PLASTIC MONEY

•WHAT’s PLASTIC MONEY???

 Plastic money or polymer money, made out of plastic

 A new and easier way of paying for goods and

services

 Introduced in the 1950s and is now an essential form of ready money

 It includes credit cards, debits cards, ATMs, smart cards, etc.

WHY USE PLASTIC MONEY??
 Easy to carry
 Easy to operate
 Safer to carry
 More Security
 Durable
 Multiple functions
Types of Plastic money

CREDIT CARD

CASH CARD or ATM

CARD DEBIT CARD

IN-STORE CARDS

PREPAID CASH CARD

CREDIT CARD

 A credit card can be viewed as a payment mechanism

which enables the holder of the card to purchase goods
(or services) without paying immediate cash; and make
a one-time payment at the end of a specified period
(known as the billing cycle which is usually a month)
with a provision for spreading this payment over several
easy installments….
CASH CARD or ATM
CARD
 also known as a bank card, client card, key card, or
cash card
 payment card provided by a financial institution to its
customers which enables the customer to use an automated
teller machine (ATM)
 for transactions such as: deposits, cash withdrawals,
obtaining account information, and other types of banking
transactions, often through interbank networks
 will not allow the holder to purchase anything directly with
it.
 In some countries, the two functions of ATM cards and debit
cards are combined into a single card called a debit card
or also commonly called a bank card. These are able to
perform banking tasks at ATMs and also make point-of-sale
transactions, both functions using a PIN.
DEBIT CARD POS
What is a debit card??

 also known as a bank card or check card

 is a plastic payment card that provides the cardholder
electronic access to his or her bank account(s) at a
financial institution
 can be used instead of cash when making purchases
 In some cases, the primary account number is assigned
exclusively for use on the Internet and there is no
physical card.
ADVANTAGE
S
 Substitute for cheque
 Convenience
 Faster mode of transaction
#withdrawing cash
#making payments to third-
party
#easy finalisation of a/c
 Multiple functioning shops,hotels,etc where a Point of Sale(POS) terminal
-Can be used to make payments at
is available
-Can be used to withdraw money from any ATM
 Can be easily obtained
 Security
 It keeps you within budget
 Accepted internationally
How to get a debit card

SAVINGS BANK
A/c
Debit card in detail

 (1) is the bank logo.

 (2) is the EMV chip(commonly referred to as 'Chip&Pin')
 (3) is the Hologram(This represents a valid card and is a sign that the
card is legal)
 (4) is the 16 digit card number
 (5) is the logo of the card type
 (6) is the expiry date
 (7) is the name of the cardholder
 (1) is the magnetic stripe.
 (2) is the signature strip
 (3) is the CVCormCVV(Card
verification code or value)code
TYPES OF DEBIT CARD SYSTEM

 Online Debit System: Online debit cards require electronic

authorization of every transaction and the debits are
reflected in the user’s account immediately.

 Offline Debit System: This type of debit card may be

subject to a daily limit, and/or a maximum limit equal to
the current/checking account balance from which it draws
funds. Transactions conducted with offline debit cards
require 2–3 days to be reflected on users’ account
balances.

 Electronic Purse Card System : Smart-card-based electronic

purse systems (in which value is stored on the card chip,
not in an externally recorded account, so that machines
accepting the card need no network connectivity)
Disadvantages

 Not accepted everywhere

 Laws protect the consumer from fraud much less than
with a credit card.
 Loss of card
 No cash-NO operation
 Restricted spending
 Hidden fees
 Record keeping is mandatory
 Internet scams
PRE-CAUTIONS....
 Change the PIN immediately the
card is received from bank

 Don't write down your PIN

number anywhere.Memorize it.

 Preferably use an ATM which is

within bank premises or manned
24 hrs by a security guard.

 While using the online

settlement,use the virtual keyboard

 Register yourself for SMS alert

whenever your account is accessed.

 Change your PIN numbers as

IN-STORE CARDS

 Store cards are credit cards which can only be used to

buy goods in one particular shop or chain of shops (a
number of shops owned by the same company). The
store card is provided by a particular shop that you can
use to buy goods at that shop, and you will pay for the
goods at a later date.
PRE-PAID CASH CARD

 As the name suggests the user will add credit to the

card themselves, and will not exceed that amount.
These are usually re-useable in that they can be 'topped
up' however some cards, usually marketed as Gift Cards
are not re-useable and once the credit has been spent
they are disposed of. They provide some specials
benefits or discounts to the holder of the card.
Credit Cards
What are Credit Cards?

Pre-approved credit which can be used for the

purchase of items now and payment of them later.
 Credit cards

• It is a plastic card having a magnetic strip,

issued by a bank or business authorizing the
holder to buy goods or services on credit. Also
called charge cards
• The concept of using a card for was first
described in 1887 by Edward Bellamy in his
utopian novel Looking Backward.
• The size of most credit cards is 85.60 ×
53.98 mm
 Eligibility For Getting The
Card
• Person should have a savings current account
in the bank.
• His assets and liabilities on a particular date
are reported to bank.
• A statement of annual or monthly income.
• He is considered credit worthy up to certain
limit depending upon his income, assets and
expenditure.
 Particulars Displayed On Credit
• Cards
Name of the customer
• 16-digit card number
• Validity date
• The VISA hologram and the VISA logo
• Name of the issuing bank
• Signature period
• Magnetic strip
• PIN
What does 16 digit means
 CLASSIFICATION OF
CREDIT CARDS

Based on mode Based on Based on Based on Based on

of credit status of geographica franchise/ issuer
recovery credit card l validity Tie-up Category

Individ- Corpor-
Charge Revolving Domestic Internation-
ual ate
Card credit card card al Card
Cards Cards

Domestic
Proprie- Master VISA
Tie-up
tary card Card Card
Standard Business Card
Gold Card
Card Card
Based on mode of credit recovery

• Charge Card-A card that charges no interest but

requires the user to pay his/her balance in full upon
receipt of the statement, usually on a monthly basis.
While it is similar to a credit card, the major benefit
offered by a charge card is that it has much higher, often
unlimited, spending limits.
• Revolving credit card-A line of credit where
the customer pays a commitment fee and is then allowed
to use the funds when they are needed. It is usually used
for operating purposes, fluctuating each month
depending on the customer's current cash flow needs
 Based on status of credit card

• Standard Card- it is a generally issued credit card

• Business Card- (Executive cards ) it is issued to
small partnership firms , solicitors, tax-
consultants ,for use by executives on their
business trips.
• Gold Card-a credit card issued by credit-card
companies to favoured clients, entitling them to
high unsecured overdrafts, some insurance cover,
etc
 Based on geographical validity

• Domestic card- Cards that are valid

only in India and Nepal are called
domestic cards.
• International Card- credit Cards that
are valid internationally are called
international cards.
 Based on franchise/ Tie-up

• Proprietary card- A bank issues such cards under

its own brands. Eg. SBI card Cancard of canara bank
• Master Card- this card is issued under the umbrella of
“MasterCard International”
• VISA Card – it is issued by any abnk having tie up with
“VISA international”
• Domestic Tie-up Card- it is issued by any abnk
having tie up with domestic credit card brands such
as CanCard and IndCard.
 Based on issuer Category

• Individual Cards- Non-corporate

cards that are issued to individuals
• Corporate Cards- Issued to corporate
and business firms.
 Innovative Cards

• ATM Cards
• Debit Crds- debits designated saving bank a/c.
• Private label Card- issued by retailers and
can be used
only in that retailer’s store.
• Affinity Group Cards- it can be used by
collection of people with some form of
common interest or relation ( professional
,alumni,retired persons org. )
Credit card cycle

• A card holder makes purchase , and present it

to the merchant instead of cash .
• The retailer will check the number on the
card
, and he will tally signature of voucher
and credit card .
• Vouchers are send to banks, which in turn
reimburses it for the customer’s purchase.
Credit card cycle

• Purchase of goods and

service on card
Credit purchase
• marchant delivers goods after taking an authenticated credit card
and noting the number and taking signature on certain forms.
Credit card processing

• Marchant raises the bill for the purchase and sends it to

the credit card issuing bank for payment
Bill raising

• Issuing bank pays amount to the merchant

establishment
payment

• Issuing bank raises bill on the credit cardholder and

Bill to card holder sends it for payment

• Credit card holder makes the payment to

the issuing bank
Card payment
Mechanics of Credit Card
Operation Contract for credit card (1)

Issue of credit card (2)

Card User /
Card Issuing Bank
Payment of credit card(3) Customer

Clearing and settlements (7)

Charging of credit card Purchase of

and raising bills (4) goods and
services (3)

Submission of bill
for collection (5) Merchant
Marchant’s bank
establishment
Payment for bills (6)
 Advantages

To Cardholders :
• Simple, convenient and can be substituted for cash
• Convenient method of payment
• He need not approach a bank for taking credit
• Credit cards issued by leading banks are acceptable in many
countries
• Holders can withdraw cash from any branch of major banks
worldwide.
• Issuer of card provides 24 hrs customer helpline available
across the world in case of any emergency.
To Merchants/ Shopkeepers :
• Guaranteed payment
• Lessens the security risk of holding
the cash
• Overseas visitors may purchase
more, providing new market for
retailer
To credit card companies/ Banks :
• Source of revenue
- Joining fee
- card renew fee
- services charges from retailers
- Interest charged to customer
 Disadvantag
To cardholders : es
• Loss or stealing of card
To Merchants/ Shopkeepers :
•Retailers are required to pay a certain fee and service
charges at an agreed percentage of their credit
card
sales. :
To credit card companies
• Risk of bad debt
• Risk of fraud
 Safety Tips
 Sign card with signature
 Do not leave cards lying around
 Close unused accounts in writing and by phone, then cut up
the card
 Do not give out account number unless making purchases
 Keep a list of all cards, account numbers, and phone
numbers separate from cards
 Report lost or stolen cards promptly
HAVE A NICE
DAY………