Chandigarh School of Business

Masters of Business Administration

3rd Semester

Management of Financial Services

MBA 912-18

Lecture : Plastic Money

Subject In-charge:Ms.Muskan Pulani

Designation: Assistant Professor
Mail ID: muskan.j2605@cgc.ac.in
CAMPUS: JHANJERI, MOHALI
 Topics of Discussion

•Meaning & Concept of Plastic Money

•Types of Plastic Money
•Advantages
•Disadvantages

Topic Outcome: CO5: Explain the conceptual framework of Debt Securitization and
Plastic money in India.
 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 POS

CARD
 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.
 ADVANTAGES
 Substitute for cheque
 Convenience
 Faster mode of transaction #withdrawing cash
#making payments to third-party
#easy finalisation of a/c
 Multiple functioning
-Can be used to make payments at shops, hotels etc. where a Point of Sale(POS)
terminal 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 CVC or CVV (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 often as

convenient.
 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 off. They provide some
specials benefits or discounts to the holder of the card.
 Sources & References
• Financial Services by M Y Khan, McGraw Hill
Education (India) Pvt Ltd, 2013
• Merchant Banking by H.R. Machi Raju, New Age
International (P) Ltd., Publishers, 2010
 www.slideshare.com
 www.wikipedia.com
 www.google.com
 Topics to be covered in Next Lecture

•Asset Liability Management

THANK YOU.

For any doubts contact me during my office hours:

Day: Wednesday
Time: 2:00 - 2:40 PM
Contact No7696266298
Email ID: muskan.j2605@cgc.ac.in

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