Project Report

On
PLASTIC MONEY
Bachelor of management studies
Semester V
(2016-2017)
Submitted by
ABHISHEK SHUKLA
24
MODEL COLLEGE OF COMMERCE
Rajbhar nagar, chinchpada road, katemanvali P.O.,
Kalyan (east)

PLASTIC MONEY
Bachelor of management studies
Semester V
Submitted
In partial fulfillment of the requirements

For the award of degree of

Bachelor of Management Studies
By
ABHISHEK SHUKLA
24
MODEL COLLEGE OF COMMERCE
Rajbhar nagar, chinchpada road, katemanvali P.O.,
kalyan (east)

Declaration

I, ABHISHEK SHUKLA the student of T.Y.BMS semester V (2016-2017) hereby

declare that I

have completed the project on PLASTIC MONEY The information

submitted is true and original to the best of my knowledge

ABHISHEKSHUKLA
24
MODEL COLLEGE OF COMMERCE
Rajbhar nagar, chinchpada road, Katemanvali P.O., kalyan (east)

Acknowledgement
To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.
I would like to acknowledge the following as being idealistic channels and fresh dimensions
in the dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.
I would like to thank my Principal, Brahmaule for providing the necessary facilities
required for completion of this project.
I take this opportunity to thank our coordinator Asha Jain for her moral support and
guidance.
I would also like to express my sincere gratitude towards my project guide Asha Jain whose
guidance and care made the project successful.
I would like to thank my college library, for having provided various reference books and
magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped me in
the completion of the project especially my parents and peers who supported me throughout
my project

INDEX
Chapter p NO.
1

PARTICULARS
INTRODUCTION

PAGE NO.

2
3

OBJECTIVE
CREDIT CARD

4
5

DEBIT CARD
ADVANTAGE AND
DISADVANTAGE OF

PLASTIC MONEY
RESEARCH

7
8
9
10
11
12

METHODOLOGY
SIGNIFICANCE
SCOPE
LITERATURE REVIEW
DATA ANALYSIS
CONCLUSION
BIBLIOGRAPHY

INTRODUCTION

Plastic money or polymer money, made out of plastic, is a new and easier way of paying for
goods and services. 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. It includes
debit cards, ATMs, smart cards, etc. Credit cards, variants of plastic money, are used as
substitutes for currency Credit cards in India are gaining ground. A number of banks in India
are encouraging people to use credit card. The concept of credit card was used in 1950 with
the launch of charge cards in USA by Diners Club and American Express. Credit card
however became more popular with use of magnetic strip in 1970.
Credit card in India became popular with the introduction of foreign banks in the country.

Credit cards are financial instruments, which can be used more than once to borrow money or
buy products and services on credit. Basically banks, retail stores and other businesses issue
these. It was introduced around and has now become an essential form of ready money. One
of the main reasons for introducing plastic money, especially credit cards is to reduce the risk
of handling a huge amount of cash by individuals/merchants. The growth and popularity of
plastic money in India has been phenomenal in the last few years.
In the present day world, no one wants to be bothered by the presence of huge cash in his or
her wallet and the Indians are no exceptions. The unprecedented growth in the number
of credit card users has stimulated the Indian economy by a significant extent. The arrival of
malls, multiplexes, online shopping stores and shopping complexes have contributed to the
growth of the use of plastic cards.
The Best credit cards in India are usually meant for specific user group such as women,
students and small business owners. These cards are offered to the prospective customers
with appealing deals.
Over the years, Indians have been averse to credit cards. This is primarily because they
believed that spending through credit is a sure shot way of getting into the debt trap. Of
course, movies highlighting the sad state of a borrower did not exactly help matters. And
even the local kirana shops have the famous lines Aaj Nagad, Kal Udhari (cash today, credit
tomorrow).But the situation is not actually that scary. And it is all about right timing. Credit
cards can be a useful tool at the hands of savvy consumers who can effectively use the
benefits offered by cards.It is important to know that credit card is a financial tool that needs
to be used responsibly. While it ensures cash flow, it is not advisable for customers to borrow
for a longer period of time. Use it effectively and take good advantage of the time line and
clear your debts, without any additional costs.

Major Banks issuing Credit Card in India

State Bank of India credit card (SBI credit card)

Bank of Baroda credit card or BOB credit card

ICICI credit card

HDFC credit card

IDBI credit card

ABN AMRO credit card

Standard Chartered credit card

HSBC credit card

Citibank Credit Card

Global player in Credit card market are Master Card, VISA Card, American Express, Diners
Club International.

The first 6 digits of credit cards number are known as the issuer identification number
(IIN),previously known as bank identification number (BIN).These identify the institution
that issued the to the card holder

The IIN ranges used by the major card schemes are

VISA: Card number start with a 4.
Master Card: Card start with No.51 and 55
Diners Club: Card number beginning 36 or 38
Amex Ex: Card number beginning 34 or37

PAYMENT OPTIONS

Progress in civilization in its turn has brought out radical changes in the manner of trading.

The need for something intrinsically useful and easily applicable in everyday dealing is
clearly felt. Cash in the form of currency notes and coins makes up just one form of the
payment system. Development in banking while also giving inputs to the further development
of cash brought about a second phase in payment namely paper instructions such as cheques
and credit transfers. The requirement for greater flexibility and convenience has led to
electronic payments, and this is where plastic cards have proved their worth. It allows the
card issuers to limit the sum of money the card-holders wish to spend. The spending of cardholders who have defaulted on payments or who are over their credit limit can be restricted
until the balances are cleared.

Definition of credit card

A credit card is a credit-token within the meaning of section 14(1), Consumer Credit Act
1974 of the UK which defines a credit-token as a card, cheque, voucher, coupon, stamp, form
booklet or other document or thing given to an individual by a person carrying on a consumer
credit business, who undertakes:-

That on the production of it (whether or not some other action is also required), he
will supply, cash, goods and services (or any of them) on credit, or

 That were, on the production of it to third party (whether or not any other action is
also required), the third party supplies cash, goods and services (whether or not
deducting any discount or commission), in return for payment to him by the individual.

In very simple words credit card can be termed as an unsecured personal loan offered to
customers by the banks where the card-holder could purchase goods and services from
authorized merchant or merchant establishments (MEs) of the bank up to a fixed limit on
credit. Such credit is normally made available for a period of 30 to 45 days.

A credit card can also be used to secure airline tickets and car rentals. Having a credit card
can make purchases and reservations easier; however, a credit card should be used
responsibly so that the consumer does not over extend his finances.

Credit cards are usually issued by banks or other financial institutions. Some credit cards may
be available online.

OBJECTIVES OF STUDY

Primary objectives

To know the perception of people towards plastic money.

Secondary objectives

To know the importance of plastic money in the daily life of consumers W.R.T credit and
debit cards.

To study the benefits of debit card and credit cards.

To find out the market leader among the various banks/companies issuing credit and debit
cards

To know the problems faced by respondents using plastic money.

To study the satisfaction level of consumers towards plastic money

CREDIT CARD
INTRODUCTION
A credit card is a small plastic card issued to users as a system of payment. It allows
its holder to buy goods and services based on the holder's promise to 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 cash advance to the user. Usage
of the term "credit card" to imply a credit card account is a metonym.
When a purchase is made the user would indicate consent to pay by signing a receipt
with a record of the card details and indicating the amount to be paid. Issuer agrees to pay the
merchant and the credit card user agrees to pay the card issuer.
DEFINITION:The credit card can be defined as A small plastic card that allows its
holder to buy goods and services on credit and to pay at fixed intervals through the card
issuing agency.
MEANING:A credit card is a card or mechanism which enables card holder to purchase goods,
travels and dine in a hotel without making immediate payments. The holders can use the
cards to get credit from banks up to 45 days.
The credit card relieves the consumers from the botheration of carrying cash and ensures
safety. It is a convenience of extended credit without formality. Thus credit card is a passport
to, safety, convenience, prestige and credit.

ADVANTAGES & DISADVANTAGES OF CREDIT CARD

ADVANTAGES OF CREDIT CARD
The benefits of credit card can be grouped as follows:
(A) BENEFITS TO THE BANK
a) A credit card is an integral part of banks major services these days. The credit card
provides the following advantages to the bank: the system provides an opportunity to the
bank to attract new potential costumers.
b) To get new customers the bank has to employee special trained staff. This gives the bank
an opportunity to find the latent talent from among existing staff that would have been
otherwise wasted.
c) The more important function of a credit card, however, is simply to yield direct profit for
the bank. There is a scope and a potential for a better profitability out of income / commission
earned from the traders turn over.
d) This also provides additional customer services to the existing clients. It enhances the
customer satisfaction.
e) More use by the car holder and consequently the growth of banking habits in general.
f) Better network of card holders and increased use of cards means higher popularity and
image of the bank
g) Savings of expense on cash holdings, i.e. stationery, printing and man power to handle
clearing transactions while considerably is reduced. It increases
(B) BENEFITS TO CARD HOLDER
The principal benefits to a card holder are:
a) He can purchase goods and services at a large number of outlets without cash or cheque.
The card is useful in emergency, and can save embarrassment.
b) The risk factor of carrying and storing cash is avoided. It is convenient for him to carry
credit card and he has trouble free travel and may purchase his without carrying cash or
cheque.
c) Months purchases can be settled with a single remittance, thus, tending to reduce bank and
handling charges.
d) The card holder has the period of free credit usually between 30-50 days of purchase

e) Cash can usually be obtained with the card, either on card account or by using it as
identification when encasings a cheque at the bank.
f) Availing credit with minimum formality.
g) The credit card saves trouble and paper work to traveling business man.
(C) BENEFITS TO THE MERCHANT ESTABLISHMENT
The principal benefits offer credit card to the retailer is
a) This will carry prestigious weight to the outlets.
b) Increases in sale because of increased purchasing power of the cardholder due to unbilled
credit available to the card holder.
c) The retailers gain from the impulse buying and trading up the tendency to buy the bigger
or better article
d) Credit card ensures timely and certainly of payments.
e) Suppliers/sellers no longer have to send reminders of outstanding debits.
f) Systematic accounting since sales receipts are routed through banking channels.
g) Advertising and promotional support on national scale.
h) Development of prestigious clientele base.
DISADVANTAGES OF CREDIT CARD
The following are the common disadvantages of the credit card:
a) Some credit card transactions take longer time than cash transactions because of various
formalities.
b) The customer tends to overspend out of immerse happiness.
c) Discounts and rebates can rarely be obtained.
d) The cardholder is responsible for charges due to loss or theft of the card and the bank may
not be party for loss due to fraud or collusion of staff, etc
e) Customers may be denied cash discount for payment through card.
f) It might lead to spending habits and cardholders may end up in big debts
i) Avoid the entire cost and security problem involved in handling cash.
j) Losses to bad debts and reduced an additional liquidity is
k) It also allows him to delegate spending power to add on members
l) Credit card is considered as a status symbol.

STEPS FOLOWED IN CREDIT CARD TRANSACTION

1. AUTHORIZATION

For Internet Merchants, the shopping card is connected to or integrated with a

Payment Gateway. For Retail Merchants, the card is swiped through a magnetic
reader on the point of sale terminal the authorization is transmitted to the appropriate
card issuer for approval. The issuing bank of card issuer authenticates the card holder

and approves or declines the transaction amount.

It is important to note that no money changes hands during the authorization.
Merchants must re-present the transaction to receive payment.

2. Merchant balancing

This is also known as batching out. Most pos terminals and all payment gateway per
firm an auto close functions at the and of the day and batch out automatically.

3. Capture

The front end processor matches the authorization data to the settlement data and
transmits the card capture file to a back end processor for V/MC transactions or to the
appropriate card issuer for other card types.

4. Clearing

During this stage the back end processor performs compliance checks and risk
management procedures and transmits the transaction to V/MC or to the appropriate
card issuer for other card types.

5. Interchange (VS/MC Only)

During this stage the V/MC Association sort the transactions by issuing bank and
transmit them to the appropriate issuing banks for settlement.

6. Settlement

During this stage the Issuing Bank calculates fees and deductions and routs the net
funds to the appropriate Card Issuer which determines the daily deposits for the
merchants.

7. Merchant ACH

During this stage the acquiring bank or card issuer transmits the merchant deposit to
the merchants checking account.

Different Types of Credit Cards

Credit cars are of various types, every one has to select credit cards on the
basis of the pros and cons of each type of credit card and at the same time the nature of use.
This article gives an insight into the several types of credit cards available in the market
Today, credit card customers enjoy more options and choices than ever before. To gain new
customers, credit card companies compete by offering new services and cards to customers.
No matter what your needs, chances are good that there is a card out there that would be ideal

for you. If you are looking for the right card, you can begin by considering the many types of
cards available to you:
Low Interest Credit Cards
These types of credit cards offer very low interest. In some cases, these cards
just charge a few percent interests. The reasons for this are numerous. In most cases, the low
interest rate is for a limited time only. After a set number of months, you will begin paying
higher interest rates. In some cases, low interest credit cards are not really credit cards at all they are debit cards linked to a low-interest loan such as a line of credit. Check your
agreement to find out what type of card you have. If you need to consolidate debts or if you
like the idea of having low interest for a while, this type of credit card can be perfect for you.
Instant Approval Credit Cards
These cards are really a product of our fast-paced society. The idea behind this type of credit
card is that once you fill out your application, you will be told whether you are approved or
not right away. The approval process only takes a few minutes. Instant approval credit cards
are very popular online and applicants can apply via the internet or over the phone.
If you are very impatient or need credit right away, these types of cards can be for you.
However, you should be aware that these cards do not guarantee that you will be approved
right away - sometimes, more time is needed to process your application. Another drawback
to these cards is that they rely heavily on your credit score. If you have poor credit or any
extenuating financial circumstances, these types of cards may not be for you.
Balance Transfer Cards
Balance transfer cards are a type of temporary low-interest card that is meant to help you
consolidate your debt. They work this way: if you have several credit cards with a balance,
you can get a balance transfer card. You then transfer all your credit card debt onto the new
card and work to pay it off. Since the new card has a low interest rate, you can quickly repay
your
bills.
If you are in debt, a balance transfer card can be a great way to get out of debt. It offers the
convenience of one bill and low rates. However, some cards have high fees. Also, if you run
up your other cards after consolidating your debts or if you are unable to pay off your new
card in the limited time before the low interest rate increases, you may find yourself even
more in debt than before.
Rewards Credit Cards
Rewards credit cards offer you points, rewards, or bonuses for every cash purchase made
with your credit card over time. As you accumulate rewards or points, you can redeem your
bonus for entertainment events, purchases, travel, and other fun prizes. Some cards even offer
customers extra automatic-enter sweepstakes and draws. Each time you use your card, you
are
entered
into
a
draw
to
win
specific
prizes.
These types of cards are really a marketing tool for card companies. Companies know
that customers love rewards and prizes and so offer these enticements to lure customers. The
major advantage of these cards is that they can help you get more cash value for your money.
They can also be fun and rewarding for almost any credit card customer. However, not all
reward credit cards are a deal. Some charge high fees to offset the costs of the bonuses. Some
also have very low points systems, meaning that you need to spend a lot with your credit card
to get any rewards at all. Read the fine print carefully before signing.
Cash Back Credit Cards
Cash back credit cards give you money rewards. When you make a purchase with this

type of credit card, you get some points based on the amount of money you have spent with
your credit card. When you accumulate enough points, you get cash back. On most cards, you
can get back about 1% of your total purchases.
These cards are great for those who are budget-conscious as they give you some
money back from your purchases. However, there are several drawbacks to these types of
cards. Some cards have low cash-back percentage rates. Some charge high fees or have limits
on how much money you can get back each year. Most cards only offer you cash back
advantages on purchases - not on your balance. If you decide this card is right for you, do
compare several card offers to find the best cash back credit card option.
Airline Credit Cards
This type of card allows you to accumulate frequent flyer points on all your credit
card purchases. If you travel a lot or love to travel, this card can help you accumulate points
for a free trip or for a discount ticket. In many cases, these cards are great because they allow
you to gather points for every purchase. However, these cards can also charge high fees. In
some cases, your points will expire if you do not use them within a specified time. Worse,
some airline credit cards make use of a point system that is not very user-friendly. You may
have to slowly accumulate an enormous amount of points to qualify for a trip. If you do not
love to travel and if you do not use your Credit card a lot, then, your ability to get rewards
you like may be very limited.
Prepaid Debit Cards
These cards are sometimes called junior credit cards. They are not truly credit cards at
all, since you are not getting credit or loans from the credit card company. Instead, these
cards work by having you deposit some money into the card account. You can then use your
card to charge any amount up to the amount in the account. When you add more money, you
can
charge
more
to
your
card.0000000000000000000000000000000000
Secured Credit Cards
Secured credit cards use collateral to ensure that the card company will be paid back.
Often, these cards are used by people with no credit or bad credit. With secured credit cards,
you can enjoy credit card convenience even if you do not qualify for traditional cards.
However, you will also have to cope with the additional fees and low credit limits that these
credit cards have.
Credit Cards for Bad Credit
Bad credit credit cards are designed for people with poor credit histories. These cards
generally have very low credit limits and charge extra fees. This is because they are designed
for people who are considered far less likely to repay their debts. If you have a bad credit
rating, these types of credit cards can be a great way to rebuild your credit history. These
cards can also allow you to have credit even if you would be rejected for most other cards due
to your credit history.
Student Credit Cards
Student credit cards are cards meant to attract college and university students. These
cards often offer sign-up bonuses for students. They are also easier to apply for, since credit

card companies recognize that students have much shorter credit histories than the average
customer.000000000000
If you are a student, student credit cards can be a great option. They are simple to use
and can help you build a good credit rating before you graduate. However, there are some
disadvantages to student credit cards. These cards may have no reward programs and may
have fewer benefits, including fewer bonuses and services, than other cards.
Business Credit Cards
Business credit cards are created especially for business use. They offer many of the
same advantages as traditional credit cards, but also offer services that can really help a
business. With some business credit cards, for example, you can enjoy higher interest rates,
extra cards for business employees, monthly reports on your expenses, and services that let
you keep your personal and business expenses separate on the same card. These advantages
mean that using this card for your business is more convenient.

Types of Credit Cards offered by Indian Banks

Silver Cards
Silver credit cards rank lowest among the metal named cards, and, because of lower
prestige when compared to gold and platinum cards, are commonly known as basic and
standard credit cards. Silver credit cards come with advantages such as lower annual
membership fees if there is any, and a lower threshold salary which banks use to evaluate
your application in case you should apply.
Silver credit cards will provide you with almost the same credit limit as other cards
provided you have a good credit history. You can also avail of 0% interest balance transfer
schemes which are made available for a period of 6-9 months for silver card holders.

There are also some disadvantages to using silver credit cards. One would be the
lower cash advance limits, less rewards and promotional packages, and less travel perks
compared to gold and platinum cards. HDFC Bank, ICICI offer silver credit cards through
their HDFC Bank Silver cards and ICICI Sterling Silver credit card
Gold and Platinum Cards
Gold and platinum credit cards are a status symbol for any credit card holder, bringing
prestige since getting gold and platinum cards usually require that you have good credit rating
and a higher income levels. Gold and platinum cards offer higher limit for cash advance
withdrawals and sometimes can provide higher credit limits as compared to standard or silver
cards.
If you have a gold or platinum card, you also get better perks and privileges such as
travel insurance, extended warranties for appliance purchases and special deals on specific
products, and purchase protection insurance.
You can also engage in some loyalty schemes that are offered for gold and platinum credit
card holders which can sometimes involve cash back promos and reward points systems.
Some popular gold and platinum cards available are the American Express Gold card, and the
ICICI Solid Gold Credit Card.
It is not possible to cover them the exact offerings of these cards but I will highly
advice you to check all these websites of the banks to get all the info about the credit cards
they are offering. Also try to talk to your friends who are having credit cards to get more info.

Types of Credit
Cards offered
By
Indian Banks

Credit Card Data

Credit Card is either Visa or MasterCard which is the Most popular and in some instance
American
Express.000000000000000000000000000000
The Top 10 Credit Card Issuers in India are as follows,
ICICI
HDFC
SBI
Citibank
HSBC
ABN
Axis
Deutsche
American

Bank

Bank

Cards
-

Cards

Amro
Bank
Bank
Express

5.07
4.42
2.65
2.54
1.3
0.78
0.57
0.495
0.45

Mn
Mn
Mn
Mn
Mn
Mn
Mn
Mn
Mn

Data Courtesy - The Reserve Bank of India

Ch.5 DEBIT CARD

A debit card (also known as a bank card or check card) is a plastic card that provides
an alternative payment method to cash when making purchases. Functionally, it can be called
an electronic cheque, as the funds are withdrawn directly from either the bank account or
from the remaining balance on the card. In some cases, the cards are designed exclusively for
use on the Internet, and so there is no physical card.
In many countries the use of debit cards has become so widespread that their volume
of use has overtaken the cheque and, in some instances, cash transactions.
Like credit cards, debit cards are used widely for telephone and Internet purchases
and, unlike credit cards, the funds are transferred immediately from the bearer's bank account
instead of having the bearer pay back the money at a later date.
Debit cards may also allow for instant withdrawal of cash, acting as the ATM card for
withdrawing cash and as a cheque guarantee card. Merchants may also offer cash back
facilities to customers, where a customer can withdraw cash along with their purchase.

Types of debit card systems

Online Debit System

Online debit cards require electronic authorization of every transaction and the debits
are reflected in the users account immediately. The transaction may be additionally secured
with the personal identification number (PIN) authentication system and some online cards
require such authentication for every transaction, essentially becoming enhanced automatic
teller machine (ATM) cards. One difficulty in using online debit cards is the necessity of an
electronic authorization device at the point of sale (POS) and sometimes also a separate PIN
pad to enter the PIN, although this is becoming commonplace for all card transactions in
many countries. 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
problems with processing lag on transactions that may only issue online debit cards. Some
on-line debit systems are using the normal authentication processes of Internet banking to
provide real-time on-line debit transactions. The most notable of these are Ideal and POL.
Offline Debit System
Offline debit cards have the logos of major credit cards (e.g. Visa or MasterCard) or
major debit 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 (with payer's signature). This
type of debit card may be subject to a daily limit, and/or a maximum limit equal to the
current/checking account balance from which it draws funds. Transactions conducted with
offline debit cards require 23 days to be reflected on users account balances. In some
countries and with some banks and merchant service organizations, a "credit" or offline debit
transaction is without cost to the purchaser beyond the face 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 debit purchasers may opt to
withdraw cash in addition to the amount of the debit purchase (if the merchant supports that
functionality); also, from the merchant's standpoint, the merchant pays lower fees on online
debit transaction as compared to "credit" (offline) debit transaction.
Electronic Purse Card System
Smart-card-based electronic purse systems (in which value is stored on the card chip,
not in an externally recorded account, so that machines accepting the card need no network
connectivity) are in use throughout Europe since the mid-1990s, most notably in Germany
(Geldkarte), Austria (Quick), the Netherlands (Chipknip), Belgium and Switzerland (CASH).
In Austria and Germany, all current bank cards now include electronic purses.
Prepaid Debit Card
Prepaid debit cards, also called reload able debit cards or reload able prepaid cards,
are often used for recurring payments. The payer loads funds to the cardholder's card account.
Prepaid debit cards use either the offline debit system or the online debit system to access
these funds. Particularly for companies with a large number of payment recipients abroad,
prepaid debit cards allow the delivery of international payments without the delays and fees
associated with international checks and bank transfers. Providers include Caxton FX prepaid
cards, [Escape prepaid cards and Travelex prepaid cards. [ Whereas, web-based services such
as stock photography websites (stockpot), outsourced services (odes), and affiliate networks
(Media Whiz) have all started offering prepaid debit cards for their
contributors/freelancers/vendors.

BENEFITS & FEATURES OF DEBIT CARDS

BENEFITS OF THE DEBIT CARD

FREE WITH OUR BANK ACCOUNT

Obtaining a debit card is easy. If we qualify to open a bank account, we usually get a debit
card, if our bank offers the service.

NO BACKGROUND CHECK

When we are applying for a debit card, the ban does not need to look into our credit history.
All we need is the documentation to open a bank, account, and money in our bank when we
use our debit card.

CASH WITHDRAWALS

The customer can withdraw a minimum of Rs. 100/- and a maximum Rs.10, 000/- per day

CONVENIENCE

A Debit card fees us from carrying a lot of cash or a cheque book. In case, we are an
international traveler, we dont need to stock up on Travelers Cheques or cash. We can use
our debit card to withdraw Cash from over 500,000 ATMs around the world in over 100
countries. We can withdraw in the local currency of the country we are in, limited only by the
money we have back home in our account, and Business Travel Quota (BTQ) limit arability.

FAIR EXCHANGE

If we return merchandise or cancel services paid for with a Debit card, the transaction is
treated as if it were made with cash or a check. Customers usually get cash back for offline
purchases; for on-line transactions, the amount is credited to our account.

STATEMENT OF ACCOUNT

A statement of transactions can be obtained from the customers branch. For example, a mini
statement containing the last four transactions and balance can be obtained at a State Bank
Group during the working hours of the customers branch.

BANKING CUM SHPPING CARD

Your Debit card can be used as ATM card at any ATM across the world, as well as for making
purchase at merchant locations. You can also withdraw cash from any of the 12000 ATMs in
India.
WIDELY ACCEPTED, INTERNATIONALLY VALID

FEATURES OF DEBIT CARD

The following are features of Debit cards

A) It is a combination of a Cheque and ATM card. Therefore, there are no fees for using the
ATM for cash withdrawal, or as a debit card for purchase.
B) The Debit Card services in meant for withdrawals against the balance already available in
the designated account.
C) It is the card holders obligation to maintain sufficient balance in the designated account to
meet withdrawals and service charges.
D) A Debit card is more affordable than credit card. We just our bank account for all our
transactions. No credit period. Our bank account is debited immediately.
E) No credit check is required to get a Debit card.
F) Use of card is terminated without notice, upon the death, bankruptcy or insolvency of the
cardholder or for other valid reasons.
G) Spending is limited to our bank balance.

Process Debit Card Transactions

A successful business will usually accept debit cards as a part of their overall profile
of payment solutions. If you dont process debit cards, you may not be taking full advantage
of all the potential that your merchant account can deliver. There are essentially two ways
you can accept debit cards, online and offline.
Off line debit card transactions
An offline debit card transaction is still the way most merchants accept debit cards.

This is essentially the same as processing credit cards. You swipe your customers debit card
through a credit card terminal and have them sign the receipt.
If you choose to accept debit cards offline, be sure that the debit card has a VISA or
MasterCard logo. Otherwise, the debit card wont be approved and you wont be able to
process the debit card offline
Online debit card transactions
The most advantageous way to process debit cards is to do it online. You will still be
able to accept debit cards at the point of sale, but you will need to install a PIN pad on your
credit card terminal.
An online debit card transaction works much like a credit card transaction, except that
after your customer swipes his or her debit card, they will enter a PIN instead of signing the
receipt.
At this point the encrypted debit card information is sent to the customers bank for
authorization, and youll receive the funds just as you would for a credit card transaction.
Your business has many advantages when you accept debit cards.
For example, you pay a flat fee for each debit card transaction that you process,
instead the flat fee plus percentage rate that you are charged when you accept credit cards.
Over
time,
this
can
potentially
save
you
a
lot
of
money.
0000000000000000000000000000000000000000000000000
Another advantage when you process debit cards is that you cant be charged higher
downgrade fees.
In a credit card transaction, you are usually charged the discount rate. However,
some transactions are considered to be a higher risk or expense to the bank, and you are
charged a higher rate as a result.
But when you accept debit cards, you always pay the same flat rate, with no danger of
the rate increasing.
You can also cut down on checkout time when you accept debit cards. It takes an
average of 30 seconds to hand over the pen, wait for the customer to sign the receipt, and then
take the pen back.
If you process 20 credit card transactions a day, youre losing 100 minutes a day just
passing a pen back and forth! Thats almost two hours.

Advantages & Disadvantage

Advantages
Plastic money, unlike paper money, will not burn easily and can resist higher temperatures

than paper money.

You have no fear to be theft. And its easy to use.

Plastic money, unlike paper money, will not burn easily and can resist higher temperatures
than paper money.

Paper money also picks up dirt and stains more easily than plastic money.

Plastic money is the debit and credit cards. Plus point of plastic money is
that you won't have to carry your cash around all the time.
It also doesn't wear after time as paper does nor does it rip and tear.

Give you incentives, such as reward points, that you can redeem.

Be more convenient to carry than cash.

Provide a convenient payment method for purchases made on the Internet

and over the telephone.
Help you establish a good credit history.

Disadvantage
Cost much more than other forms of credit, such as a line of credit or a

Personal loan, if you don't pay on time.

Damage your credit rating if your payments are late;

Allow you to build up more debt than you can handle;

Have complicated terms and conditions;

It also doesn't wear after time as paper does nor does it rip and tear.

Paper money also picks up dirt and stains more easily than plastic money.

I can't really see any advantages to have paper money, unless it is cheaper to make.

Its disadvantage is that, some extra money will be deducted for the bank service

Methodology

The study sample that was selected consisted of consumers of the local markets and shopping
malls of the city of Pune. The sample was selected by the Stratified Random Sampling
Method in such a way that it consisted of consumers including students, working
professionals, government officials, house makers and senior citizens. The sample size
selected was 200. A draft questionnaire was prepared and administered to 20 people as the
part of pilot study. However, few changes were made in the questionnaire and final
questionnaire was prepared which consisted of 17 questions. Two sets of hypothesis were
also made, each consisting of a null hypothesis and an alternate hypothesis. Besides the
primary data, secondary data was collected from books, journals and internet to gather work
done by other researchers prior to the study. Appropriate statistical tools have then applied to
establish correlation among the variables and for hypothesis testing.
People prefer plastic money over paper money for their daily transactions (apparel, footwear,
electronic items etc)

COMPARISION BETWEEN HDFC BANK AND ICICI BANK

About - HDFC Bank Limited, India
The Housing Development Finance Corporation Limited (HDFC) was

amongst the first to receive an 'in-principle' approval from the Reserve Bank of
India (RBI) to set up a bank in the private sector, as part of the RBI
liberalization of the Indian Banking Industry in 1994. The bank was
incorporated in August 1994 in the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995.

Capital Structure
The Indian Private Equity Fund, Mauritius (IPEF) and Indocean Financial
Holdings Ltd., Mauritius (IFHL) (both funds advised by J P Morgan Partners,
formerly Chase Capital Partners) together hold about 5.5% of the banks
equity. Roughly 27.5% of the equity is held by FIIs, NRIs/OCBs while the

balance is widely held by about 214,000 shareholders. The shares are listed on
The Stock Exchange, Mumbai and the National Stock Exchange. The bank
American Depository Shares are listed on the New York Stock Exchange
(NYSE) under the symbol "HDB"

BOARD OF DIRECTORS

Managing director

Aditya Puri

Executive director

Paresh Sukhthankar

Executive director

Harish Engineer

Chairman

C.M Vasudev

Assets and Credit Cards

Parlay Mondal

About ICICI Bank Limited,

In 1955, The Industrial Credit and Investment Corporation of India Limited
(ICICI) was incorporated at the initiative of World Bank, the Government of

India and representatives of Indian industry, with the objective of creating a

development financial institution for providing medium-term and long-term
project financing to Indian businesses. In 1994, ICICI established Banking
Corporation as a banking subsidiary. Formerly known as Industrial Credit and

Investment Corporation of India, ICICI Banking Corporation was later

renamed as;ICICI Bank Limited;

Capital structure
ICICI Bank is Indias second-largest bank with total assets billion (US$ 108.7
billion) at March 31, 2010.
ICICI Banks equity shares are listed in India on Bombay Stock Exchange and
the National Stock Exchange of India Limited and its American Depositary
Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

BOARD OF DIRECTORS

Managing director and Chief Executive

Chanda kochhar

Officer
Deputy Managing director

Sandeep Bakhshi

Executive director

N.S Kannan

CREDIT CARDS OF HDFC BANK

CREDIT CARD: HDFC bank credit cards provide a facility of easy availability of cash and

convenience to the cardholder.

TYPES OF CREDIT CARDS OF HDFC BANk

CLASSIC CARDS

Silver Credit Card

Value plus Credit Card

Health plus Credit Card

Gold Credit Card

Titanium Credit Card

CREDIT CARDS OF ICICI BANK

CREDIT CARDS

ICICI Bank Credit Cards give you the facility of cash, convenience and a range of benefits,
anywhere in the world. These benefits range from life time free cards, Insurance benefits,
global emergency assistance service, discounts, utility payments, travel discounts and much
more.

TYPES OF CARDS

Premium Cards

Classic Cards

Value for Money Cards

Co Branded Cards

Affinity Cards

EMI Card

Whos the banking king? ICICI or HDFC?

Their offices reflect their attitudes. ICICI Bank's headquarters in suburban Mumbai is a
huge, imposing edifice in glass and granite. HDFC Banks office in central Mumbai
is comparatively smaller and more sedately furnished.The two banks have carried
forward their style statement in their approach to business. ICICI Bank thinks big, is
all for growth and hungry for market share.HDFC Bank is more conservative and
cautious, grows at a measured pace, without taking any undue risks.ICICI Bank began
its retail banking venture in mid-1999. By January 2000, it had moved on to

introducing home loans, car loans, personal loans and credit cards.Realising the need
for a bigger retail deposit base, the bank started building a branch and an ATM
network. The acquisition of Bank of Madura in March 2001 added 263 branches,
many of them in cities where ICICI Bank did not have a presence.The merger of the
erstwhile financial institution ICICI Limited with the bank in April 2002, gave it a
ready-made corporate clientele. The flip side was that ICICI Bank had Rs 10,000
crore (Rs 100 billion) of restructured assets for which it had to make provisions.
On the other hand, HDFC Bank kick started its operations in 1995 with a focus on
corporate banking, targeting the top-end of the market. Reminisces Paresh
Sukthankar, head, credit and market risk, HDFC Bank, "Although the asset yields may
have been lower, we were able to cross-sell products so that the overall returns
were better. We may have grown slower than our peers, but the risks were lower.

HDFC Bank ventured into retail lending in 1998, a year before ICICI Bank. But in
products like credit cards, it was slow to get off the mark. For instance, its credit cards
were launched only two years ago.
By then ICICI Bank had been present in the credit card business for nearly three

years. According to some industry experts, growth for ICICI Bank may have come at
the cost of quality.

BETTER PICK UP

Share of The Wallet

Mar-2010

HDFC Bank

ICICI Bank

Branches

1725

2016

ATMs

4232

5219

Cities

789

932

Total Assets (USD)

39.723

108.7

Revenue (Rs Crore)

20666

59999

Credit Cards (Mn)

2.6

5.14

Customers (Mn)

12

24

Profit (crore)

3032

4843

ICICI Bank has issued 5.14 million credit cards -- that is more than twice the number of

HDFC Bank credit card users. However, industry observers point out that ICICI Bank
effective users for credit cards may not be high.
However, consultants believe that HDFC Bank could have leveraged its parent's
customers far more effectively to cross-sell products and grow faster.
Says a banking consultant, "While HDFC Bank has about two years to get ready for the
future, ICICI Bank probably has three years." Should HDFC Bank and its parent be
merged,it could catapult them to a new league.
But round one of the banking sweepstakes has clearly gone to ICICI Bank.
Calling the customer
Both players targeted the same customer -- the upper-middle class. The marketing
channels used by both, including direct sales agents

SIGNIFICANCE OF STUDY
As day by day competition is increasing in the market, all the business bodies wish
to keep credit card or debit card to influence their business field. A person
necessary to accept several business policies for flourishes their business in the
whole world and makes their profit. Many retailers are preferred to use credit
machines for giving full support of monetary transactions. There are many reasons
to choose credit card or debit card of common people for money transactions
instead of carrying hard cash. Credit card or debit card playing a vital role in
todays world among the common people. To carry a hard cash in everywhere is
much difficult task for the general people. Thus they always go for the card .using
card is secure and safety to use at anyplace like business field, purchasing articles
and also during online shopping is safer to use card.
In this fast world the business owners like to install credit card machines help
their business is booming in the market make transaction easier and increase their
sales at the same time. To keep the business on in the market all the business
owner wants to the see the credit card machine in their business field for fast
processing. Customer also give the first preference to that shop which provide
credit card processing services as they believe that is the safe and secure way to
save your money. Retailers know this importance, so they begin to give this facility
to the customer for their best support. Those who have credit card take really too

much less time for any transaction. But one of the best thing of using credit card
give full merits while go for the shopping it just free from hassle.
Credit card is helpful to the those people who have no habits to carry enough cash
all the time to buy some product as the facility given to them may payment later
by using this card. Nowadays most of the people go online shopping. Online
shopping is less time consuming and u can get everything at your doorstep means
at their house. Thus you no need to spend more time in the outside for the search
for anything. Every knows that the credit is the best means for online transaction
and the people who like to begin an online business should install credit card
machines to avoid such problem. But if you want to start online business they
should be holder of merchant account otherwise this business is not possible to
continue. Anyone wants to make merchant account they can get information from
any merchant services. They have your way for opening of merchant account and
give guidance for this at the same time. Different kind of credit card machines
available in the market and these machines utilize for many purpose. To install this
machine you contact with a reputed merchants service provider.
Thinking of opening a business of your own but doesnt have enough funds!! No
problem. PowerPayServices.com will solve your problem. It will allow the
merchants to accept credit cards at low cost. It is the correct time to have your
account there before the prices rise high.
Acceptance of credit card may increase the profit rate of the business. To get a
maximum profit from business you have to select reputed company. If anyone has
merchants account with reputed service provider they can draw large number of
costumer. Before making merchants must read all terms and condition carefully.

SCOPE OF THE STUDY

ATM cards are slowly being transformed into value-added debit cards. Bankers and analysts
see tremendous scope for growth in debit cards. "There is tremendous potential for debit
cards. It will soon be substituting cheques. Utility payments will soon be made through debit
cards, either at the ATMs or at the counters. The debit card can be used to withdraw cash
from ATMs of other banks depending on whether the debit card-maker has a Visa or a
Maestro tie-up. Visa and MasterCard both confirmed yesterday that they had been notified of
the breach and had in turn notified several banks and credit card companies of the potential
data compromise. They declined to say how many companies have been notified. Credit cards
As well as convenient, accessible credit; credit cards offer consumers an easy way to track
expenses, which is necessary for both monitoring personal expenditures and the tracking of
work-related expenses for taxation and reimbursement purposes.

Review of Literature

Subhani in 2011 conducted a study on Plastic Money/Credit Cards Charisma for Now and
Then. The study was based to find out the charisma of plastic money, its usability and
affordability and its impact on its preference to use. The research found that the preference to
use of plastic money/ credit card has its pros and cons with its usability and affordability.

According to the consumer behaviour, plastic money is a form of conditioning and acts as a
stimulus which qualifies a consumer to spend. The study shows that the preference to go for
plastic money has a positive association with the easy use of plastic money because the
precept of credit card usability is linked with a psychological phenomena that people are
likely to spend less with credit card and spend more with the same amount of cash on hand in
the same budget and this precept also linked with the consumer self convenience, i.e.

convenience and easy use which delves into spending.

Loewenstein and Hafalir in 2012 conducted a study on The Impact of Credit Cards on
Spending. The study focused on two types of customers, revolvers (who carry debt) and
convenience users (who do not carry debt), and measured the impact of payment with credit
card as compared with cash by an insurance company employees spending on lunch in a
cafeteria. It was found that there was change in the diners payment medium from cash to a
credit card when an incentive to pay with a credit card was given. It was then found out that
credit cards do not increase spending. However, the use of credit cards has a differential
impact on spending for revolvers and convenience users. Revolvers spend less when induced
to spend with a credit card, whereas convenience users display the opposite pattern.

DATA Analysis

Table 1: Type of card possessed by respondents

SR.NO

Parameters

Percentage

Debit Card

59%

Credit Card

16%

Both

21%

None

4%

From table 1, it can be seen that majority of respondents use plastic money in the form of
debit card. However, some use both debit and credit cards. The preference of the specified
card makes a great amount of impact on the spending patterns of various consumers. The
preference of debit cards over credit card marks a strong sense of favouritism among the
respondents of India , which is far different as compared to other western countries where
Credit card is a primary mode of payment.
Most Beneficial medium of money transaction according to Respondents
Figure 1: Most beneficial medium of transaction

Sales

Debit card

26%

Neither of them
49%

Credit card
Both of them

21%
4%

According to figure 1, majority of respondents prefer using Debit card over Credit card as
they feel that the use of Debit card is more beneficial than Credit card in terms of cash back
policy, control over spending and security. However some of are the opinion that both Debit
and Credit cards have their own benefits. One must see that the parameter of beneficial varies
from person to person. However majority find the feature of cash back facility effective, and
as the trend continues the financial institutions would get a balanced end of the year balance
sheet as their debtors would be lesser than their creditors. The Debit cards give a feeling of
security amongst the uses as they dont lead to development of any liability for the users at a
later date.

Table 2: Benefits of the Debit/Credit cards according to respondents

SNO

Parameters

Strongly

Agree

Agree
1

Convenienc

Satisfactor

Disagree

Strongly
disagree

53

12

21

e
2

Secuirity

18

23

45

12

No

12

23

52

32

31

20

47

30

16

transaction
cost
4

Accessibilit
y

Probability

From table 2, it can be seen that majority of respondents strongly agree to the fact that plastic
money is convenient, easily accessible and very portable. However around some of the
respondents completely disagree to the secure and no transaction cost nature of the Debit/

Credit cards. The major preference of debit card is mainly due to the convenience and easy
portability. However the high transaction or charges of using the plastic money leads to more
of cash payments. Some banks have a cost as high as upto 10%. Such high rates when billed
with the transaction amount spend leads to a big hole in the pockets of consumers thus their
preference of debit card is justified completely.
Purpose of usage of card according to respondents

Figure 2: Purpose of usage of card

Purpose Of Usage Of Card

Apparel
Electricity bill/ phone bill
Banking
Consumer Durable
Electronic
Investment
jwelleries
Online transactions

From figure 2, it can be seen that majority of respondents prefer using plastic money for
buying apparels, paying electricity bills/phone bills and for online transactions. These are all

day to day transactions that require more than the average cash payments. Use of Debit cards
is convenient as they can be swiped anywhere with ease and the deduction from respective
bank account happens immediately unlike the credit cards where a swipe generates a future
liability of payment for the customer. The easy access to internet and site like Jabong, Myntra
and Amazon has led to the rise in apparel online shopping of the card users. However, they
do not use plastic money much for investment purposes which includes trading of securities
on stock exchanges, purchase of bonds/ debentures, purchase of jewellery etc. The reasons
may be varying but the behaviour is common among maximum respondents.
Figure 3: Problems perceived by the respondents on possession of Plastic money

120
100

5
34

80
60

53
28

40
28
20strongly agree
12
3
0

20
agree
18
0

41

23
32

22
5
20
satisfactory
12

5
16
disagree
24

Strongly disagree
0

However there are certain problems faced by the respondents while using their respective

cards. It can be seen from the figure that majority of respondents strongly agree to the fact
that the basic problem involving plastic money is fear among consumers of losing card and
High unnecessary formalities. On analysis it was found that the respondents find these
unnecessary formalities used by banks in order to issue a card a big demotivating factor. The

lack of many security measures to ensure safety of respondents bank account also acts as a
stimulus to the demotivation. Moreover the high processing fee leads to the problem of
excess burden for the customers because they have to pay a price to owe a card and pay
interest on using it to.

RECOMMENDATION

ICICI Bank and HDFC bank has to improve its brand image, i.e. it has to position
itself in the minds of prospects in a better way in comparisons to others.

 It should provide better career opportunities for the retention of its potential
advisors.

People who deal with customers should have complete knowledge about the
different products and their features.

It should more emphasize in advertising, as it is the most powerful tool to

position ant brand in the mindsets of customers.

It should provide online training and for those who are in jobs and want to
become advisors ICICI should provide evening training classes, so that they can
join the training after doing there jobs.

CONCLUSION
21ST Century banking has become wholly customer-driven & technology driven
by challenges of competition, rising customer expectations & shrinking margins, banks have
been using technology to reduce cost & enhance efficiency, productivity & customer
convenienence. Technology intensive delivery channels like net banking, mobile banking, etc
have created a win-win situation by extending great convenienence. & multiple options for
customer.
From educating customers about credit cards there is a need to educate them about the

differentiating factors of the cards. Because visa and master card are advertising regularly
and thereby increases awareness. The strategy should be to emphasize on its differentiating
characteristics.
They also need to identify potential customers and target those using mailers. As internet is
growing at a fast rate the net users can be targeted by having interactive sites. The
prospective companys card personality could also be used in the home page to solve
customer queries in the Best Possible Manner

ANNEXURE
Questionnaire on Relevance of plastic money

Basic information

1) Name: ______________________________________

2) Address: ____________________________________

3) Contact number: _____________________________

4) Gender :

Male

Female

5) Age:

18-25

25-35

 35-50

6) Profession:

above 50 yrs

student Business service

Government Employee other, specify___________

7) Annual income

8) Martial status

0- 180,000 Rs

180,000- 300,000 Rs

300,000- 500,000 Rs

above 500,000 Rs

single

9) No of family members up to 4

married

4- 6

above 6

Please Tick ( ) in the box given below the questions to answer :-

Q1.Idea about plastic money? Which?

Credit card

Debit card

ATM card

others

Q2.Do you have?

Credit card

Debit card

ATM Card

Specific Outlet card

Q3. According to you, which is the most convenient way to pay?

Cash
both

card
NO comments

Q4. How do you prefer to pay your utilities Bills?

Cash

Card

ECS

Cheque

DD

Others

Q5. How do you make payment for purchases of household consumables?

Cash

Card

Cheque

ECS

Q6. How do you make payment for purchases of luxury and Durable goods?

Cash

Card

Cheque

ECS

Q7. While travelling, According to you which is the preferred way of payment?

Cash
Cheque

Card

Travelers cheques

DD

Q8. Do you find use of credit card/Plastic money to be safest modes of transaction?

Yes

No

No comments

Q9. Why you do not prefer plastic money?

Instable income

lack of knowledge

Malpractices by outlet owners

Mal practices by Bankers

Lack of Trust Misuse by other

Q10. Why you do not prefer Paper money?

Fear of Theft

Increasing Duplicity

Wear And Tear of paper money

Bibliography

Books
Marketing Management (10 Edition), Philip Kotler
Research Methodology (2nd Edition), C.R. Kothari

www.google.com
www.hdfc.com
www.icici.com