PLASTIC MONEY

Introduction to the topic

Plastic cards, or what is described as plastic money, happen to be the best-known method

of payment in this day and age. Most of us did not grasp how quickly that little piece of plastic

took its place in our lives. Credit cards online will continue to be used for the multiple

advantages they offer us.

We realize all too well that online credit cards work as an expedient payment option to

pay for our many purchases. Imagine stashing money in all your pockets as against merely a

little plastic rectangle.

Additionally, at present going around with a large quantity of cash on you is not a wise choice

in terms of safety. The safety issue assumes even greater significance when you are visiting

someplace far. Money is easy to spot and pick-pockets and thieves are able to use nicked money

equally easily because these funds are not traceable. Online credit card dealings however, are

detectable and carry an audit trial as well.

There has been a growth on electronic payment due to the shift in technology, growing

access to internet among the customers and convenient modes of delivery and payment. Plastic

money also known as Plastic cards acts as a vital tool for every day transaction of people today.

The various Plastic cards include ATM cards,Debit Card,ATM cum Debit Card,Credit

Cards, Smart Card, Charge Cards, Co-branded cards, add on cards and so on.

ATM Cards

Automated Teller machine (ATM) cards is capable of doing variety of functions.It can perform

both cash and non-cash transactions in secured environment.

-ATM Cash Transactions includes deposits and withdrawals

-Non cash transactions incude

* Providing Mini Statement of last five transactions.In some banks upto last

ten transactions

* Balance enquiry

* Stop Payment instructions

* Transfer of funds between acounts

* Requisition of Cheque books,drafts etc.

* Bill payments ( electricity bills,Telephone bills etc)

Debit Card:

The bank issues debit card only if the person has an account in the bank.This card is useful to

make payment from Member Establishments (ME) who have arrangements with the card issuing

bank or agency.They check the balance and deduct the amount from the bank balance online.

When a debit card is issued to make the payment,the total amount charged is instantly reduced

from the bank balance of the account holder.

All credit and debit cards are affiliated to two major issuers-VISA and Master Card.Master Card

and VISA are global non-profit organizations who promote the growth of the card business

throughout the world.They have built vast network of Member Establishments so that customers

can use the cards worldwide for their debit and credit purchases.

Debit Cum ATM Card:

This is most common nowadays.The same debit card can be used to draw cash from the ATM

and also make payment to the shops for purchases.This is two in one card.

Credit Cards:

This card enables the client to obtain goods or services from the various shops having

arrangement with the issuing agency even if there is no balance in his/her savings or current

account.The bank assumes that the loan will be repaid by the customers at later date.The credit

card holder has to make payment for the dues before the due date. Otherwise late payment fee is

levied in the next billing statement. Normally,a limit of the credit will be fixed by the bank for

the amount of purchases to be made by the customer based on the net worth of the customer.

Charge Cards:

A Charge card has all features of credit card.But, after using the charge card the entire payments

of the bills has to be made by the due date.If it is failed to be done,then the client is likely to be

considered as a defaulter and he has to pay a steep late payment charges. But in case of Credit

cards, the client is not declared as a defaulter if he misses to pay by due date..In such case,a late

fee is levied in the next billing statements of the credit card holder.

AMEX (American Express) and Diners Club card are well known branded charge cards.They

have their own merchant establishments and tie ups and does not depend on the network of

Master card or VISA. These care are typically meant for the high income group categories and

companies. These cards are not acceptable at many outlets. But wide variety of special privileges

are enjoyed by the AMEX card holders and Diners Club Cardholders.

Smart Cards:

A smart Card contains an electronic chip which is used to store Cash. This is most useful to pay

for small purchases for example in Fairs,coffee shops etc. No identification,signature or payment

authorization is required for using this card. The exact amount of purchase is deducted from

smart card during payment.Currently, this product is available in very developed countries like

US.

Affinity Card:

The card issuer has a tie up with popular organizations and institutions which are often non-

profit organizations like Stanchart Cricket Cards or City WWF card.When a card is used, a

certain percentage is contributed to the organization or institution by the card issuer.

Photo Card:

When a Photo is imprinted on the card,it helps to identify the user of the credit card and is

considered to be safer. In many cases,Photo card can also be used as identity card.

Global Card:

Global cards can be used as credit cards instead of cash and traveler cheques while traveling

abroad to foreign countries for business or personal reasons.

Add On Cards:

It is a privilege offered to the spouse, parents, Children or other family members of the original

card holder. Normally, an issuing bank permits two add on cards per credit card. All expenses

incurred on add on card are billed to the primary card holder.

Petro Card:

Some Petroleum companies allow customers to pay for the fuel through electronic medium. It

offers a scheme of gifting the points to the customers, when they pay for the fuel using petro

card. It is convenient, secured and speedy mode of transaction. Co-branded credit cards like

IOC-Citi bank and HPCL-ICICI bank are the co-branded petro cards available in the market.

Today, the Indian mode of payment has shifted from currency to electronic mode. This is due to

the high money valued transactions and more risk involvement. The new electronic payment and

settlement act should follow the strict norms for banks and merchants to make secure payments

and prevent money laundering as the transactions through plastic money will be increasing and

increasing in the near future..

LITERATURE REVIEW

Price regulation of plastic money: A critical assessment of Spanish rules

Benito Arruñada ( benito.arrunada@upf.edu)

Abstract

Recent decisions by the Spanish national competition authority (TDC) mandate

payment systems to include only two costs when setting their domestic multilateral

interchange fees (MIF): a fixed processing cost and a variable cost for the risk of

fraud. This artificial lowering of MIFs will not lower consumer prices, because of

uncompetitive retailing; but it will however lead to higher cardholders’ fees and,

likely, new prices for point of sale terminals, delaying the development of the

immature Spanish card market. Also, to the extent that increased cardholders’ fees

do not offset the fall in MIFs revenue, the task of issuing new cards will be

underpaid relatively to the task of acquiring new merchants, causing an imbalance

between the two sides of the networks. Moreover, the pricing scheme arising from

the decisions will cause unbundling and under provision of those services whose

costs are excluded. Indeed, the payment guarantee and the free funding period will

tend to be removed from the package of services currently provided, to be either

provided by third parties, by issuers for a separate fee, or not provided at all,

especially to smaller and medium-sized merchants. Transaction services will also

suffer the consequences that the TDC precludes pricing them in variable terms.

DEBIT AND CREDIT CARDS

By Richard Willsher

The great thing about paying with plastic is that it's convenient and secure but which sort of card

to use?

Both debit and credit cards are issued by banks and building societies. Although they are the

issuers what it means is that they join one of the big card systems such as Visa or Mastercard.

Although both debit cards and credit cards can be used to pay for goods in shops there are some

important differences between the two.

The two debit cards used in this country are Switch and Visa Delta. They are accepted at

thousands of shops, garages, theatres, airlines, car hire companies, hotels and many other places.

That is why they are so convenient. You have to be 16 to have one issued to you. You present

your card at the till and the people you are paying either swipe it through a special telephone

terminal or issue you with a paper voucher. Once you have signed the money is them paid on

your behalf within a day or two.

Not only is a debit card a convenient way to pay but it makes sure you can't spend more than

you've got in your bank account. You remain in control. Credit cards however work in a very

similar way but while they give you more spending power they can be a lot more difficult to

keep under control.

When you buy things the process is the same. You sign the credit card receipt at the retail outlet

or fill out the on-screen form with the card details if you are making an Internet purchase. But

instead of debiting your bank account the money you've spent is noted by the credit card issuer

who have put a credit limit in place for you. You can spend up to this limit which could be as

little as a few hundred pounds or as much as many thousands. How much of a limit they grant

you depends on how much they think you are likely to be able to repay. They then send you a

statement once a month which shows how much you have spent. You then pay against this

statement by the due date given on the statement.

The answer then is to use a credit card if you are disciplined enough to pay off your monthly

bills and avoid wasting money on interest. Otherwise stick to a debit card where it is easier to

stay in control. That way the plastic will always be your convenient and flexible friend.

Plastic Money - The Indian Experience

Abstract:

The case examines the reasons for the increasing popularity of debit cards in the Indian plastic

money market. It explores in detail the security of card transactions and the technologies being

adopted by companies to ensure the same. The case also discusses the basic steps involved in

plastic money transactions.

OBJECTIVES OF THE STUDY

To study the awareness of the plastic money.

To study reasons for opting plastic money.

To study the purpose of using plastic money.

To study the perception of the consumers regarding plastic money.

RESEARCH METHODOLOGY

Research refers to a search for knowledge. It can also be defined as scientific

and systematic search for pertinent information on a specific topic. In fact,

research is an art of scientific investigation. The search for knowledge through

objective and systematic method of finding solution to a problem is a research.

Redmen and Mory defines “Research as a systematized effort to gain new knowledge”.

Research methodology is a way to systematically solve the research problem. In it, step-by-step methods are followed to solve a particular problem.

RESEARCH DESIGN

The research is design is the conceptual structure within which research is conducted; it

constitutes the blue print of the collection, measurement and analysis of the data. A research

design is the arrangement of the conditions for the collections and analysis of the data in a

manner that aims to combine relevance to the research purpose with economy in procedure. A

research design includes an outline of what the researcher will do from writing the hypothesis

and its operational implication to the final analysis of data.

Research Design can be further categorized into three categories as follows:

SAMPLING AND DATA COLLECTION

TYPES OF

RESEARCH DESIGN

EXPLORATORY RESEARCH

DESIGN

DESCRIPTIVE RESEARCH

DESIGN

EXPERIMENTAL RESEARCH

DESIGN

DATA COLLECTION

After formulating the research design comes the need to collect data. Data is very essential to

reach at any conclusion. There are various sources of data collection which are as follows:

PRIMARY DATA

SECONDARY DATA

Primary sources are those sources of information which are explored for the first time by the

researcher. It is the first hand information which has not been used in the past. It includes:

Personal Investigation

Observation Method

Information from correspondents.

Secondary data includes the information which has been already used by the researcher. As the

name implies, it is the second hand information. It includes:

Published Sources such as Journals, Government Reports, Newspapers and Magazines

etc.

Unpublished Sources such as Company Internal reports prepared for analysis and

investigation purposes.

Company’s official websites or other websites on the internet like yahoo or Google etc.

SAMPLING

It is not possible for any researcher to include each and every member of the universe in his

research process so he has to select small portions of the universe which is its true representative.

This group is known as sample.

The process of selecting the desired sample from the universe to solve the research problem is

called sampling.

Sampling technique can be categorized into two broad categories namely: -

PROBABILITY SAMPLING

NON-PROBABILITY SAMPLING

DATA PROCESSING

Once the data has been collected then comes the stage of data processing. Raw data is of no use

if it is not processed properly using any statistical tool. It includes calculations, tabulations and

coding & editing of data collected through different sources.

RESEARCH METHODOLOGY USED IN THE PRESENT STUDY

COVERAGE OF THE STUDY

The universe of the present study is Bank customers in the area of Chandigarh & Mohali.

RESEARCH DESIGN

Research type Exploratory Research

Source of Data Collection Primary & Secondary

Research Instrument Questionnaire

SAMPLE PLAN

Sampling Technique Probabilistic using convenient sampling

COLLECTION OF DATA

The study is based on primary and secondary data

Primary data: - Survey, Interview

Secondary data: - Company record files, sites and articles.

ANALYSIS PATTERN

Bar-diagrams, Pie charts and Tables.

Content Analysis, Questionnaire Analysis.

NEED OF THE STUDY

The importance of the study and analysis of the training practices in India is emphasized

by the fact that the training system is going to decide the employee performance and job

satisfaction up to large extent.

This training practice shows the impact of the employee’s performance on the

organization success in today’s competitive era.

Therefore the present study aims at finding out the impact of training practices on the

employee performance, job satisfaction and on overall impact of training programmes on

company’s performance.

LIMITATIONS OF THE STUDY

There are certain limitations in the present study which are follows:

1. The study can’t cover whole of the region due to shortage of resources and human

limitation.

2. The information is collected through primary and secondary data. Hence, the

limitation of the reliability and shortcoming of secondary data may affect the

result.

3. The information provided by the Bank Customers is not definitely true.

4. The samples of Bank Customers are not representative of the total workforce.

5. The Bank Customers hesitate disclosing the true facts of plastic money in order to

secure their income.

6. There is no measure to check out whether the information provided by the Bank

Customers is correct or not

BIBLIOGRAPHY

WEBSITE

● www.onprepaidcard.com/24775/

● http://en.wikipedia.org/wiki/Money

● http://www.financialexpress.com/fe_full_story.php?content_id=80188

● http://economictimes.indiatimes.com/Money_Matters/Credit_Cards/News/

Plastic_money_use_gains_pace_in_India/articleshow/msid-1268620,curpg-

2.cms

● http://www.cinechance.com/a/how-to-get-best-out-of-your-plastic-

money.html

● http://www.icmr.icfai.org/casestudies/catalogue/IT%20and%20Systems/

Money.htm

● http://sify.com/finance/loans/fullstory.php?id=13001073&vsv=432

● http://www.sitagita.com/view.asp?id=7267

● http://www.financialexpress.com/fe_full_story.php?content_id=159577

● http://www.thehindubusinessline.com/canvas/2002/01/19/stories/

2002011900080400.htm

A PROJECT SYNOPSIS

ON

AN ANALYTICAL STUDY ON

PLASTIC MONEY

Submitted by:

PRIYANKA GOEL

REG. NO. 420820370

PGDM (FINANCE)

Study centre:

VISION INSTITUTE OF MANAGEMENT STUDIES

PERSONAL DETAILS

Name : JITENDER KUMAR

Registration No. : 420820699

Name of programme : (42) Post Graduate Diploma in

Management

Specialization : Finance

Contact No. :

Email : vermajeetu1@gmail.com

Correspondence Address : A-1/1, SECTOR-16, ROHINI, DELHI-110089

Title of the Project : The title of the Project is an analytical study on “FACTORS AFFECTING INVESTORS PREFERENCE FOR MUTUAL

FUNDS IN INDIA” AT

MAHINDRA FINANCE

PROJECT GUIDE

Name : Ch. SAMARESH CHHOTRAY

Designation : Faculty

Contact no. : 9717219922

E mail : cssrc1974@gmail.com

CURRICULUM VITAE OF PROJECT GUIDE

NAME : Ch. Samaresh Chhotray

QUALIFICATION : B.COM (HONOURS)-DU

M.COM (DU)

CA

MBA (finance- IGNOU)

EXPERIENCES : AIMA faculty for MBA/PGDM since 2002

Visiting faculty with VIAS for MKU-MBA

Visiting faculty for IIPM (Accounts & fin.)

Visiting faculty with HIMS (Gauhati Univ -

regular industry integrated)

Visiting faculty with UEI Global

WORK EXPERIENCE : Worked with MSIL as Assistant Manager

(Finance) for 2 years.

Worked with Titan industries as Assistant Manager between 2004 to 2006.

SUBJECTS TAUGHT : FINANCIAL /CORPORATE ACCOUNTS

COST /MGMT ACCOUNTING

FINANCE MGMT

OPERATION RESEARCH

Quantitative tech/ STATS

International finance Mgmt

SECURITY ANALYSIS & PORTFOLIO MANAGEMENT

BUSINESS RESEARCH METHODS.

FOREX EXCHANGE MGMT.

HOBBIES : READING & WRITING

TRAVELLING

MOTIVATING YOUNG PEOPLE

LISTENING MUSIC

WATCHING ALL KIND OF SPORTS.

Contact no:- 9717219922

Email:cssrc1974@gmail.com

ABOUT ME

Sex Male

Nationality Indian

Religion Hinduism

Language known English, Hindi, Oriya and Bengali

Marital status Married

MOTTO : EXTREME HARD WORK &

DETERMINATION

ADDRESS

First Floor, Rawat villa

Ward no 2,Mehrauli

New Delhi- 110030

Materials

My teaching methods are primarily power point Slides and subject notes in Ms Word in subjects like Accounting/ finance/IFM/SAPM/stats/QT/Research and Strategy.

Apart from that I am in process to write a book tentatively called (Accounting for Non- Commerce Students) which will help students pursuing BBA/MBA and M.COM.

Strengths

My ability to understand each student separately and address their problems separately. I will bring at least twelve years of street smart teaching experience.

I was into coaching students of CA/CS/CWA/B.COM/M.COM/MBA/MFC/ACCA & CPA Very early right from 1996-97 and thus has greater understanding of the needs of students and their problems.

I never turn away student queries.

Promise

I believe in finishing projects in time and ethically come what may. The great philosopher Karl Marx once said “Labour changes APE to MAN” and this inspires me.

I believe in HARD WORK and working with Professional efficiency and Dignity”.

Given an opportunity, I will work to the best of my ability and help you and your institution find and accomplish better standards in education.

I believe in the notion “nothing precedes hard work, success only comes by…..

With Regards

Samaresh Chhotray