Plastic money and digital cash sept 2012 abbl card info


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This lecture was delivered in a Training Course of BIBM, Mirpur-2, Dhaka.

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Plastic money and digital cash sept 2012 abbl card info

  1. 1. Digital Cash/Plastic Money and Electronic Payment System Presented by– by Md. Shihab Uddin Khan BS (Hons), Applied Physics and Electronics, MS (Computer Science), DU Associate Professor, Bangladesh Institute of Bank Management (BIBM) Phone: 01556354558, E-mail:,
  2. 2. What is Payment Systems? Payment Systems :  a payment system consists of a set of instruments, banking procedures and, typically, interbank funds transfer systems that ensure the circulation of money.  Payment systems responsible for smooth transfer of money. Financial institutions accept, collect, and process a variety of payment instruments, and participate in clearing and settlement processes.  In some cases financial institutions perform all of these tasks, but increasingly, independent third parties play an important role in payment systems operation.2 24/01/2012 2
  3. 3. Definition of EPS:Electronic Payment is a financial exchange thattakes place online between buyers and sellers.The content of this exchange is usually someform of digital financial instrument (such asencrypted credit card numbers, electroniccheques or digital cash) that is backed by a bankor an intermediary, or by a legal tender. Slide 6-3
  4. 4. The various factors that have lead the financialinstitutions to make use of electronic payments are: Decreasing technology cost: The technology used in the networks is decreasing day by day, which is evident from the fact that computers are now dirt-cheap and Internet is becoming free almost everywhere in the world. Reduced operational and processing cost: Due to reduced technology cost the processing cost of various commerce activities becomes very less. A very simple reason to prove this is the fact that in electronic transactions we save both paper and time. Increasing online commerce: The above two factors have lead many institutions to go online and many others are following them. Slide 6-4
  5. 5. Affecting the consumers:Credit cards, Debit Cards, ATMs (Automated TellerMachines), Stored value cards, E-Banking.Enabling online commerce: Digital Cash, E-Cash, Smart cards (or Electronic Purse)and encrypted Credit cards.Affecting Companies:The payment mechanisms that a bank provides to acompany have changed drastically. The Company cannow directly deposit money into its employee’s bankaccount. These transfers are done through AutomatedTransfer Houses. Slide 6-5
  6. 6. Problems with the traditional payment systems:There are also many problems with the traditional paymentsystems that are leading to its fade out. Some of them areenumerated below:Lack of Convenience: Traditional payment systems require the consumer toeither send paper cheques by snail-mail or require him/her tophysically come over and sign papers before performing atransaction. This may lead to annoying circumstancessometimes.Lack of Security: This is because the consumer has to send all confidentialdata on a paper, which is not encrypted, that too by postwhere it may be read by anyone. Slide 6-6
  7. 7. Lack of Coverage: When we talk in terms of current businesses, they spanmany countries or states. These business houses need fastertransactions everywhere. This is not possible without the bankhaving branch near all of the companies offices. Thisstatement is self-explanatory.Lack of Eligibility: Not all potential buyers may have a bank account.Lack of support for micro-transactions:Many transactions done on the Internet are of very low costthough they involve data flow between two entities in twocountries. The same if done on paper may not be feasible atall. Slide 6-7
  8. 8. Types of Payment Systems: Manual / Paper base PS:  Cash  Cheque/Checking Transfer Electronic Payment System:  E-cash/Digital cash  Credit Card  Stored Value (Pre-paid card)  Debit Card  Accumulating Balance Payment Slide 6-8
  9. 9. Another Classification of Payment Systems  High Value Payment Systems (>=5 Lac Taka)  Real Time Gross Settlement (RTGS) Systems  Regular Value/Retail Payment Systems  Cheque Clearing System  Electronic Funds transfer  ATM/POS Transaction  Internet Payments  Mobile payments9 24/01/2012 9
  10. 10. Digital Cash Digital cash is (also known as e-currency, e-money,electronic cash, electronic currency, digital money, digitalcurrency, cyber currency) refers to money or script which isonly exchanged electronically. Typically, this involves the use of computer networks, theinternet and digital stored value systems. EFT, direct deposit, digital gold currency and virtualcurrency are all examples of electronic money. It is a collective term for financial cryptography andtechnologies enabling it.
  11. 11. Digital Cash A system that allows a person to pay for goods orservices by transmitting a number from one computer toanother. Like the serial numbers on real dollar bills, the digitalcash numbers are unique. Each one is issued by a bank and represents a specifiedsum of real money. One of the key features of digital cash is that, like realcash, it is anonymous and reusable. Digital cash certificate can be reused.
  12. 12. Digital Cash Most digital cash systems start with a participatingbank that issues cash numbers or other uniqueidentifiers that carry a given value, such as five dollars. To obtain such a certificate, you must have anaccount at the bank; when you purchase digital cashcertificates, the money is withdrawn from your account. For large purchases, the vendor can check the validityof a cash number by contacting the issuing bank.
  13. 13. Digital Cash
  14. 14. Digicash: How First Generation Digital Cash Worked
  15. 15. What is Plastic Money ? Plastic money are the alternative to the cashor the standard ‘Money. Plastic money consists of plastic cards onwhich information about ones bank account isencoded, allowing you to make transactionsinstead of using cash or cheque. Plastic money is the generic term for all typesof bank cards - credit cards, debit cards, smartcards, etc
  16. 16. Today it is already impossible to imagine modern bankoperations, commercial transactions and other paymentswithout using the plastic cards. Plastic money due toreliability, universality and convenience, which won thedeserved recognition all over the world, have received awide circulation.Approximately 90% of adults hold one or morecards in UK and USA.Visa cards holders number makes more than 300 million.Also, about 300 million clients are totaled by otherlargest payment system presented as MasterCard andEuro Card alliance.
  17. 17. Benefits of Plastic MoneyFrom Customer’s point of view: From Merchant’s point of view: Carrying less cash is safer for  Increased Sales the customers.  Customer Satisfaction In case of Debit Card, a PIN  Speed of Checkout Number ensures secure access  Improved Efficiency to their checking accounts.  Safety The customers wont be limited  Currency Conversion (Using to cash on hand with the use of the Plastic cards. And they wont Int. Credit Card)  Reduced processing & need to remember to carry cheques / cash. collection cost Lesser the checkout lines & faster money transaction with their Plastic cards. There is less change to be made and no cheques to write and approve.
  18. 18. Benefits of Issuer / Acquirer • Interest Income (60%) • Annual Card Fee (14%) • Late Payment Charges (1%) • Foreign Exchange Income (1%) • Cash Withdrawal Fee (2%) • Interchange Fee/Income (17%) [Paid by Acquirer/Merchant’s bank to Issuer/Card holder’s bank] • Others Income (Merchant’s service charge paid to Acquirer etc.)- (5%)** In POS terminal services, merchant pays 1.5% to 3% chargesper transaction (payment for each shopping/purchase) to the cardissuer. ** An issuer (Bank) of debit cards get the benefits of significant increases in money deposit (Increase number of depositors).
  19. 19. What are the disadvantages of having a credit/debit card? The disadvantages with the Credit Cards are that if it is stolen it can be used to buys goods to which the holder may be held liable if the theft is not reported. You will have to pay interest and a late fee if you are late on your monthly payment and you will also have to pay an annual fee and a fee if you go over your credit limit. For the Debit Card you need discipline to avoid spending money on items you would have though twice about if you had actual cash in your pocket. Also if you use the card at machines other than the ones belonging to your financial institution, you will be charged a higher fee.
  20. 20. Types of Plastic Money:According to Payment According to PaymentService /Amount Limit- system or Card Association- Credit Card  VISA  MasterCard Debit Card  American Express (AMEX) Pre-paid Card  EuroCard ATM Card  Diners Club (DC) Charge Card  Novus  Mondex Smart Card  JCB (Dominate in Japan)
  21. 21. Types of Plastic Money:Other Types: Proprietary Card Card Types based on Technology: Branded Card [VISA, NOVUS etc.]  Magnetic Strip CardOther Card Types  Chip / Microprocessor Business Card Card / Smart Card Corporate Card Fuel or Fleet Cards Gift Card Purchasing Card Store Card Power Card
  22. 22. TYPES OF PLASTIC MONEYAccording to ATM Card Services in Bangladesh - Q-Cash (12 member banks: EBL, NBL, SJIBL etc.) IT Consultants Ltd operates Q-Cash ATM services. E-Cash (8 member banks:. Agrani, Bank Asia, Dhaka Bank, IBBL, SIBL, SEBL, State Bank of India and AB Bank)- E-Cash is owned by United Group and maintained by Electronic Transactions Network Ltd (ETN). Ready Cash (Micro-processor chip Debit Card): American International Investment (AII) /American International (BD) Ltd is the service provider of this card services. Member banks are Basic bank, Janata, Agrani, Dhaka Bank, MBL etc.
  23. 23. Card Services in Bangladesh Both Magnetic card and Chip base card are used in Bangladesh. VISA Credit Card Types used in POS & ATM - - Normal Classic (Use local currency, BDT & Lower limit) - Normal Gold (Use local currency, BDT & Higher limit) - Dual Currency Classic (Use BDT & US Dollar, Lower Limit) - Dual Currency Gold (Use BDT & US Dollar, Higher Limit)
  24. 24. Different Plastic Cards services of a bank VISA Prepaid (Prepaid Card – Local) VISA Prepaid (Prepaid Card – International) VISA Prepaid (Prepaid Card – Dual) Souvenir Card (Gift Card – Local) VISA Debit Card (Classic, Silver and Gold) Debit Card with Credit Facility VISA Credit Card – (Classic, Silver, Gold) VISA Credit Card – (Local, International) VISA Credit Card – Local Currency VISA Credit Card – Dual Currency
  25. 25. Cont.. Credit card service type- - Online (Currently Used) - Offline (Currently not used) Credit facility in Debit cards of DBBL- - Gold (Credit limit is Tk. 20 lacs) - Silver (Credit limit is Tk. 50 thousands) - Classic (No credit limit)
  26. 26. NBL Power Card is the first debit card for which you dont have to maintain any account with our any branch.Benefits It is a Pre-paid Card. Annual / Renewal Free Tk. 200/- only. May be issued and refilled from RFCD/FC Account. Accepted at all VISA POS merchants. Cash withdrawl at all ATM booths bearing VISA and Q-cash logo(Except HSBC in Bangladesh). Drawing of Cash : (i) from NBL ATMs - Free of charges (ii) From ATMs under Q-cash network- Tk.10.00 per transaction (iii) From other ATM - Tk. 100.00 per transaction. Cash Withdrawl Fee(aboard)-2.00% on the cash drawn amount or US$2.00, whichever is higher. Only 1% loading fee against both International and Local Power Card at the time of Refilling. Yearly Tk.100 for enrollment of SMS service.
  27. 27. EBL LifeStyle Card (Pre-paid Card) "EBL Campus" its another brilliant offering- a solid,internationally branded prepaid card that suits the lifestyle of students.The best way to not only make a fashion statement, but also to controlyour spending all in style. Reload and use only when you need to.Features: A global branded VISA prepaid card Reloadable Round the clock access to large ATM network (over 85 Q-cash & VISA ATMs within Bangladesh) and a large network of POS terminals at different shops Discount on purchases available from many retail shops/outlets Having a bank account with EBL is not required Minimum age: 18 years
  28. 28. What is it?EBL Travel Card is a prepaid Visa card available over the counter to both EBL and non-EBL customers. It has been specially designed to give you more convenient access to your own money – in the USD – while youre traveling.Purchase an EBL Travel Card and you can have your foreign exchange ready to use anywhere outside Bangladesh, you will no longer need to worry about running after money exchange houses while you are abroad.Its a Visa Card, which means it is accepted at over 24 million locations worldwide – including shops, car rental companies, travel agents and ATMs.ConvenienceThe EBL Travel Card is easy to purchase as no bank account or credit check is required. You dont even need to be an EBL customer to buy one. All you have to do is fill up the Application form, provide a copy of your passport and get the amount endorsed from EBL.
  29. 29. are the benefits of the EBL Travel Card?1.Its prepaid – load a maximum of $ 3,000 for Non-SAARC countries and $ 1,000for SAARC countries & Myanmar. The amount is determined by Bangladesh Bank fora calendar year. World wide ATM access to withdraw cash (75% of the loadedamount) in local currency through any Visa-enabled ATM.02. No transaction fee for purchases03. Accepted electronically at over 24 million locations worldwide04. Privilege of a backup card to be safe against lost or theft of your primary card05. PIN-protected for your security06. Roaming cell phone bill payment facility07. Reloadable in Bangladesh against remaining individual travel quota08. 24-hour access to your balance and transaction history through EBL Cards Center (+88 044 7670 1031-34)
  30. 30. are the limits and how much I can have on the card? Minimum initial purchase $ 50 of value $ 3,000 for Non SAARC Countries Limit $ 1,000 for SAARC Countries & Myanmar 24 hour ATM Cash 75% of the loaded amount in withdrawal limit maximum 8 transactions per day 24 hour purchase 100% of the loaded amount in transaction limit maximum 12 transactions per day
  31. 31. To provide EBL Visa Platinum cardholders with the highest levels ofservice and product delivery, we offer products and services ofpremium quality to ensure customer satisfaction at the optimumlevel.Maximum Credit LimitEBL Visa Platinum cardholders are our top priority customers with highincome levels, it is imperative that the credit limit supports the premiumpositioning of EBL Visa Platinum by providing maximum purchasing power tothese cardholders. In keeping with the needs of this segment, EBL VisaPlatinum cards are offered at a maximum credit limit of BDT 500,000 or asguided by the Central Bank. This maximum credit limit may be convertedinto USD or local currencies using the market exchange rate and localpurchasing power.Lower Interest RateEBL Visa Platinum cardholders are the privileged ones and so is the interestrate. All your purchases are charged at 2.17% per month where a regularcard is charged at 2.5% per month. This gives you to spend more with lowercost.
  32. 32. ABBL VISA Debit Card ServicesCard Activation • After receiving the card, sign the acknowledgementslip and send it to Card Division or any branch of ABBL or call Card Division for activation. • Put your signature on the signature panel at the backof your card.Caution during making transactions • Please do not let your card be taken out of your sight atany merchant outlet to prevent possible Misuse • After using your card at a merchant outlet, please ensurethat the card returned to you is yours • Before signing the Sales Slip check at the amount charged • Retain your copy of the Sales Slip of all transactions untilthey appear in your Card Account Statement for your futurereference
  33. 33. ABBL VISA Debit Card ServicesPIN Maintenance • Destroy the PIN mailer after memorizing your PIN • Do not write the PIN on the card or keep the PIN inside yourwallet • Change the PIN every monthHighest Cash Withdrawal FacilitySilver Debit Card comes with per day Tk. 30,000/- cashwithdrawal facility. However, upon request you can draw up toTk. 80,000/- per day. White Debit Card comes with per day Tk.20,000/- cash withdrawal facility. However, upon request youcan draw up to Tk. 60,000/- per day. For enhanced amount ofcash withdrawal, you need to contact AB Bank Branches or ourCustomer Care Center. To avail this facility you need to fill upcash withdrawal limit enhancement form.
  34. 34. ABBL VISA Debit Card ServicesHighest Purchase LimitAt Branch POS, Silver cardholder can withdraw BDT 300,000/-and White cardholder can withdraw BDT 200,000/- per day. AtMerchant POS, Retail purchase limit is BDT 200,000/- per dayfor Silver Debit Card and BDT 100,000/- per day for WhiteDebit Card.For Lost/Stolen CardFor lost Debit / Credit Card please email to the followingaddress: or call our Card Divisionat +88 01199 222265. Your card will be replaced within 4-5working days, and will be couriered to your mailing addressyou provided in your card application form.
  35. 35. Technology related to Plastic Card:Plastic card is a plate with standard dimensions (85.6 mm. x 53.9 mm. x 0.76 mm.) produced from special, mechanic- and thermo-resistant type of plastic used to store information. Magnetic Strip and Micro Chip As electronic data media, the cards are divided into magnetic strip cards and integrated chip (microprocessor) cards. The first ones are called magnetic cards, the other ones are smart cards, or chip cards.
  36. 36. Benefits of Chip Card Higher Memory / Storage Capacity More Secured More Reliable Biometric Security Information can be stored Less vulnerable to fraud PIN is not required
  37. 37. Standard features on a plasticcard
  38. 38. A diagram showing the front side of a typical credit/debit card.(1) is the bank logo.(2) is the EMV chip (commonly referred to as Chip And Pin)(3) is the Hologram(4) is the 16 digit card number(5) is the logo of the card type(6) is the expiry date(7) is the name of the cardholder
  39. 39. A diagram showing the reverse side of a typical credit/debit card.(1) is the magnetic stripe.(2) is the signature strip(3) is the CVC2 code
  40. 40. Standard features on a plastic card
  41. 41. Process of Online Payment by Credit Cards
  42. 42. Processing a Payment CardTransaction
  43. 43. Mondex Smart Card Mondex is a smart card that holds and dispenses electronic cash. Mondex requires special equipment such as card reader to process. Containing a microcomputer chip, Mondex cards can accept electronic cash directly from a user’s bank account. 48
  44. 44. 49
  45. 45. Digital Payment Systems and the Wireless Web Mobile payment (m-payments) systems not very well established yet in U.S, but with growth in Wi-Fi and 3G cellular phone systems, this is beginning to change Example: Qpass, AT&T and Wayport venture to provide mobile payment and billing called GoPort Gartner predicts m-payments worldwide will total more than several trillion USD by 2012; majority of transactions will be micro-m-payments
  46. 46. Insight on Technology: WirelessPayments Follow Wi-Fi and Cellular Growth In Europe, already a number of phone-based transaction systems In U.S., development of Wi-Fi and Bluetooth expected to drive growth Prerequisites:  Development of the technology  Technology must become widely available  Technology needs backing of most of major stakeholders Challenge: Getting all the players to agree on a common secure platform for wireless e- commerce payment systems