Plastic Money

Presented By…Anoop Vasu

About

•Plastic money or polymer money, made out of plastic• It is a new and easier way of paying for goods and

services• It include all types of plastic bank cards

BIRTH OF PLASTIC MONEY

• . Plastic money was introduced in the 1950s and is now an essential form of ready money which reduces the risk of handling a huge amount of cash

•Credit cards were invented 60 years back•The Diners’ Club card, Introduced in New York City

in 1950, the card allowed Diners’ Club members to eat at 27 restaurants in New York City on credit

Parties involved• Cardholder: The holder of the card used to make a purchase; the

consumer• Card-issuing bank: The financial institution or other organization

that issued the credit card to the cardholder.• Acquiring bank: The financial institution accepting payment for

the products or services on behalf of the merchant• Merchant account: This could refer to the acquiring bank or the

independent sales organization, but in general is the organization that the merchant deals with.

• Credit Card association: An association of card-issuing banks such as Discover, Visa, MasterCard, American Express, etc. that set transaction terms for merchants, card-issuing banks, and acquiring banks.

Types of plastic money :

•Cash Card or ATM Card•Credit cards•Debit cards•Prepaid cash card•Charge cards•Smart cards•Global cards•Diners Club cards

Cash Card or ATM Card•A card that will allow you to withdraw money

directly from your bank via an Automated Teller Machine (ATM) but it will not allow the holder to purchase anything directly with it.

•Unlike a debit card, in-store purchases or refunds with an ATM card can generally be made in person only, as they require authentication through a personal identification number or PIN. In other words, ATM cards cannot be used at merchants that only accept credit cards.

Credit Cards•A credit card can be viewed as a payment

mechanism which enables the holder of the card to purchase goods (or services) without parting with immediate cash

•Customer has to make the payment at the end of a specified period

Debit Card

Pre-paid Cash Cards

•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

•They provide some specials benefits or discounts to the holder of the card.

•Pre-paid Cash Cards Examples:•DMRC Smart Cards•Pantaloons Green card•Cards used in Food courts of Malls

Charge cards A charge card carries all the features of credit cards.

However, after using a charge card you will have to pay off the entire amount billed, by the due date . If you fail to do so, you are likely to be considered a defaulter and will usually have to pay up a steep late payment charge.

Global cards Global cards allow you the flexibility and convenience

of using a credit card rather than cash or travellers checks while travelling abroad for either business or personal reasons.

Diners Club card

•Diners Club is a branded charge card. There are a wide variety of special privileges offered to the Diners Club cardholder. For instance, as a cardholder you can set your own spending limit. Besides, the card has its own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa.

How are they different?Credit Card

• Borrowing money from a bank or financial institution. (Spending "other's" money)

• Need not be connected to any bank account

• Pay additional interest drawn on the amount borrowed

• Limit: Credit line

Debit Card

• Funds taken from the money that you have in your bank account. (Spending your "own" money)

• Needs checking Account/Savings Account

• No interest to be paid• Limit: Equals your account

limit

Advantages of Plastic Money :

•Purchasing Power•More convenient•Extra Safety •Credit Limits•A need of emergencies•Additional features

Disadvantages of Plastic Money :

•Complicated terms and conditions•Less Global availability•Worn out Magnetic strip• Increased Debt and High Interest Rates•Fraud•Over Budget

•Remove black money from market•Actual currency in circulation reduces•Penetration increases impact on GDP and

consumption increases•Cards reduces transactional and

opportunity cost•Enhance economic growth

Conclusion

Thank You