Plastic money refers to credit cards, debit cards, cash cards, and prepaid cards that are used in place of cash. The document discusses how plastic money impacts the speed of economic activities. It provides details on the different types of plastic money and how rising card payments can drive economic growth. Specifically, it states that increased card usage contributed to a 0.8% increase in GDP in emerging markets and 0.3% in developed markets between 2008-2012. The value of electronic payments includes potential higher tax revenue, lower cash handling costs, and greater financial inclusion.

1. The plastic money in the
economy and its impact on
the speed in economic
activities
Presented By:
Nirbhik Jangid

2. What is plastic money?
Plastic money is a term that is
used predominantly in reference
to the hard plastic cards we use
everyday in place of actual bank
notes. They can come in many
different forms such as cash
cards, credit cards, debit cards,
pre-paid cash cards and store
cards.

3. Types of Plastic Money
Debit
Cards
Credit
Cards
Cash
Cards
Prepaid Cash
Cards

4. Cash cards:
• Allows you to
withdraw money
directly from your
bank via ATM.
• But it will not
allow the holder
to purchase
anything directly
with it.
Credit cards:
• It permits the card
holder to
withdraw cash
from an ATM and
allows the user to
purchase goods
and services
directly.
• But, unlike a cash
card the money is
basically a high
interest loan to the
card holder.
Debit cards:
• This type of card
will directly debit
money from your
bank account
and can be used
to purchase
goods and
services.
• If an overdraft
facility is available
then the limit will
be to the extent of
the overdraft.
Prepaid
cash cards:
• As the name
suggest, the user
will add credit to
the card
themselves and
will not exceed
that amount.

5. Economy
 The state of a country or region
in terms of the production and
consumption of goods and
services and the supply of
money .
 Careful management of
available resources.

6. Economic Cycle

7. Impact of electronic payment
on economic growth
Rising card payments drive economic
growth
Value derived from the migration to
electronic payment
Card penetration
The macroeconomic impact of card usage
The value of card payment

8. Rising card payments drive
economic growth
 Global economic growth - $983B (2008–2012)
 Electronic payment contributed to
Emerging markets - 0.8% increase in GDP
Developed markets - 0.3% increase in GDP
 Card growth boosts recovery - Global real GDP was
only 1.8% per annum (2008–2012); without increased
card usage, that growth would have been 1.6%

9. Value derived from the migration
to electronic payment
 Higher potential tax revenue.
 Lower cash handling cost.
 Guaranteed payment for merchants.
 A reduction in the gray economy due to lower
unreported cash transaction.
 Greater financial inclusion.

10. Card penetration

11. The macroeconomic impact
of card usage
 The card usage in 2008 was 27.4% which has
drastically increased to 32.8% in 2012.
 Private consumption.
 Card penetration as a percent of total PCE.
 The growth of card usage.
 GDP growth due to card usage.

12. Global Total Non-Cash Transaction Volumes
2008, 2011 and 2015 (Millions)

13. The contribution of Increased
Card Usage to GDP (2008-2012)

14. Alternative Payment Share :
Major Markets

15. Smaller Markets

16. The value of card payment
 Less friction more efficiency.
 Card benefits all parties (consumer, merchant, bank ).
 Security.
 Convenience.
 Transparency.

17. Reference
 Facts are collected from
 Moody’s Analytics report covering 2008-2012
 RBI, Mint Research
 Nielsen - IS THE SWIPE REPLACING THE CHA-CHING AT THE CASH
REGISTER?
 ROI Payments

18. You would love this.
• Internet usage
Worldwide, 2015
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19. Nirbhik Jangid
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