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Executive summery

Plastic Money business is definitely going big time here in Pakistan. In a country

where two years back people have hardly heard the word plastic money or credit

card, more than 7000 merchants are accepting above 140,000 cards.It has been estimated that there are likely to be around half million potential cardusers in the near future. This forecasting derives credibility from the fact that moreand more local and international financial institutions are exhibiting enthusiasm inthis direction. This in turn reflects prospects in Pakistan market in accommodatingnumerous credit card competitors operating on the circuit, ensuring healthy andcompetitive card business deals So we have also made our project on this topic our

project includes

History of money

General Types of Plastic money

Global players in credit cards

Scenario of plastic money in pakistan

Analysis of banking products

BankAlfalah limited

Standered chartered bank

Survey

SWOT analysis

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BARTER:

The first people didn't buy goods from other people with money. They used barter. Barter is theexchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestockwas often used as a unit of exchange. Later, as agriculture developed, people used crops for barter.For example, I could ask another farmer to trade a pound of apples for a pound of bananas.

SHELLS:At about 1200 B.C. in China, cowry shells became the first medium ofexchange, or money. The cowry has served as money throughouthistory even to the middle of this century.

FIRST METAL MONEY:China, in 1,000 B.C., produced mock cowry shells at the end of the StoneAge. They can be thought of as the original development of metal currency.In addition, tools made of metal, like knives and spades, were also used inChina as money. From these models, we developed today's round coins thatwe use daily. The Chinese coins were usually made out of base metalswhich had holes in them so that you could put the coins together to make achain.

SILVER:At about 500 B.C., pieces of silver were the earliest coins. Eventually in time they took theappearance of today and were imprinted with numerous gods and emperors to mark their value.These coins were first shown in Lydia, or Turkey, during this time, but the methods were usedover and over again, and further improved upon by the Greek, Persian, Macedonian, and Romanempires. Not like Chinese coins, which relied on base metals, these new coins were composedfrom scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

LEATHER CURRENCY:In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces ofwhite deerskin edged in vivid colors were exchanged for goods. This is believed to be thebeginning of a kind of paper money.

NOSES:

During the ninth century A.D., the Danes in Ireland had an expression "To pay through the nose."It comes from the practice of cutting the noses of those who were careless in paying the Danishpoll tax.

PAPER CURRENCY:From the ninth century to the fifteenth century A.D., in China, the first actual paper currency wasused as money. Through this period the amount of currency skyrocketed causing severe inflation.

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Unfortunately, in 1455 the use of the currency vanished from China. European civilization stillwould not have paper currency for many years.

POTLACH:In 1500, North American Indians engaged inpotlach, a term that describes the exchange of gifts at

banquets, dances, and various rituals. Since the trading of gifts was so important in figuring theleaders community status, potlach went out of control as the gifts became more extravagant in aneffort to surpass others' gifts.

WAMPUM:In 1535, though likely well before this earliest recorded date, strings of beads made from clamshells, called wampum, are used by North American Indians as money. Wampum means white, the

color of the clam shells and the beads.

GOLD STANDARD:In 1816, England made gold a benchmark of value. This meant that the value of currency was

pegged to a certain number of ounces of gold. This would help to prevent inflation of currency.The U.S. went on the gold standard in 1900.

DEPRESSION:Because of the depression of the 1930's, the U.S. began a world wide movement to end tyingcurrency to gold. Today, few nations tie the value of their currency to the price of gold. Othergovernment and financial institutions now try to control inflation.

TODAY:At present, nations continue to change their currencies. For example, the U.S. has already changedits $100 and $20 banknotes. More changes are in the works.

TOMORROW:Tomorrow is already here. Electronic money (or digital cash) is already being exchanged over theInternet.

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ATM CARDS

HISTORY OF ATM CARDS:Don Wetzel has been

credited with developing the first modern ATM. The ideacame to him in 1968 while waiting in line at a Dallas bank,after which he proposed a project to develop an ATM tohis employer, Docutel.22 A major part of the developmentprocess involved adding a magnetic stripe to a plastic cardand developing standards to encode and encryptinformation on the stripe. A working version of theDocutel ATM was sold to New Yorks Chemical Bank,which installed it in 1969 at its Rockville Center (Long Island, N.Y.)Office Although the DocutelATM did use the modern magnetic stripe access card, the technology remained primitivecompared with todays. The Docutel ATM only dispensed cash and was an offline machine. Toenable payment processing, the machine printed a transaction record that was MICR encoded.By the early 1970s, ATM technology advanced to the system we know today. ATMs were firstaccessed primarily with credit cards, but in 1972, City National Bank of Cleveland successfullyintroduced a card with an ATM but not a credit function.24 ATMs were developed that could takedeposits, transfer money from checking to savings or savings to checking, provide cash advancesfrom a credit card, and take payments.

ATM CARD:An ATM card (also known as a bank card, client card, key card or cash card) is an ISO/IEC 7810card issued by a bank, credit union or building society.

It can be used:y at an ATM for deposits, withdrawals, account information, and other types of transactions,

often through inter bank networks

y at a branch, as identification for in-person transactionsy at merchants, for EFTPOS (point of sale) purchasesUnlike a debit card, in-store purchases or refunds with an ATM card can generally be made inperson only, as they require authentication through a personal identification number or PIN. Inother words, ATM cards cannot be used at merchants that only accept credit cards.However, other types of transactions through telephone or online banking may be performed withan ATM card without in-person authentication. This includes account balance inquiries, electronicbill payments or in some cases, online purchases.

In some countries, the two functions ofATM cards and debit cards are combined into a single cardcalled a debit card or also commonly called a bank card. These are able to perform banking tasks atATM's and also make point-of-sale transactions, both functions using a PIN. Europe's Maestro areexamples of networks that link bank accounts with point-of-sale equipment.Magnetic stripe cloning can be detected by the implementation of magnetic card reader heads andfirmware that can read a signature embedded in all magnetic stripes during the card productionprocess. This signature known as a "MagnePrint" or "BluPrint" can be used in conjunction with

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common two factor authentication schemes utilized in ATM, debit/retail point-of-sale and prepaidcard applications.ATM Cleaning Cards are the primary means of cleaning ATM machines to ensure that themachine stays functioning properly.

ATMAn automated teller machine (ATM) is a computerizedtelecommunications device that provides the customers of afinancial institution with access to financial transactions inpublic space without the need for a human bank teller onmost modern ATMs, the customer is identified by insertinga plastic ATM card with a magnetic stripe or a plasticsmartcard with a that contains a unique card number andsome security information, such as an expiration date orSecurity is provided by the customer entering a

identification number" personal identification number

(PIN).Using an ATM, customers can access their bank in order to

make withdrawals (or credit card cash advances) and checktheir account balances as well as purchasing mobile cellphone prepaid credit. ATMs are known by various other names including automated transactionmachine, automated banking machine, money machine, bank machine, cash machine, hole-in-the-wall, cash point etc.

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DEBIT CARDS

HISTORY OF DEBIT CARD:The history of debit card implies that the concept of debit card is not new. History of debit carddates back around 20 years ago which highlighted the introduction of e-commerce and alternativemeans of payment.

DEBIT CARD:A debit card (also known as a bank card or check card) is a plastic card which provides analternative payment method to cash when making purchases. Functionally, it can be called anelectronic check, as the funds are withdrawn directly from either the bank account, or from theremaining balance on the card. In some cases, the cards are designed exclusively for use on theInternet, and so there is no physical card.The use of debit cards has become widespread in many countries and has overtaken the check andin some instances cash transactions by volume. Like credit cards, debit cards are used widely fortelephone and Internet purchases, and unlike credit cards the funds are transferred from the bearer'sbank account instead of having the bearer to pay back on a later date.Debit cards can also allow for instant withdrawal of cash, acting as the ATM card for withdrawing

cash and as a cheque guarantee card. Merchants can also offer "cashback/cashout" facilities tocustomers, where a customer can withdraw cash along with their purchase.

TYPES OF DEBIT CARD:There are currently three ways that debit card transactions are processed; Although many debitcards are of the Visa or MasterCard brand, there are many other types of debit card, each acceptedonly within a particular country or region.

y online debit card /PIN debity offline debit card/signature debity Electronic Purse Card

ONLINE DEBIT CARD:Online debit cards require electronic authorization of every transaction and the debits arereflected in the users account immediately. The transaction may be additionally secured withthe personal identification number (PIN) authentication system and some online cards requiresuch authentication for every transaction, essentially becoming enhanced automatic tellermachine (ATM) cards. One difficulty in using online debit cards is the necessity of an

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electronic authorization device at the point of sale (POS) and sometimes also a separate PINpad to enter the PIN, although this is becoming commonplace for all card transactions in manycountries. Overall, the online debit card is generally viewed as superior to the offline debit card because of its more secure authentication system and live status, which alleviates problemswith processing lag on transactions that may have been forgotten or not authorized by the

owner of the card.

OFFLINE LINE DEBIT CARD:Offline debit cards have the logos of major credit cards (e.g. Visa or MasterCard) or majordebit cards (e.g. Maestro in the United Kingdom and other countries, but not the United States)and are used at the point of sale like a credit card. This type of debit card may be subject to adaily limit, and/or a maximum limit equal to the current/checking account balance from whichit draws funds. Transactions conducted with offline debit cards require 23 days to be reflectedon users account balances. In some countries and with some banks and merchant serviceorganizations, a "credit" or offline debit transaction is without cost to the purchaser beyond theface value of the transaction, while a small fee may be charged for a "debit" or online debit

transaction (although it is often absorbed by the retailer). Other differences are that online debitpurchasers may opt to withdraw cash in addition to the amount of the debit purchase (if themerchant supports that functionality); also, from the merchant's standpoint, the merchant payslower fees on online debit transaction as compared to "credit" (offline) debit transactions.

ELECTRONIIC PURSE CARD:Smart-card-based electronic purse systems (in which value is stored on the card chip, not in anexternally recorded account, so that machines accepting the card need no network connectivity)were tried throughout Europe from the mid-1990s, most notably in Germany, Austria,Belgium, The major boom in smart card use came in the 1990s, with the introduction of thesmart-card-based SIM used in GSM mobile phone equipment in Europe. With the ubiquity of

mobile phones in Europe, smart cards have become very common.

ADVANTAGES AND DISADVANTAGES

ADVANTAGES:Debit and check cards, as they have become widespread, have revealed numerous advantages anddisadvantages to the consumer and retailer alike. Advantages are as follows;

y A consumer who is not credit worthy and may find it difficult or impossible to obtain acredit card can more easily obtain a debit card, allowing him/her to make plastictransactions.

y Use of a debit card is limited to the existing funds in the account to which it is linked(except cases of offline payments), thereby preventing the consumer from racking up debtas a result of its use, or being charged interest, late fees, or fees exclusive to credit cards.

y For most transactions, a check card can be used to avoid check writing altogether. Checkcards debit funds from the user's account on the spot, thereby finalizing the transaction atthe time of purchase, and bypassing the requirement to pay a credit card bill at a later date,or to write an insecure check containing the account holder's personal information.

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y Like credit cards, debit cards are accepted by merchants with less identification andscrutiny than personal checks, thereby making transactions quicker and less intrusive.Unlike personal checks, merchants generally do not believe that a payment via a debit cardmay be later dishonored.

y Unlike a credit card, which charges higher fees and interest rates when a cash advance isobtained, a debit card may be used to obtain cash from an

ATM or a PIN-based transactionat no extra charge, other than a foreign ATM fee.

DISADVANTAGES:

The Debit card has many disadvantages as opposed to cash or credit:

y Some banks are now charging over-limit fees or non-sufficient funds fees based upon pre-authorizations, and even attempted but refused transactions by the merchant (some ofwhich may not even be known by the client).

y Many merchants mistakenly believe that amounts owed can be "taken" from a customer'saccount after a debit card (or number) has been presented, without agreement as to date,payee name, amount and currency, thus causing penalty fees for overdrafts, over-the-limit,amounts not available causing further rejections or overdrafts, and rejected transactions bysome banks.

y In some countries debit cards offer lower levels of security protection than credit cards[6].Theft of the users PIN using skimming devices can be accomplished much easier with aPIN input than with a signature-based credit transaction. However, theft of users' PINcodes using skimming devices can beequally easily accomplished with a debittransaction PIN input, as with a credittransaction PIN input, and theft using a

signature-based credit transaction isequally easy as theft using a signature- baseddebit transaction.

y In many places, laws protect theconsumer from fraud a lot less than witha credit card. While the holder of a creditcard is legally responsible for only aminimal amount of a fraudulenttransaction made with a credit card,which is often waived by the bank, theconsumer may be held liable for

hundreds of dollars in fraudulent debittransactions. The consumer also has a much shorter time (usually just two days) to reportsuch fraud to the bank in order to be eligible for such a waiver with a debit card [6], whereaswith a credit card, this time may be up to 60 days. A thief who obtains or clones a debitcard along with its PIN may be able to clean out the consumer's bank account, and theconsumer will have no recourse.

y In the UK and Ireland, among other countries, a consumer who purchases goods or serviceswith a credit card can pursue the credit card issuer if the goods or services are not delivered

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or are unmerchantable. While they must generally exhaust the process provided by theretailer first, this is not necessary if the retailer has gone out of business. This protection isnot provided by legislation when using a debit card but may be offered to a limited extentas a benefit provided by the card network, e.g. Visa debit cards.

y When a transaction is made using a credit card, the bank's money is being spent, andtherefore, the bank has a vested interest in claiming its money where there is fraud or adispute. The bank may fight to void the charges of a consumer who is dissatisfied with apurchase, or who has otherwise been treated unfairly by the merchant. But when a debitpurchase is made, the consumer has spent his/her own money, and the bank has little if anymotivation to collect the funds.

y In some countries, and for certain types of purchases, such as gasoline (via a pay at thepump system), lodging, or car rental, the bank may place a hold on funds much greater thanthe actual purchase for a fixed period of time

[6]. However, this isn't the case in other

countries, such as Sweden. Until the hold is released, any other transactions presented tothe account, including checks, may be dishonored, or may be paid at the expense of anoverdraft fee if the account lacks any additional funds to pay those items.

yWhile debit cards bearing the logo of a major credit card are accepted for virtually alltransactions where an equivalent credit card is taken, a major exception in some countriesis at car rental facilities. In some countries car rental agencies require an actual credit cardto be used, or at the very least, will verify the creditworthiness of the renter using a debitcard. In these unspecified countries, these companies will deny a rental to anyone who doesnot fit the requirements, and such a credit check may actually hurt one's credit score, aslong as there is such a thing as a credit score in the country of purchase and/or the countryof residence of the customer.

WHAT IS THE DIFFERENCE BETWEEEN A DEBIT CARD AND A

CREDIT CARD?

The difference between a "debit card" and a "credit card" is that the debit card deducts the balancefrom a deposit account, like a checking account, where the credit card allows the consumer tospend money on credit to the issuing bank. In other words, a debit card uses the money you haveand a credit card uses the money you don't have. "Debit cards" which are linked directly to achecking account are sometimes dual-purpose, sothat they can be used as a credit card, and can becharged by merchants using the traditional creditnetworks. A merchant will ask for "credit or debit?"if the card is a combined credit+debit card. If thepayee chooses "credit", the credit balance will bedebited the amount of the purchase; if the payee

chooses "debit", the bank account balance will bedebited the amount of the purchase.The "debit" networks usually require that a personalidentification number be supplied. The "credit" networks typically require that purchases be madein person and often allow cards to be charged with only a signature, and/or picture ID. However,most merchant agreements in the United States forbid picture ID as a requirement to use a CreditCard.

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CRDEIT CARDS

HISTORY OF CREDIT CARD:

CREDIT CARD:Acredit card is part of a system of payments named after the small plastic card issued to users ofthe system. It is a card entitling its holder to buy goods and services based on the holder's promiseto pay for these goods and services. The issuer of the card grants a line of credit to the consumer

(or the user) from which the user can borrow money for payment to a merchant or as a cashadvance to the user.A credit card is different from a charge card, where a charge card requires the balance to be paid infull each month. In contrast, credit cards allow the consumers to 'revolve' their balance, at the costof having interest charged. Most credit cards are issued by local banks or credit unions, and are theshape and size specified by the ISO/IEC 7810 standard as ID-1.

HOW CREDIT CARDSWORK?Credit cards are issued after an account has been approved by the credit provider, after whichcardholders can use it to make purchases at merchants accepting that card.When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder

indicates consent to pay by signing a receipt with a record of the card details and indicating theamount to be paid or by entering a personal identification number (PIN). Also, many merchantsnow accept verbal authorizations via telephone and electronic authorization using the Internet,known as a 'Card/Cardholder Not Present' (CNP) transaction.Electronic verification systems allow merchants to verify that the card is valid and the credit cardcustomer has sufficient credit to cover the purchase in a few seconds, allowing the verification tohappen at time of purchase. The verification is performed using a credit card payment terminal orPoint of Sale (POS) system with a communications link to the merchant's acquiring bank. Datafrom the card is obtained from a magnetic stripe or chip on the card; the latter system is in theUnited Kingdom and Ireland commonly known as Chip and PIN, but is more technically an EMVcard.

Other variations of verification systems are used by eCommerce merchants to determine if theuser's account is valid and able to accept the charge. These will typically involve the cardholderproviding additional information, such as the security code printed on the back of the card, or theaddress of the cardholder.Each month, the credit card user is sent a statement indicating the purchases undertaken with thecard, any outstanding fees, and the total amount owed. After receiving the statement, thecardholder may dispute any charges that he or she thinks are incorrect (see Fair Credit Billing Actfor details of the US regulations). Otherwise, the cardholder must pay a defined minimum

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proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amountowed. The credit issuer charges interest on the amount owed if the balance is not paid in full(typically at a much higher rate than most other forms of debt). Some financial institutions canarrange for automatic payments to be deducted from the user's bank accounts, thus avoiding latepayment altogether as long as the cardholder has sufficient funds.

INTEREST CHARGES:

Credit card issuers usually waive interest charges if the balance is paid in full each month, buttypically will charge full interest on the entire outstanding balance from the date of each purchaseif the total balance is not paid.For example, if a user had a $1,000 transaction and repaid it in full within this grace period, therewould be no interest charged. If, however, even $1.00 of the total amount remained unpaid,interest would be charged on the $1,000 from the date of purchase until the payment is received.The precise manner in which interest is charged is usually detailed in a cardholder agreementwhich may be summarized on the back of the monthly statement.The credit card may simply serve as a form of revolving credit, or it may become a complicated

financial instrument with multiple balance segments each at a different interest rate, possibly witha single umbrella credit limit, or with separate credit limits applicable to the various balancesegments. Usually this compartmentalization is the result of special incentive offers from theissuing bank, to encourage balance transfers from cards of other issuers. In the event that severalinterest rates apply to various balance segments, payment allocation is generally at the discretionof the issuing bank, and payments will therefore usually be allocated towards the lowest ratebalances until paid in full before any money is paid towards higher rate balances. Interest rates canvary considerably from card to card, and the interest rate on a particular card may jumpdramatically if the card user is late with a payment on that card or any other credit instrument, oreven if the issuing bank decides to raise its revenue.

BENEFITS TO CUSTOMERS:The main benefit to each customer is convenience. Compared to debit cards and checks, a creditcard allows small short-term loans to be quickly made to a customer who need not calculate abalance remaining before every transaction, provided the total charges do not exceed the maximumcredit line forthe card.

DETRIMENTS TO CUSTOMERS:

Credit cards with low introductory rates are limited to a fixed term, usually between 6 and 12months after which a higher rate is charged. As all credit cards assess fees and interest, somecustomers become so encumbered with their credit debt service that they are driven to bankruptcy.Credit cards will often stipulate a default rate of 20 to 30 percent in the event a payment is missed.

That is, if a consumer misses a payment, the rate will automatically increase to a very burdensomelevel. This can lead to a snowball effect in which the consumer is drowned by unexpectedly highinterest rates. Further most card holder agreements enable the issuer to arbitrarily raise the interestrate for any reason they see fit.

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GRACE PERIOD:

A credit card's grace period is the time the customer has to pay the balance before interest ischarged to the balance. Grace periods vary, but usually range from 20 to 40 days depending on thetype of credit card and the issuing bank. Some policies allow for reinstatement after certainconditions are met.

Usually, if a customer is late paying the balance, finance charges will be calculated and the graceperiod does not apply. Finance charges incurred depend on the grace period and balance; withmost credit cards there is no grace period if there is any outstanding balance from the previousbilling cycle or statement (i.e. interest is applied on both the previous balance and newtransactions). However, there are some credit cards that will only apply finance charge on theprevious or old balance, excluding new transactions.

BENEFITS TO MERCHANTS:An example of street markets accepting credit cards. Most simply display the logos (shown in theupper-left corner of the sign) of all the cards they accept.For merchants, a credit card transaction is often more secure than other forms of payment, such as

checks, because the issuing bank commits to pay the merchant the moment the transaction isauthorized, regardless of whether the consumer defaults on the credit card payment (except forlegitimate disputes, which are discussed below, and can result in charges back to the merchant). Inmost cases, cards are even more secure than cash, because they discourage theft by the merchant'semployees and reduce the amount of cash on the premises. Prior to credit cards, each merchant hadto evaluate each customer's credit history before extending credit. That task is now performed bythe banks which assume the credit risk. Credit cards can also aid in securing a sale, especially ifthe customer does not have enough cash on his or her person or checking account.For each purchase, the bank charges the merchant a commission (discount fee) for this service andthere may be a certain delay before the agreed payment is received by the merchant. Thecommission is often a percentage of the transaction amount, plus a fixed fee. In addition, a

merchant may be penalized or have their ability to receive payment using that credit card restrictedif there are too many cancellations or reversals of charges as a result of disputes. Some smallmerchants require credit purchases to have a minimum amount (usually between $5 and $10) tocompensate for the transaction costs, though this is strictly prohibited by credit card companies andcredit card companies attempt to get consumers to report such merchants.In some countries, for example the Nordic countries, banks guarantee payment on stolen cardsonly if an ID card is checked and the ID card number/civic registration number is written down onthe receipt together with the signature. In these countries merchants therefore usually ask for ID.Non-Nordic citizens, who are unlikely to possess a Nordic ID card or driving license, will insteadhave to show their passport, and the passport number will be written down on the receipt,sometimes together with other information. Some shops use the card's PIN for identification, and

in that case showing an ID card is not necessary.

COSTS TO MERCHANTS:

Merchants are charged many fees for the privilege of accepting credit cards. The merchant may becharged a discount rate of 1%-3%+ of each transaction obtained through a credit card. Usually, themerchant will also pay a flat per-item charge of $0.05 - $0.50 for each transaction. Thus in someinstances of very low value transactions, use of credit cards may actually cause the merchant to

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lose money on the transaction. Merchants choose to pay these costs in exchange for the increasedprofitable sales they can create. Thus, they are considering part of the overall cost of marketing.Merchants with very low average transaction prices or very high average transaction prices aremore averse to accepting credit cards. But rates are often reduced in an attempt to include more ofthese types of merchant.

PARTIES INVOLVED

y CARD HOLDERThe holder of the card used to make a purchase; the consumer.

y CARD ISSUING BANK:The financial institution or other organization that issued the credit card to the cardholder. Thisbank bills the consumer for repayment and bears the risk that the card is used fraudulently.

American Express and Discover were previously the only card-issuing banks for theirrespective brands, but as of 2007, this is no longer the case. Cards issued by banks to

cardholders in a different country are known as offshore credit cards.

y MERCHANT:The individual or business accepting credit card payments for products or services sold to thecardholder.

y ACQUIRING BANK:The financial institution accepting payment for the products or services on behalf of themerchant.

y INDEPENDENT SALES ORGANIZATION:Resellers (to merchants) of the services of the acquiring bank.

y MERCHANT ACCOUNT:This could refer to the acquiring bank or the independent sales organization, but in general isthe organization that the merchant deals with.

y CREDIT CARD ASSOCIATION:An association of card-issuing banks such as Visa, MasterCard, Discover, American Express,etc. that set transaction terms for merchants, card-issuing banks, and acquiring banks.

y TRANSACTION NETWORKThe system that implements the mechanics of the electronic transactions. May be operated byan independent company, and one company may operate multiple networks.

y AFFINITY PARTNER:Some institutions lend their names to an issuer to attract customers that have a strong relationship

with that institution, and get paid a fee or a percentage of the balance for each card issued using

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their name. Examples of typical affinity partners are sports teams, universities, charities,professional organizations, and major retailers.The flow of information and money between these parties always through the card associations is known as the interchange, and it consists of a few steps.

TRANSACTION STEPSy AUTHORIZATION:The cardholder pays for the purchase and the merchant submits the transaction to the acquirer(acquiring bank). The acquirer verifies the credit card number, the transaction type and theamount with the issuer (Card-issuing bank) and reserves that amount of the cardholder's creditlimit for the merchant. An authorization will generate an approval code, which the merchantstores with the transaction.

y BATCHING:Authorized transactions are stored in "batches", which are sent to the acquirer. Batches aretypically submitted once per day at the end of the business day. If a transaction is not submitted

in the batch, the authorization will stay valid for a period determined by the issuer, after whichthe held amount will be returned back to the cardholder's available credit (see authorizationhold). Some transactions may be submitted in the batch without prior authorizations; these areeither transactions falling under the merchant's floor limit or ones where the authorization wasunsuccessful but the merchant still attempts to force the transaction through. (Such may be thecase when the cardholder is not present but owes the merchant additional money, such asextending a hotel stay or car rental.)

y CLEARING AND SETTLEMENT:The acquirer sends the batch transactions through the credit card association, which debits theissuers for payment and credits the acquirer. Essentially, the issuer pays the acquirer for the

transaction.

y FUNDING:Once the acquirer has been paid, the acquirer pays the merchant. The merchant receives theamount totaling the funds in the batch minus the "discount rate," which is the fee the merchantpays the acquirer for processing the transactions.

y CHARGEBACK:A chargeback is an event in which money in a merchant account is held due to a disputerelating to the transaction. Charge backs are typically initiated by the cardholder. In the eventof a chargeback, the issuer returns the transaction to the acquirer for resolution. The acquirerthen forwards the chargeback to the merchant, who must either accept the chargeback orcontest it.

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TYPES OF CREDIT CARDS:

y Secured credit cardsy Prepaid "credit" cards

SECURED CREDIT CARDS:A secured credit card is a type of credit card secured by a deposit account owned by thecardholder. Typically, the cardholder must deposit between 100% and 200% of the total amount ofcredit desired. Thus if the cardholder puts down $1000, they will be given credit in the range of$500$1000. In some cases, credit card issuers will offer incentives even on their secured cardportfolios. In these cases, the deposit required may be significantly less than the required creditlimit, and can be as low as 10% of the desired credit limit. This deposit is held in a special savingsaccount. Credit card issuers offer this because they have noticed that delinquencies were notablyreduced when the customer perceives something to lose if the balance is not repaid.The cardholder of a secured credit card is still expected to make regular payments, as with aregular credit card, but should they default on a payment, the card issuer has the option of

recovering the cost of the purchases paid to the merchants out of the deposit. The advantage of thesecured card for an individual with negative or no credit history is that most companies reportregularly to the major credit bureaus. This allows for building of positive credit history.

PREPAID "CREDIT" CARDS:Aprepaid credit card is not a credit card, since no credit is offered by the card issuer: the card-holder spends money which has been "stored" via a prior deposit by the card-holder or someoneelse, such as a parent or employer. However, it carries a credit-card brand (Visa, MasterCard,American Express or Discover) and can be used in similar ways just as though it were a regularcredit card.After purchasing the card, the cardholder loads the account with any amount of money, up to the

predetermined card limit and then uses the card to make purchases the same way as a typical creditcard. Prepaid cards can be issued to minors (above 13) since there is no credit line involved. Themain advantage over secured credit cards (see above section) is that you are not required to comeup with $500 or more to open an account. [11] With prepaid credit cards you are not charged anyinterest but you are often charged a purchasing fee plus monthly fees after an arbitrary time period.Many other fees also usually apply to a prepaid card.Prepaid credit cards are sometimes marketed to teenagers for shopping online without having theirparents complete the transaction.Because of the many fees that apply to obtaining and using credit-card-branded prepaid cards, theFinancial ConsumerAgency of Canada describes them as "an expensive way to spend your ownmoney". The agency publishes a booklet, "Pre-paid cards", which explains the advantages and

disadvantages of this type of prepaid card.

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GLOBAL PLAYERS IN CREDIT CARDS

MASTER CARD:Master card is the product of Master card International and along with visa is distributed byfinancial institutions around the world. Card Holder borrow money against a line of credit and payit back with interest if balance is carried over for one month .Today 23000 financial institutions in220 countries issues its product. In 1998there were almost 100 mill cards in circulation whoseusers spend $650 billion in more than 16.2 mill localities.

AMERICAN EXPRESS:The world's favourite card is American express credit card. More than 7 million cards are in

circulation and growing and it is growing further. Around US$ 123 was spent last year through

American express cards and it is poised to world's no. 1 card in near future. In a regressive USeconomy the total amount spent last year rose by 4%. American express cards are very popular inA

merica, Canada, andA

sia and are used widely in retail and every day segment.

DINER CLUB INTERNATIONAL:Diner club is worlds number one charge card Company .Its card holder resides all over the

world and is all the time favorite for the corporate.There are more than 8 mill Diner club card holders. They are affluent and are frequent travelers inpremier business including fortune 500 companies leading global corporation

VISA Card:VISA card is a product of VISA USA and along with Master card is distributed by

financial institution around the world. A VISA card Cardholder borrows money against a credit

line and repay the money with interest if the balance is carried over from month to month in arevolving line of credit. Nearly 600 m. cards carry one of the VISA brand and more than 14 m.locations accept VISA card.

JCB Card:JCB card has a merchant net work of 10.93 m. in approximately 189 countries. It is

supported by over 320 financial institutions worldwide. The JCB philosophy of identify thecustomer need and please the customer with service from the heart and paying rich dividend astheir customer spend $ 43 billion annual on JCB cards.

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SCENARIO OF PLASTIC MONEY IN PAKISTANPlastic Money business is definitely going big time here in Pakistan. In a country where two yearsback people have hardly heard the word plastic money or credit card, more than 7000 merchantsare accepting above 140,000 cards.It has been estimated that there are likely to be around half million potential card users in the near

future. This forecasting derives credibility from the fact that more and more local and internationalfinancial institutions are exhibiting enthusiasm in this direction. This in turn reflects prospects inPakistan market in accommodating numerous credit card competitors operating on the circuit,ensuring healthy and competitive card business deals.

MARKET SCENARIO:Although credit card was introduced in Pakistan decades ago when Habib Bank, the largest bank inPakistan, launched its gold card, but people had hardly know about this card because of its verylimited issuance. Approximately four years back, Allied Bank of Pakistan had launched its MasterCard. Two years back Citibank had launched its VISA Card and that was the turning point in thehistory of Plastic Money in Pakistan.

Citibank had done a tremendous job to educate people of Pakistan, as well as, financial industryabout credit cards and its significance in today's world. Because of very aggressive marketing andheavy investment in technology, Citibank is well deserved to be called the industry leader ofPakistan's credit card business.After successful launch of Citibank card, Muslim Commercial Bank, Bank ofAmerica, andNational Bank of Pakistan had launched their credit cards. Very soon we are expecting more localand international banks on the horizon of Pakistan's credit card business.

*In alphabetical order

y Citibank is the industry leader in credit card business here. In short span of time, Citibankhad issued over 125,000 VISA cards and covers most of the potential market segment.

y Muslim Commercial Bank had launched its Master Card and it is expected that by the endof 1997, MCB card users will be over 250,000 (that makes 5% of its total account holders).

y Diners Club and AMEX are very selective in credit cards business and so far entertains avery limited market segment.

y Bank ofAmerica is the transaction processing hub for most of the local banks, includingMuslim Commercial Bank, Allied Bank and National Bank of Pakistan.

Some departmental stores have also issued their own branded cards; however, these stores areoperating in a very restrictive domain.

TECHNOLOGY AND INFRASTRUCTURE

One of the most important features that Plastic Money offers is the technology associated with thisbusiness. Credit card business relies on very reliable and secure technology and demands verystrong connectivity backbone. Although a third world country, with lot of insecurities and almostno infrastructure, Pakistan has no exception when it comes to credit card business. There are

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approximately 3000 Point Of Sale Terminals (POST) present on merchant's sites connected withbank host system. Inter-city connectivity are accomplish through X.25 networks.Perhaps, it is the most important time in the history of Pakistan as the parameters of itsinfrastructure are coming into existence. There is an immense need of reliable wide areaconnectivity and this market is so huge and lucrative that it can accommodate many more industry

giants. Soon theA

utomatic Teller Machines (A

TMs) will be seen every where in Pakistan and itwill require a very reliable and secure wide area connectivity setup.

GOVERNMENT RULES AND REGULATIONS REGARDING CREDIT

CARDSThe SBP has issued prudential regulations and operational guide lines ForCr cards Business Lets Discuss them One by one.

PRUDENTIAL REGULATIONS

REGULATION O-1The banks / DFIs should take reasonable steps to satisfy themselves that cardholders havereceived the cards, whether personally or by mail. The banks / DFIs should advise the card holders of the need to takereasonable steps to keep the card safe and the PIN secret so that frauds are avoided

REGULATION O-2Banks / DFIs shall provide to the credit card holders, the statement of account at monthly intervals, unless there has

been no transaction or no outstanding balance on the account since last statement.

REGULATION O-3Banks / DFIs shall be liable for all transactions not authorized by the credit card holders after they have been properlyserved with a notice that the card has been lost / stolen. However, the banks / DFIs liability shall be limited to those

amounts wrongly charged to the credit card holders account. In order to mitigate the risks in this respect, the banks /DFIs are encouraged to take insurance cover against wrongly charged amounts, frauds, etc.The bank/DFI shall, however, not charge the borrowers account with any amount under the head of insurance

premium (by what so ever name called) without obtaining consent of each existing & prospective customer inwriting. In addition to obtaining consent in writing, the banks/DFIs may also use the following modes for obtaining

prior consent of their customers provided proper record is maintained by banks/DFIs:-i) Customers consent on recorded lines via out bound/in bound call center (after due verification)ii) ATM screens screen pop up before conducting transaction and after inputting pin codeiii) Signed consent acquired with credit card application or as separate formiv) IVR (Integrated Voice Recording)

REGULATION O-4In case the cardholders make partial payment, the banks / DFIs should take into account the partial payment before

charging service fee / mark-up amount on the outstanding / billed amount so that the possibility of charging excessamount of mark-up could be avoided.

REGULATION O-5Due date for payment must be specifically mentioned on the accounts statement. If fine / penaltyis agreed to be charged in case the payment is not made by the due date, it should be clearly mentioned in theagreement.

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REGULATION R-7

MAXIMUM CARD LIMITMaximum unsecured limit under credit card to a borrower (supplementary cards shall be considered part of the

principal borrower) shall generally not exceed Rs 500,000/.Banks / DFIs may, however, assign a clean limit beyond Rs 500,000 but not in excess of Rs 2 million to their primecustomers who have extraordinary strong repayment capacity, moderate debt burden and a clean track record. But the

aggregate limits in this respect should not exceed 10% of the total credit card portfolio at any point in time. However,while availing benefit of this provision, banks / DFIs would place on record well defined criteria for terms "PrimeCustomers" and "Moderate Debt Burden" approved by theirBoard of Directors / Chief Executive.Banks / DFIs may also allow financing under the credit card scheme in excess of Rs 500,000/-(up to Rs 2 million) to other customers as well, provided the excess amount is appropriately secured according to thedefinition given in Part A of these regulations.The loan secured against liquid securities shall, however, be exempted from the above limit.The loans against the securities issued by Central Directorate of National Savings (CDNS) shall be subject to suchlimits as are prescribed by CDNS / Federal Government / State Bank of Pakistan from time to time. For Charge Cards,

pre-set spending limits generated by the standardized systems, as is the global practice, shall be allowed.

REGULATION R-8

CLASSIFICATION AND PROVISIONINGThe credit card advances shall be classified and provided for in the following manner

CLASSIFICATION DETERMINANT TREATMENT OFINCOME

PROVISION TO

BE MADE1) 2) 3) 4)

Loss Where markup/ interest or

principal isoverdue by180 days ormore from thedue date

Unrealized markup/ interest to be

put in SuspenseAccount and not to

be credited toIncome Accountexcept whenrealized in cash

Provision of 100% ofthe differenceresulting from theoutstanding balance of

principal less theamount of liquidsecurities with the

bank / DFI

It is clarified that the lenders are allowed to follow more conservative policies. Further, provisioning may becreated and maintained by the bank / DFI on a portfolio basis provided that the provision maintained by the bank / DFIshall not be less than the level required under thisRegulation

SBP issues operational guidelines for credit card business

The State Bank of Pakistan today issued comprehensive operational guidelines for creditcard business of commercial banks/DFIs, outlining code of conduct for various aspects ofcredit card operations including their marketing, interest rate charges, recovery of dues,billing processes etc.

According to the guidelines, banks/DFIs are advised to quote interest rate and servicecharges on annual basis. Although, they are free to set the aforesaid rates, banks/DFIs arerequired to set well defined service level for each of the product/service; whether chargedor free. Banks/DFIs should also inform the credit card holder on the interest rate or servicescharges through advertisement and/or sending information to card holders on theiraddresses.

Banks/DFIs should not levy any charge that was not explicitly mentioned either in the UserGuide orApplication Form or Schedule of Charges provided to the customer at the time of

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selling credit card, without the prior consent of the card holder. However, this would not beapplicable to excise duty or other charges which may be levied by the Provincial or FederalGovernment or any other statutory authority from time to time. Banks/DFIs should,however, timely update the customers on the imposition of such levies. Banks are alsoadvised that interest amount should be charged on net credit i.e. after deducting the amount

paid by the card holder. The outstanding amount due to rounding-off of paisas, should notbe considered as partial payment and interest amount should not be charged on it. According to the guidelines, banks/DFIs must ensure that their recovery/collection officers

should not resort to any verbal or physical harassment of the delinquent credit card holder,their family members, referees and friends during recovery/collection efforts.Recovery/collection officers should also not humiliate publicly or in private or intrude theprivacy of the credit card holders family members, referees and friends. Telephone callsand visits to credit card holders for recovery of unpaid dues should be restricted to aconvenient time and the same may be defined in the

Bank/DFIs public policy and should be properly communicated to customers at the time ofissuance of credit card. In addition, recovery should only be made from principal card

holder and in no case supplementary card holders shall be resorted to any sort of pressureto pay the unpaid amount. However, supplementary card holders may be contacted only to enquire about the

whereabouts of the principal card holder. Moreover, banks/DFIs should not start recovery

process for reported disputed transactions until the investigation carried out by card-issuingBank/DFI/Banking Ombudsman/State Bank of Pakistan is completed. In case of wrong/inappropriate basis of rejection of customer claim, bank/DFI would be liable for penalty.

With regard to marketing of credit cards, banks/DFIs should discourage aggressive andhard selling & marketing practices during working/office hours; except with priorappointment of the prospective customer. In case a customer is called during office hoursfor seeking appointment, he/she should be first asked for the option to continue with the

call or not. Banks/DFIs should seek prior consent of their customers/account holders for informingthem on new products and services on telephone as and when introduced. In this regard,banks should maintain a Dont call list comprising the contact details of those customerswho do not want to be contacted. The list should be accessible to all marketing staff andthey should be advised not to contact such customers /account holders for introducing oroffering new banking products. In this connection, banks should update the database ofexisting customers within three months from the date of issue of these guidelines.Banks/DFIs should follow the Code of Conduct for marketing of credit cards which will beissued by Pakistan Banks Association (PBA) in consultation with SBP.

Guidelines stipulate that credit card may only be issued by the banks/DFIs, pursuant to awritten application duly filled and signed by the prospective customer.

H

owever, in orderto reward and retain high-end existing customers, pre-embossed cards may be issued after aproper acceptance by the customer, which may be in the form of any verifiable mode such

as recorded phone call. Nevertheless, these pre-embossed Credit Cards should be activated

only after receiving complete application form from high-end customers and criteria forselecting high end customers must be defined in the bank policy.

Keeping in view the complex nature of credit cards, the banks/DFIS are advised to simplifythe credit card terms and conditions, and keep them clear and understandable both in

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English and Urdu languages. In order to mitigate fraudulent use of credit cards, banks/DFIsshould have built in functionality in their systems to monitor the usage of credit card.Additionally, it should also promptly identify unusual or out of pattern transactions. In thisconnection, banks/DFIs may introduce checks or limits on certain category of transactions,customers, merchants etc. Under the SBP guidelines banks/DFIs are required to dispatch

monthly Statement ofA

ccount to credit card holders at least 15 days before the due date.Towards this end, banks/DFIs may offer online, email or IVR billing facility, with

appropriate security measures. If the customer lodges complaint regarding non-receipt of

monthly Statement ofAccount, the statement should be dispatched to him/her free of cost,within two working days from the date of complaint.

Banks/DFIs are also advised that they should have an appropriate complaint resolutionstructure in place commensurate with the volume of complaints and better serviceconsideration. Credit card complaints resolution mechanism must be prominently disclosedon the official website of the Bank/DFI. The Bank/DFI may also arrange online complaintregistration on their websites. Complaint number should be provided to each complaintsubmitted to bank/DFI and same should be communicated to the Credit card holder.B

anks/DFIs must resolve the disputed transactions/complaint of the credit card holderpromptly and as per the franchise rules of VISA, MasterCard, AMEX or any otherinternational card association, taking into account nature of the transaction, distances, timezones, etc. However, in no case complaint resolution time should exceed 45 days from thedate of complaint for the transaction(s) under dispute originated within Pakistan.

In addition, interest amount should not be charged to customer during investigation period.Bank/DFI will recover interest amount accumulated during investigation period only whenthe dispute is settled in favour of bank/DFI. If decision turns in favour of the customer, thebank/DFI needs to refund the amount of disputed transactions, even to those customerswho had made the payment of disputed transaction and cancelled the card after lodgingcomplaint.

Under the guidelines, banks/DFIs are advised to develop sound risk evaluation proceduresfor enlisting /registration of merchants keeping in view the franchise rules of theirrespective franchiser.

The enlistment/registration process may inter-alia include proper identification, verificationand good credit history, clean track record in Visas National Merchant Alert Service and /or Master Cards MemberAlert to ControlHigh Risk Merchants etc. Banks/DFIs providingacquiring services need to educate their merchants about the use of Point of Sale (POS)Machine, genuineness of credit cards, signature verification, their rights and responsibilitiesunder the agreement.

Acquirer banks/DFIs are required to facilitate merchants by providing prompt paymentsand timely maintenance/service of POS machines. AcquirerBanks/DFIs should maintain

track record of merchants performance and categorize them, based on risks, involvementin frauds & disputed transactions etc. and develop a data base or negative list of merchantsinvolved in fraudulent activities. The merchants involved in credit card related fraudsshould be delisted and their particulars should be shared with other banks/DFIs throughPBA.

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BANK ALFALH

DEBIT CARD

In our endeavor toprovide you versatilebanking options to fulfillyour financial needs,B

ankA

lfalah Limitedpresents the AlfalahHilalCard, a Debit Card which gives you unlimited access to your current / savings account with asimple swipe at millions of retail shops and ATMs worldwide. The Alfalah HilalCard comes witha host of conveniences and benefits combined with the wide reach of Visa Network, enabling it tobe accepted at more than 1.2 million ATMs and 29 million retail outlets around the world, makingit the most acceptable Debit Card available in Pakistan.

What's more, it is easy to operate and can be used on any electronic self-printing POS machinewhere VISA is accepted, locally and internationally. No more hassle of remembering your PIN forretail transactions and no need to go to the ATM for cash withdrawal! one swipe and your

transaction is complete.

BANK ALFALAH

CREDIT CARD

VISA CARD

PLATINUM

GOLD&SILVER

SUPPLEMENTARY

MASTER CARD

TITANIUM

DEBIT CARD

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CREDIT CARD

YourBankAlfalah Credit Cards is your partner everywhere and is globally accepted andwelcomed at locations displaying the VISA logo. It is accepted at nearly 29 million locations inmore than 150 countries around the globe and over 27,000 BankAlfalahs establishments in

Pakistan. The credit cards offered by BankAlfalah are as follows:

VISA CARDS

PLATINUM CARD

It is accepted at nearly 29 million locations in more than 150 countries aroundthe globe and at over 27,000 establishments in Pakistan.

GOLD & SILVER CARD

A perfect card combination for all segments of salaried & professionalindividuals

SUPPLEMENTARY CARD

Now you can give Supplementary Cards to anyone you care for. Gift your familymembers with exclusive Alfalah VISA supplementary cards and let them also enjoy the privilegesof Alfalah VISA. Only Alfalah VISA gives you the unique feature of having up to six freesupplementary cards for anyone you care for. All supplementary Card members share your creditlimit. All charges incurred on the supplementary cards will be reported on your monthly statement

FEATURESThe features of all the VISA credit cards are the same.

y No Joining FeeJoin

A

lfalah VISA

without paying any joining fee. Start enjoying your free card from the momentyou get hold of it.

y No Annual / Renewal FeeAlfalah VISA is the only credit card in Pakistan with no annual or renewal fee, so benefit fromyour card without worrying about any renewal fee.

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y Balance Transfer FacilityAs an Alfalah VISA Card member you can avail balance transfer facility at a low rate of only 2%(24% APR) per month (for initial six months), which is the lowest in Pakistan. The balancetransfer facility can only be availed if the total outstanding balance does not exceed beyond thecredit limit assigned by BankAlfalah forAlfalah VISA card.

y Global AcceptabilityYourBankAlfalah VISA card is your partner everywhere and is globally accepted and welcomedat locations displaying the VISA logo. It is accepted at nearly 29 million locations in more than150 countries around the globe and at over 27,000 establishments in Pakistan.

y Revolving CreditWith Alfalah VISA you have the option of paying only 5% of your outstanding balance by thepayment due date. Service charges will be levied on the balance unpaid spending and carriedforward. These charges are calculated on a daily basis from the transaction date for all cash andretail transactions. The following month you have the option of either the full amount payment or

if you wish, pay only the minimum amount due and revolve again.

y Card Expiry PeriodEffective 7 June 2005, all VISA credit cards being issued by our Card Division will have an expiryof 3 years on them.

y Zero Loss LiabilityIf you ever lose your card, BankAlfalah ensures that you never have to worry about it. You arecovered for all fraudulent charges made on your card as soon as it has been reported lost to us. Just

make sure that you report the lost card immediately upon discovery. You are completely secureagainst loss/theft after the card loss has been reported to us.

y All Billing in Pak RupeesWhether you make transactions in Dollars or any other currency, for your convenience, all yourbilling will be in PAK Rupees.

y Statement of AccountFor your convenience we give you a single glance, easy to manage monthly statement whichcontains the following:

1. Card Account Number.2. Statement Date.3. Page Count.4. Transaction Description Indicating: The date of transactions made, Transaction

reference, Name of merchant establishment, Amount charged and Currency type (If thetransaction is made in any currency other than Pak Rupees).

5. Credit Limit indicating: The total credit limit assigned to you for all your card accounts(principal and supplementary).

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6. Payment Due Date: Indicating the date by which your payment should reach BankAlfalahto avoid any late payment charges.

7. Current Balance: Indicating the total outstanding amount on your card account on thestatement date.

8. Payment coupon: To be used for making payments.y Transactions that can be Transferred to SBS

o Retail Transactions (Domestic & International)o Cash Transactions (Domestic & International)o Balance Transfer Transactions

How Can I Apply?

It is a simple three-step process:1. Fill in the SBS application form available at any of the Alfalah Branch or Cards Center

(required only at the time of first transaction, when you apply for SBS plan.)2. Call at 111-225-786 and book the transaction under SBS.3.

For normal S

BS choose from 3, 6, 9, 12, 18, 24, 30, 36 months affordable payment plans.And forBTF to SBS choose from 6, 9, 12, 18, 24, 30, 36 months plans.

SPECIAL FEATURES

Cash Advance Facility 50% of Credit LimitNow you can avail Cash Advance Facility up to 50% of your available credit limit. Enjoy thebenefits of this exclusive offer on yourBankAlfalah Credit Cards. You can get cash from AlfalahATMs or cash counters ofBankAlfalah branches and other VISA member banks in Pakistan.

24-Hours Phone Banking ServiceOur well-trained and qualified phone banking team Is available to help you 24 hours a day. Justdial 111-225-111 for:

1. Activating your card2. Answering your queries3. Registering and resolving your complaints4. Reporting a lost/stolen card

Comprehensive Travel ProtectionAlfalah VISA offers a comprehensive cover up to Rs. 3.5 Million on Alfalah VISAGold Card incase of an accident, while traveling on any common carrier. It is applicable only if the tickets arecharged through Alfalah VISA card. The details are given as follows:

Limits of Indemnity: Rs. 3.5 million = ForGold Card HoldersRs. 1.75 = For Classic, Classic Blue and Women Exclusive Cards

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Coverage:: Personal accidents travel insurance for card holders during travelonly, if ticket is bought using the card, as per benefits listed below.

Death: 100%

Special Exclusion: This policy will not cover any claim due to death or permanent

injury unless the same is caused due to any accident of thecarrying vessel/vehicle.

Geographical Limit: World Wide

Permanent DisablementPermanent total loss of both eyes or two limbs: 100%Permanent total loss of one eye and one limb: 75%Permanent total loss of one eye or one limb: 50%Permanent total loss of one finger or thumb or toe: 10%

FortunesFor every Rs. 50 you spend on yourAlfalah VISA card, you will earn one fortune point. Youraccumulated fortune points can be exchanged for a whole range of items displayed in our FortunesCatalogue.. It offers a wide range of lifestyle categories always catering to you and your family'staste. Once you have accumulated enough points to redeem the gift of your choice, fill out a simpleform available at all BankAlfalah branches or call our 24 hour phone banking service and orderthe item of your choice. The fortune items will be delivered at your doorstep.

Acceptance at 1LINK ATMsAvail Cash Advance up to 50% of your credit limit at over 2200 1LinkATMs in Pakistan inaddition to over 1.2 million ATMs worldwide.

Instant SBS Monthly Installment PlanBankAlfalah cardholders can convert any transaction of Rs. 3,000 or above into easy installmentsof 3,6,12,18,24,30 and 36 months tenures at the time of transaction.

Utility bill PaymentsNow Utility bill payments* can be made through Alfalah VISA credit cards either by calling CallCentre or through Direct Debit instructions. *Available on FESCO, LESCO, SSGC, SNGPL,IESCO, HESCO, GEPCO, KESCO, PTCL & WARID. Other companies will be added soon.

Call and Pay Facility

Cardholders now have the convenience of using their cards to make payments even on locationswhere credit cards are not accepted by calling our 24 hours Call Center and getting pay ordersissued to any third party through debit to Alfalah Visa Credit Card.

Prepaid Mobiles Top upsAlfalah cardholders are also being provided the facility to get their prepaid mobile connections ofany company topped up by just one call to 24 hours Call Center. Alfalah credit cardholders canalso use their reward points to get the prepaid mobile top ups.

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Alfalah Credit on PhoneAlfalah cardholders can call the Call Center and get credit up to 75% of their available credit limitassigned by BankAlfalah or available credit limit whichever is lower at just 2.0% per month (24%

APR). Payment of credit amount can be made to them through a cheque at the doorstep or directlyinto the account in BankAlfalah.

Credit Card Bill Payment through Alfalah Hilal CardNow BankAlfalah account holders can make their credit card bill payments through AlfalahHilalCard by using it on ATMs.

Step By Step (SBS) PlanNow you can convert any transaction amount of Rs. 3,000/- and above, to a Step-By-Step paymentplan. It gives you the flexibility to convert your large payments into small equal monthlyinstallments.

MASTER CARDS

TITANIUMTitanium MasterCard is your partner everywhere and is globally accepted and welcomed at

locations displaying the MasterCard logo

YOUR PARTNERWHEREVER YOU GOYourBankAlfalah Titanium MasterCard is your partner everywhere and is globally accepted andwelcomed at locations displaying the MasterCard logo. It is accepted at nearly 29 million locationsaround the globe and at over 27,000 BankAlfalahs merchant establishments in Pakistan. You canwithdraw any amount upto 50% of your assigned credit limit.

FEATURES

MONTHLY CARD STATEMENTTo keep a check on the transactions you have made on yourAlfalah Titanium MasterCard, youwill receive a monthly statement indicating the following:

i) Purchasesii) Cash withdrawalsiii) Service Charges

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iv) Applicable fee (if any)v) Fortune Reward Points

Foreign TransactionsTransactions made outside Pakistan will be converted from the transaction currency to US Dollars,

based on international exchange rate prevailing on that date (Currency Conversion rate is a rateselected by MasterCard Worldwide from the range of rates available in wholesale currencymarkets for the applicable processing date, which may vary from the rate MasterCard Worldwideitself receives, or the government-mandated rate in effect for the applicable processing date in eachinstance, plus or minus any adjustment determined by the issuer). In order to assist card members,all transactions will be converted to Pak Rupees for payment. This conversion will be based on themarket exchange rate quoted by authorized money changers and in accordance with the BanksProcedures applicable from time to time.

SPECIAL OFFER FOR ALFALAH TITANIUM CARDHOLDERSRelax and escape the stress of the airport

Priority Pass The worlds largest independent airport VIP lounge programAccess to over 500 airport VIP lounges in 90 countries and over 275 cities so you can treatyourself like a VIP no matter where you travel, or which airline and class you fly.

CONVENIENCE AND RELIABILITY

Auto DebitThis facility is specially designed for our account holders. It gives you the option of making yourminimum or full payments due as specified in yourAlfalah VISA monthly statement through yourBankAlfalah Account. If you are not a BankAlfalah Account holder and wish to avail this facility,kindly contact your nearest BankAlfalah branch.

BALANCE TRANSFER FACILITYOffering an easy and convenient way to settle payments on all your existing credit cards inPakistan @ 2% per month (24% APR).This rate can be reduced to an incomparable rate of 0.99%per month (upto 21.44% APR) if the Balance transfer transaction amount is converted to Step-By-Step (SBS) Monthly Installment Plan within TEN days of the transaction.

Payments

PlanNormal SBS BTF conversion to SBS

Factor @

1.75% p.m

APR Monthly

Installment(Rs.)

Factor @

0.99% p.m

APR Monthly

Installment(Rs.)

03 months 0.35083 31.23% 2,104.98 N/A 17.73% N/A

06 months 0.18417 35.15% 1,105.02 0.1766 20.09% 1,059.60

09 months 0.12861 36.36% 771.66 0.121 20.90% 726

12 months 0.10083 36.74% 604.98 0.0932 21.25% 559.2

18 months 0.07306 36.68% 438.36 0.0655 21.44% 393

24 months 0.05917 36.22% 355.02 0.0516 21.37% 309.6

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30 months 0.05083 35.66% 304.98 0.0432 21.21% 259.2

36 months 0.04528 35.07% 271.68 0.0377 21.01% 226.2

CREDIT COVER

Low Rates - High Protection Protection against Uncertainties While You Recover - We will cover Convenient and Hassle Free

BUY YOUR DREAMS ONLINE!Alfalah Titanium MasterCard can be used on the Internet

CASHWITHDRAWALS AT ATMs & CASH COUNTERSNow, yourAlfalah MasterCard gives you easy access to cash 24 hours a day, 7 days a weekthrough ALFALAH ATMs!

MONTHLY CARD STATEMENTEach month upon receiving your monthly statement make sure to check the following: Card Account Number: Your Card Account Number(s) is clearly stated on your statement. Statement Date: The date on which the statement is generated. Page: This indicates the number of pages your statement consists of. Transactions Description: This indicates the date of transactions made, transaction reference,

name of merchant establishment, amount charged and currency type (if the transaction is madeon any currency other than Pak Rupees) to your Card Account.

Credit Limit: This indicates the total credit limit assigned to you for all your Cards (Primaryand Supplementary)

Payment Due Date: The date by which your payment should reach BankAlfalah to avoid anylate payment charges.

Current Balance: This figure indicates the total outstanding amount on your Card Account onthe statement date.

Payment Coupon: The upper portion of your statement carries the payment coupon to be usedfor making payments. Fill this out carefully and attach it along with the cash/cheque payment.Detailed information on charges, payment options, etc. has also been provided at the back ofyour statement for reference and convenience.

Fortunes Rewards Summary: This indicates the detail of fortune points - carry forward,earned this month, adjustments, redeemed and available points.

SPECIAL FEATURESThe special features of Master card are the same as of VISA card's.

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PREVILEGES IN PAKISTANThe Alfalah card holders have privileges in the following outlets.

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SERVICES

Credit Cover -Protection when you need it!BankAlfalah offers card members a new and powerful protection against the uncertainties of life.In the unfortunate event of prolonged illness, disability or death, its reassuring to know that with

Alfalah Credit Cover you have no cause to worry about your monthly credit card repayments.Alfalah Credit Cover has a range of features designed to protect you from the setbacks of life, atrates that are affordable.

Low Rates - High ProtectionAs an Alfalah Credit Card member (Basic card member up to the age of 65), you can protectyourself with Alfalahs Credit Cover that offers you an unbelievable low rate of 0.55% of youroutstanding amount in each monthly credit card statement as Credit Cover Premium to insure

your credit balance.

Protection against UncertaintiesIn the unfortunate event of terminal illness, permanent disability or death, your entire outstandingbalance amount on yourAlfalah Credit Card account will be waived without causing anyinconvenience to your dear ones. Additionally, all supplementary credit card balances will also bewaived. No worry-just peace of mind.

While You Recover -We will CoverIn the unfortunate event of temporary disablement due to an injury or illness for a period

exceeding 45 days, we will pay the minimum outstanding payment on yourA

lfalah Credit Card.Its just our way of ensuring that you enjoy complete peace of mind with flexibility.

Convenient and Hassle-freeBeing automatically enrolled to the benefits of Credit Cover, you do not need to complete anyforms or submit any applications for it. If you feel you do not need Credit Cover then simply callour 24-Hour Phone Banking Service on 111-225-111 to cancel.

All on the StatementAll transactions will appear under a separate heading stated as Credit Cover Premium You willbe charged 55 paisas per Rs. 100 of your statement balance.

Always There for YouCall us on 111-225-111 and we will assist you through the procedure and help you with all thenecessary requirements. Our 24-Hour Phone Banking Service will make sure that you getcomplete peace of mind with the assurance ofAlfalah Credit Cover.

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y BankAlfalah Limited / VISA& SHELL Free- Fuel Voucher Scheme"y Special introductory OfferBy PC Muzaffarabad ForBankAlfalah Cardholdersy Arena Family Recreational Sports Complexy Exclusive Dining Privilegesy Special Membership Offer for Dream world Resorty Alfalah Credit On Phoney Convert Your Current Mobile Operator to Waridy Prepaid Air Timey Call & Payy Consumer Durables on Easy Monthly Installments (SBS)y Registration for utility billsy Alfalah Cards SMS Facilityy Special Offer of Warid connectionsy Instant SBS on POSy Cash Withdrawal at 1 Link

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Standard Chartered

The Debit and Credit cards of standards Chartered can be shown in a simple hierarchy given below

Standard Chartered Debit/Credit Cards

Debit Card Credit Card

Visa Debit Card

Visa Card Master Cards America Express

Visa Cr Card Master Cr Card American Express Cr Card

PIA CoBrand Cr Card Cricket Cr Card American Express Charge Card

Saadiq Visa Card

Easy Cr Card

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Visa Debit CardConvenience of Visa Debit, using your own money

With the Standard Chartered Visa debit Card you get

the convenience of making purchases or withdrawing

cash wherever Visa is accepted.

Visa Debit Card is an ATM/Debit card that lets you shop

worry-free and cash-free. No bill payments at the end of

the month as you make purchases using your own

money. You can use your Visa Debit Card almost

anywhere in the world wherever you see the Visa symbol. Its quick and secure and you can use it

for purchases big or small.

Features at Glance

Use your own money at 27 million outlets and 160 countries worldwide wherever Visa isaccepted

Each withdrawal taken directly from your Standard Chartered Bank Account Enjoy peace of mind by not having to carry cash You can call support 24 hours a day, 7 days a week with any queries All POS transactions on your card are signature based. Simply swipe and sign! The validity period of the card is 5 years from the date of issue.

Maximum amount that can be withdraw using Visa Debit Card

Classic cardholders:ATM withdrawal of up to Rs.30, 000

POS spending of up to Rs. 100,000 or equivalent to any other currency

Platinum cardholders:

ATM Withdrawal: Up to Rs. 60,000

POS Spending: Up to Rs. 300,000 (or equivalent in other currency)

Special FeaturesExclusive benefits available on Visa Debit Card:

Shopping:Use your debit card for all your shopping, at home and abroad

Petrol:Use your debit card to pay for petrol at any filling stations

Restaurant:Use your debit card to pay for dinner at your favorite restaurants

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Cash:Use your debit card to withdraw cash at any Standard Chartered Bank ATM or any ATM

worldwide that displays the Visa symbol

E-Statement Service:With our E-Statement service, you can relax and enjoy the convenience of receiving the

summary of your debit card transactions on a monthly basis in your email inbox. Subscribefor this service, free of charge by filling out a form at your parent branch

Choose your own PIN:You can generate your ATM PIN by calling up our 24Hr Helpline 111-002-002 and

following the directions through IVR (interactive voice response). You may change your

PIN any time by visiting the nearest Standard Chartered ATM.

Lost or stolen cards:If you become aware that your debit card is lost or stolen, immediately call our 24-hour

Phone Banking at 111-002-002 / 0800-66-666 or from outside Pakistan call (9221) 111-

002-002 / 0800-66-666 to report loss / theft. You are protected from financial liability

arising from any unauthorized transaction done on your card after being reported

lost/stolen. Well cancel your old card and order a new one for you straight away.

Fees and Charges

Items Description

Card Fees

Issuance fee:

Rs.500 for Current Account

Rs.750 for Savings Account

Annual card fee:

Rs.500 for Current Account

Rs.750 for Savings Account

Cash withdrawal /

Balance Enquiry at

SCB ATMs

No charges apply

Cash withdrawal /

Balance Enquiry at

non-SCB ATMs

Rs. 15 for cash withdrawal

Rs. 5 for balance enquiry

Currency

conversion fee on

foreign

transactions

(ATM/POS)

2.5% or Rs.300 (whichever is higher)of the

transaction amount of any foreign currency

transaction made or charged to your account.

The exchange rate between the transaction

currency and the billing currency used for

processing foreign currency transactions is a

wholesale market rate selected by Visa from within

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a range of wholesale rates in effect plus the

percentage that Standard Chartered Bank charges

for the Foreign Currency Conversion Fee above.

Credit Card

Standard Chartered Credit Card can be used in Pakistan and as well as globally for any

transaction at any merchant outlet accepting MasterCard and/or VISA Credit. It provides you

following facilities

1. . Card Cash withdrawal

However Card Cash withdrawal is limited to 30% of your available credit limit.

2. Withdrawals through ATM's

For cash withdrawals through ATM's or over the counter transactions, a nominal fee will be

charged as per the Schedule of Charges.

3. Transfer your other Credit Card's outstanding balance

You also can transfer your other Credit Card's outstanding balance to your Standard

Chartered Credit Card at a nominal financial charge of 3.25 % per month (MasterCard) and3.25 % per month (VISA). When you transfer balances on to your Standard Chartered Credit

Card, you will also earn Treasure points, which you can redeem for exciting gifts from our

Treasures Catalogue.

4. Clearance of outstanding balance

You have the option of paying back the entire availed amount or paying as little as 5 %

of your outstanding balance at competitive financial charges. Your remaining outstanding

amount will be carried forward to your next monthly statement, where you will again have

the choice of paying as little as 5 % of the outstanding amount or the entire amount.

5. Service fee be charged

With Standard Chartered's VISA and MasterCard, you have the opportunity to avail

51 and 45 free credit days respectively. That means no service fee will be charged if you pay

back your entire amount within the due date. However, you can also choose to make

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minimum payment of only 5 % of your outstanding balance at a highly competitive financial

charge of 2.75 % per month on VISA and 2.50 % per month on MasterCard

6. Discrepancy In statementsIf you notice any discrepancy in your monthly statement, report the matter to our Customer

Services Team on 111-002-002 within 7 days. In order to check statement entries, retain all

your sales slips and printed receipts. This will help you keep a record of all your transactions.

7. Monthly Payments

You can make your monthly payment by:

Paying cash over the counter at any of the Standard Chartered branches in Pakistan.

Sending a cheque / pay order / draft in the name of Standard Chartered Bank, Credit

Cards' by mail or through the drop box at all Standard Chartered branches. Please indicate

your name and card number on the reverse of the cheque.

Through Auto Debit for Standard Chartered customers (5 % of the outstanding balance or

the total amount)

By Telegraphic Transfer. Your payment will be credited to your Card account after funds

are received by Standard Chartered, Consumer Banking, and Cards Pakistan.

8. Stolen and Lost Cards

In the event that your card is lost or stolen, please report it to a member of our

Customer Services Team immediately on 111-002-002

9. Problem Regarding Standard Chartered Credit Cards

If at any time you face any problem regarding your Credit Card or Credit Card account, call our

24-hour Customer Service on 111-002-002 or you can email your queries directly to

ask.us@pk.standardchartered.com

Types Of Standard Chartered Credit

Credit cards of standard chartered can be divided into 3 basic Categories.

1. Visa Cards

2. Masters Cards3. American Express Card

Cards Standard Chartered Visa Cards

Standard Chartered VISA Card is a globally renowned brand

that has world wide acceptance. You can avail of exciting

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features and benefits attached with this Card. Get ready to bring ultimate indulgence to your

lifestyle.

Standard Chartered is providing following types of Visa Card

1. SaadiqVISA Credit Cards

2. Easy Credit Card

3. Standard Chartered PIA Co Brand Credit Card

Saadiq VISA Credit Cards

At Standard Chartered, we believe in respecting your values. We are pleased to introduce

Standard Chartered Saadiq VISA Credit Cards Pakistans first Shariah-compliant Riba Free

Credit Cards, which combine the international acceptability of VISA with worldwide reliability

and excellent service.

The Saadiq VISA Credit Cards have been carefully

developed by an international team of professionals

with Islamic financial expertise, who ensure that our

products are within the guidelines of Islamic finance.

Saadiq Credit Cards operate on the Ujrah concept

which is based on a fixed fee structure, meaning that

only fixed fee will be charged to the customer. The

Card would not be levied with any floating percentagefee dependent upon the outstanding balance. The

entire fee structure is based on fixed fee unlike conventional credit cards where fee is a

percentage of the outstanding amount or transaction amount.

How it Works

Saadiq VISA Credit Cards give you the option of either paying the entire outstandingamount or pay only a minimum amount of the outstanding balance by the payment due

date.

Incase, you opt to pay any amount less than the total outstanding balance, the remainingbalance gets transferred to the Service Account which is a non-interest and non-profitbearing account, linked to your Saadiq Credit Card.

A fixed monthly maintenance fee will be levied only for the month the Service Account isused and reflects an outstanding balance.

Service Account

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Service Account is a non-interest and non-profit bearing account which is maintained by the

Bank for the Saadiq VISA Credit Card members.

Any amount of the current balance which is due and unpaid after the relevant payment due

date, is transferred from the Card Account into Service Account.

A fixed monthly maintenance fee will be levied when the customer has balance on his Service

Account irrespective of the outstanding balance

Charges

A fixed fee is charged for maintenance of the Service Account and continued usage of the

Card. The fee would vary for different card types (Classic, Classic Blue, Gold and Gold Plus),

however, would remain the same for a particular card type. Maintenance fee will be charged only

if the Service Account is utilized and/or reflects a balance for that specific month. The fee is not

dependent on duration of the Service Account maintained and/or the amount of the outstanding

balance. No fee will be charged for the months when the Service Account is not utilized

Easy Credit Card

One of the most unique products, the PakistanStandard Chartered Easy Credit (EC) combines the

power of a Credit Card with the convenience of a

Cheque book. As an EC card member you will be

entitled to a host of benefits that no other facility offers. EC

provides you with the lowest financial charge and access to

Standard Chartered services around the globe. This means that

Easy Credit is the best facility offering more and more across the country.

Cash Withdrawal Limit

You can withdraw cash up to 30 % of your credit limit. For example, if your credit limit is Rs.100,000 and your withdrawal limit is 30 %, then your cash withdrawal limit will be Rs. 30,000

Eligibility Criteria

For being eligible for easy card you just need to meet the Easy Credit criteria.You have to applyfor the cheque book, through the request form, which is part of the Easy Credit Application Form.

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