers find it easier to make physical payment (credit card or debit card payments)
rather than carrying too much cash contributing to the growth of plastic money in the country.
The prevalence of intensifying competition has further fuelled the usage of plastic cards in
the country like never-before. It benefits the consumer through enhanced product offerings at
a lower cost and that too with lucrative deals delighted with rewards scheme, loyalty bonus
points, promotional campaigns etc. But some customers are not able to utilize cards
effectively due to its complex nature and they don‟t actual y know how to operate it for a
specific purpose. Thus, the banks should give them some training regarding its usage. The
banks can also provide them the facility to use plastic cards on trial basis so that they can
become more confident while using their own cards. The cost has also remained an issue in
the case of credit cards. The interest levied on the outstanding amount is very high which
sometimes takes the customers in debt trap ultimately discouraging the potential customers to
make use of it. However, all these hurdles will diminish over time and positively influencing
trends are expected to continue in the near and far future. Also, the growth of plastic cards in
future would depend upon the capacity building of the banks to meet the challenges and make
use of the opportunities profitably. However, the kind of technology used and the efficiency
of operations would provide the much needed competitive edge for success in plastic cards
business. Furthermore, in all these customers‟ interest is of paramount importance.
FINDINGS
• The use of these cards is more and more increasing for online payment.
• However, the Secondary data shows that majority of online transactions are made by
Cash, ECS.
7. Frequency to visit the bank & Method preferred for cash withdrawal
• Now a days people are not visiting banks more often to withdraw the cash.
• The use of these cards and also the introduction of ATM machines have changed the
banking process.
• Spending through debit or ATM cards, increased by 45% year-on-year
• Customers are preferring the ATM machines now to days.
1. Anupama Sharma (2012), “Plastic card frauds and the countermeasures: Towards a safer
payment mechanism”, International Journal of Research in Commerce, It & Management,
Vol. 2, No. 4.
2. Bansi Patel and Urvi Amin (2012), “Plastic Money: Roadmap Towards Cash Less
Society”, Perspex Indian journal Of Research, Vol. 1, No. 11, ISSN-2250-1991.
4. Kamesam Vepa (2003), “Indian Economic Scenario Yesterday, Today and Tomorrow”,
Speech, Reserve Bank of India, Retrieved April 08, 2008 from http://www.rbi.org.in/
scripts/BS_SpeechesView.aspx?Id=137
5. Khandelwal Ani K (2006), “Doing Business in India: The Big Picture Bankers
Perspective”, US-India Business Summit, Retrieved March 20, 2008, from www.
buyusa.gov/india/en/327.ppt
7. Manivannan P (2013), “Plastic Money a way for cash Less Payment System”, Global
Research Analysis, Vol. II, No. I.
8. Mishra Gaurie (2007), Indians Get Elastic with Plastic Money, The Economics Times,
Retrieved April 02, 2008 from http:// e c o n o m i c t i m e s . i n d i at i m e s . c o m
/articleshowl2382580.cms
Websites:
www.google.com
www.scribd.com
www.rbi.co.in
QUESTIONNAIRE
1. Do you have Idea about plastic money? Which of them are you aware of?
Credit card Others
Debit card All of them
ATM card No Idea than Skip to 9th Que.
2. Do you have any of them?
Credit card ATM Card
Debit card Specific Outlet card
3. According to you, which is the most convenient way to pay?
Cash Both
Card
4. How do you prefer to pay your utility Bills?
Cash ECS Online
Card Cheque Others
5. How do you make payment for purchases of household consumables?
Cash Cheque
Card ECS
6. How do you make payment for purchases of luxury and Durable goods?
Cash Cheque
Card ECS
7. While traveling, According to you which is the preferred way of payment?
Cash Cheque
Card DD
Travellers cheques
8. Do you find the use of credit card/Plastic money to be safest modes of the transaction?
Yes No
10. Give your preference in rank 1 to 3; when you do not prefer Paper money?
Fear of Theft 1 2 3
Increasing Duplicity 1 2 3
Tear of paper money 1 2 3
11. Do you find Credit Card to be expensive as many other charges are charged on it?
Yes No
12. DO you find it cheaper and Beneficial as if gives you one Month Credit for Payment?
Yes No
13. Which of the options given you consider more reliable and secured?
Paper money Both
Plastic Money
14. Which can be carried and kept easy and has more life?
Paper money Plastic money
15. Due to Duplicity of Paper money are you shifting to Plastic money?
Yes Others
No
16. Which Type of security measurement you expect for stepping misuse of Plastic Money?
Password PIN
Photo card Biological Imprints
17. Do you use credit or debit card online?
Yes No
18. How often do you visit the bank for cash withdrawal?
Once a week Once in a year
Once in a month Never
19. Have you been a victim of any credit/debit card fraud?
Yes No
20. Rate the following on a scale of agreement.
Strongly Agree on Agree Neutral Disagree Strongly Disagree
a. Customer care support provided by
credit/debit card provider
b. The OTP [One Time Password]
protection is enough for any online
transaction
c. Offers and Discounts while
shopping is attractive
d. Security of money
e. Plastic money will penetrate in
society more in future
21. Do you think that there should be any limit on daily/monthly transaction value?
Yes No
22. Do you prefer any add-on-cards on your credit/debit card?
Yes No
If Yes then in who‟s Name:-
Spouse Parents
Major Son or Daughter Close Friend
23. Do you think that more credit card/Debit card transaction in the country over cash
transaction will help to grab black money circulation in the economy?
Yes No
24. If you are a financial minister of the country, what would you prefer on
higher proportion?
Paper money Both in equal ratio
Plastic money
25. Do you go through all the term and conditions and policy terms of the credit/debit/ATM
cards before applying or getting one of them?
Maybe
Yes
No
you think the telephonic connection or SMS alerts make your each transaction much
26. Do
more secure?
Yes
No
27. Where do you see the Future of Cash & Credit card/Debit card?