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A PROJECT REPORT ON
A STUDY OF FACTORS INFLUENCING CONSUMER BEHAVIOR
TOWARDS USE OF PLASTIC MONEY
SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR
MASTER OF MANAGEMENT STUDIES
TO
UNIVERSITY OF MUMBAI
BY
NIKHIL D’SOUZA
ROLL NO. 2014035
2014-2016
UNDER THE GUIDANCE OF DR. GOWRI SHANKAR
LALA LAJPATRAI INSTITUTE OF MANAGEMENTMAHALAXMI,
MUMBAI – 400 034
DECLARATION
I hereby declare that this dissertation submitted in partial fulfillment of the
requirement for the award of MASTER OF MANAGEMENT STUDIES (MMS)
of the University of Mumbai is my original work and has not been submitted for
award of any other degree or diploma fellowship or other similar title or prizes.
I further certify that I have no objection and grant the rights to LLIM to publish any
chapter or project if they deem fit in journals or magazines and newspaper etc.
without my permission.
NAME: NIKHIL D’SOUZA
CLASS: MMS II SEM IV
BATCH: 2014-2016
ROLL NO.: 2014035
DATE: 10th
MARCH, 2016
PLACE: MUMBAI
SIGNATURE
(NIKHIL D’SOUZA)
PROJECT GUIDE CERTIFICATE FORM
I Mr. Nikhil D’souza, the undersigned Roll No. 2014035 studying in the Second
Year of MMS is doing my project work under the guidance of Dr. Gowri Shankar
wish to state that I have met my internal guide on the following dates mentioned
below for Project Guidance:-
SR. NO. DATE SIGNATURE OF THE
INTERNAL GUIDE
______________________ ______________________
Signature of the Candidate Signature of Internal Guide
Certificate
This is to certify that the dissertation submitted in partial fulfillment of the
requirement for the award of MMS of the University of Mumbai is a result of the
bonafide work carried out by Mr. Nikhil D’souza under my supervision and
guidance. No part of this report has been submitted for award of any other degree,
diploma fellowship or other similar titles or prizes. The work has also not been
published in any scientific journals/ magazines.
DATE: 10th
MARCH 2016 NAME: NIKHIL D’SOUZA
PLACE: MUMBAI ROLL NO.: 2014035
------------------------------ ---------------------------
DR. V. B. ANGADI DR. GOWRI SHANKAR
(DIRECTOR, LLIM) (PROJECT GUIDE)
ACKNOWLEDGEMENT
This project has been a great learning experience for me. I take this opportunity to
thank Dr. Gowri Shankar my internal project guide whose valuable guidance &
suggestions made this project possible. I am extremely thankful to him/her for his/her
support. He/She has encouraged me and channelized my enthusiasm effectively.
I express my heart-felt gratitude towards my parents Stanislaus D’souza and Hilda
D’souza, siblings and all those friends who have willingly and with utmost
commitment helped me during the course of my project work.
I also express my profound gratitude to Dr. Angadi, Director of Lala Lajpatrai
Institute of Management for giving me the opportunity to work on the project and
broaden my knowledge and experience. My sincere thanks to Prof. Deepa Rohit for
her valuable guidance and advice in completing this project.
I would like to thank all the professors and the staff of Lala Lajpatrai Institute
especially the Library staff who were very helpful in providing books and articles I
needed for my project.
Last but not the least, I am thankful to all those who indirectly extended their co-
operation and invaluable support to me.
EXECUTIVE SUMMARY
In the last half of the twentieth century, payment cards, credit, debit, and charge cards have quietly
revolutionized how we pay for goods and services. It is increasingly common to find merchants
who do not take cash or cheques and increasingly rare to find merchants who refuse payment cards.
Payment cards have also revolutionized how we coordinate the timing of when we purchase goods
and services and when we pay for them. The popular media often focus on how credit cards is
making it much quicker and easier to borrow, encourage people to spend beyond their means and
get mired in debt.. Credit cards enable them to do so
The project report aims to study, “A Study of factors affecting on consumer behavior towards use
of plastic money” in Mumbai region. The study also shows the influencing factors for the usage of
plastic money, the problems faced by respondents using plastic money and customers attitude
towards plastic money.
The sample was decided on the basis of Convenience Random Sampling method.
Data was collected from the Primary Sources as well as Secondary Sources. The responses were
collected by conducting structured close ended questionnaire consisting of Customers from
Mumbai city. The questions which were asked have been designed in such a way so as to bring out
the most favorable data, which will enable the study to get to the closest vicinity of its objectives.
The data collected from the questionnaire has been analyzed and has been interpreted in a
meaningful way to offer some suggestions and recommendations on improving performance.
INDEX
SR.
NO.
CONTENT PAGE NO.
1 INTRODUCTION & RESEARCH
METHODOLOGY
1
2 REVIEW OF LITERATURE 27
3 PRODUCT PORTFOLIO 34
4 MARKET COMPETITORS 44
5 DATA ANALYSIS 47
6 FINDINGS 64
7 CONCLUSION 65
8 RECOMMENDATIONS 66
9 ANNEXURE
10 BIBLIOGRAPHY
1
Chapter 1
Introduction to Plastic Money
Plastic money or polymer money, made out of plastic, is a new and easier way of
paying for goods and services. Plastic money refers to credit cards, you use them
whenever you want and pay later (with interest, of course). It makes it too easy for
people to buy things they normally could not afford, which makes it easier to get into
debt. It is a slang phrase for credit cards, especially when such cards used to make
purchases. The "plastic" portion of this term refers to the plastic construction of credit
cards, as opposed to paper and metal of currency. The "money" portion is an
erroneous reference to credit cards as a form of money, which they are not. Although
credit cards do facilitate transactions, because they are a liability rather than an asset,
they are not money and not part of the economy's money supply.
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.
2
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 (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
3
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.
Use Plastic Money over Cash. Don’t act mean – Be Green!
Plastic money has played a pivotal role in the economic growth of India. Over the
years, plastic money has managed to make it to almost everyone‘s wallet and has thus
changed the way of spending. User friendliness and feasibility are the main features of
plastic money that have made plastic money popular not only in India but also all over
the world. Apart from this, use of plastic money instead of cash also helps in saving
trees and thus creates an eco-friendly environment. Plastic money thus is an integral
part of modern India and the percentage use of plastic money is increasing day by
day. At the end of 2012, approximately 29% of the Indians had plastic money
whereas this figure increased from 29% to 36% at the end of 2013. If the pundits are
to be believed, approximately 44% of the Indians will have plastic money at the end
of 2014. The advantages that plastic money brings are immense and therefore ―Plastic
Money use karega India to smart banega India‖ — credits Big Bazaar.
4
Plastic money is growing because of the various advantages and various features it
provides. Some of the pros are enlisted below –
 Convenience — Credit and debit cards offer no-hassle shopping – no cash, no
checks, no additional identification.
 Security — cash which has been lost can be used by anyone. If you lose a
credit or debit card, you can call 24.7 helpline number and report to the bank
and thus get protected from unauthorized use of your card. However, different
banks may have different liability policies, consult your bank if they offer
any liability waiver.
 Emergency Protection — A credit card will get you through almost any
emergency you can think of. It‘s like a security blanket that will cover you for
e.g. airline insurance, life insurance etc depending upon the credit card.
 Universal Acceptance — Most credit and debit cards are accepted
worldwide. Try that with a personal check! If you need cash, you can make
withdrawals from ATMs or banks around the world that accept your credit or
debit card.
 Simplified Record Keeping — Credit and debit cards give you a record of all
your transactions for the month, so keeping track of where your money goes is
easier.
 Hygienic — Paper money is dirty and unhygienic as it travels from one person
to another whereas on the other hand plastic money usually remains with 2.3
individuals maximum therefore it is clean and hygienic.
5
 Environment Friendly — One of the major causes of deforestation is paper
and this is where plastic money is better than paper money as it reduces
deforestation.
 Value-Added Benefits — Many credit cards offer rebates, cash refunds,
contributions to your favorite charity, or other special value-added benefits
that you won‘t get with paying by cash. You can use Cardback android app to
see offers and rewards on your credit, debit, prepaid and loyalty cards.
Plastic Money never saw it Better in India than Now!
India has come out of self-binding shackles to look "young" again and the enthusiasm
shared by the young work force of the country is driving the economy like never-
before. 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. It will not be
wrong to say that such a scenario in context of the Indian market is not driven by style
statement and is driven more by needs. The benefits of plastic money have offered
unmatched ways to create equilibrium and offer an amicable solution when it comes
to purchases and the inability to possess or carry cash. The modern day Indian
customers find it easier to make physical payment (credit card payments) rather than
carrying too much cash. The introduction of credit card facilities to pay for mobile,
electricity, movie tickets and other related transactions have also contributed to the
growth of plastic money in the country.
6
Best credit cards (India)
In context of the Indian market, the leading credit card service providers are ICICI,
HDFC, HSBC and Standard Chartered to name a few. These financial institutions
have tried their hands on ensuring value-addition while offering customer-friendly
credit card deals.
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. Statistics have clearly revealed that the
numbers of credit card holders in India are close to 22 million as of January, 2007. It
has been also revealed that the increasing consumerism in the country has led to a
two-fold increase in the number of credit card transactions from FY 2003-04 to 2005-
06. The trends were as favorable as ever in the financial years, FY 2006-07 and 2007-
08 and the same.
The credit card system started in India
While the first card was issued in India by visa in1981 and country first gold card was
also issued from the same.
The first international credit card was issued to a restricted number of customers by
Andhra bank1987 through the visa programme, after getting through special
permission from RBI later the AZN credit cards came in 1989.
However the credit card industry in India grown exponentially in its 15 years of
business in the country it had issued 2.69 crores card till December 2003. However in
just one year 2004, the figure has spurted to 4.33 crores.
7
RBI Guidelines on credit card operations
The reserve bank of India has placed draft guidelines on credit card operation from
the members of the public. The guidelines, when finally issued would be applicable to
all commercial banks/non-commercial finance companies (NBFC‘s) and would come
to effect as soon as implemented.
It may be recalled that the Reserve bank had constituted a working Group to evolve a
regulatory mechanism for cards to ensure orderly growth of this segment of consumer
credit and protect the interest of banks / NBFC and their customers. The report of the
group was placed in public domain on April 23, 2005. The draft guidelines issued
now have been framed taking into account the feedback received from media,
member of the public and other on the report of the working Group. The draft
guidelines are as each Bank /NBFC has a well documented policy and a fair practices
code for credit card and should widely disseminate contents.
Targeting the Customers
Currently, there is lack of awareness among potential cardholders, which is likely to
stifle card growth. Most of the banks are relying on freebees and bundle of services
like free accident policy, special shopping offers, purchase protection and add-ons
like additional cards for family members of the cardholder to woo customers. The
smart ones like HSBC are offering very high credit limit to tap customers. Last
month, HSBC launched `Maha' card `with jyada power' which offer customers 25 %
higher credit limit than the limit on any other credit card held by the cardholder.
8
In order to track the 4 million potential customers presently untouched by the `plastic
money' is immense. The only solution is to expand geographical coverage, which is
tricky for the simple fact that Visa and MasterCard have distinct skews towards
metros. Only banks, which penetrate the Indian countryside, will be able to stand the
test of the time. For present, consumer is definitely the king.
The How's & Wherefores of Plastic Money
Not all credit cards are created equal. In fact, they can be as individualist as the people
who use them. So when you're trying to find the best one for your individual needs, it
can get very confusing very fast.
Fortunately, there are lots of online credit card clearing house type companies who
help you do the research and save you time, money and headaches. Just as with
everything in life, a little homework goes a long way. It behooves us all, in this fast-
becoming-cashless-society.
To familiarize ourselves with the businesses that provide this credit card screening
service; a short visit is a real eye-opener when you see how much is out there in the
way of plastic money.
There are low-to-no interest credit cards, secured credit card, airline mile cards, cards
that offer rewards in the form of cash back bonuses on your purchases (or in other
forms, such as points), cards with no annual fee, cards with different rates and terms -
the list is almost endless. Do your homework and choose well After you've figured
out which card is right
9
It's almost imperative these days to have a credit card and break it out now and then.
Those who do not will have a low credit rating or none at all. And since you may well
have to depend on your credit rating one day for something important, using credit
cards wisely makes very good sense.
Let's say you stumbled on a fantastic deal for a house. You weren't planning on it, but
it would be a real opportunity lost if you couldn't take advantage of it. You go for a
loan.
The first thing your potential creditors want to know is whether you are capable of
repaying your debt. They'll look at your job, how much overhead you have, where
you live now, and all kinds of factors. And they will definitely get your credit rating.
This one number alone carries a heavy weight in a creditor's mind. In fact, it could
easily make or break the deal of a lifetime.
Use your credit card wisely, not frivolously, and you will build the strength of your
credit history with every purchase and payment. Credit card companies love to rake in
the late fees and raise interest rates when you fall behind.
Being aware of these pitfalls is part of being a responsible adult these days. Building a
good credit card payment history is part and parcel of good financial sense. You don't
need to maintain a zero balance. In fact, a balance can demonstrate, to your benefit
that you're able to borrow and pay back on a regular basis. Just keep the balance low.
Take responsibility for your credit, and it will be there for you and your family when
you really need it.
10
Plastic money grew 2.1% in September
Business Standard, October 25, 2013
Slowdown is resulting in consumers using less plastic money. Credit card dues for the
banking sector grew 2.1 per cent year-on-year in September from 21.8 per cent a year
ago, showed Reserve Bank of India (RBI) data released on Friday.
During the first half of this financial year jewellery, consumer goods and travel have
not grown significantly. These are where credit card usage is high. Because of the
depreciation of the rupee, many postponed or cancelled travel abroad.
Also, the incremental spends on garments, mobile phones and other consumer goods
have been low in the first six months. RBI came down heavily on jewellers. All these
probably contributed to slow growth in the outstanding credit card book," said a
banker in charge of retail business of a private sector lender.
Bankers also cautioned there could be a further impact on credit card spends
following RBI‘s decision to ban zero per cent equated monthly installments schemes.
However, the personal loans segment grew 18 per cent in September compared with
13 per cent in the same period a year ago. Consumer durable loans grew by 37.9 per
cent compared with 10.6 per cent earlier. While housing loans grew by 20 per cent
compared with 11.3 per cent a year ago. However, vehicle loans grew by 23.1 per
cent compared with 24.8 per cent earlier.
Banks have launched schemes to promote housing and vehicle loans in the festive
season. These include marginal reduction in interest rates and waiver of processing
charges.
11
On a year-on-year basis, non-food bank credit increased by 18.2 per cent in
September as compared with the increase of 15.9 per cent in September 2012.
Credit to industry increased by 17.6 per cent in September as compared with the
increase of 17.0 per cent September 2012. Acceleration in credit growth to industry
was observed in all the major sub-sectors, barring engineering, construction, glass and
glassware and mining and quarrying.
However, credit to agriculture increased by 13.2 per cent in September as compared
with the increase of 19.6 per cent in September 2012.
Credit to the services sector increased by 22.1 per cent in September compared with
an increase of 14.4 per cent in the same period last year. While credit to Non Banking
Financial Companies (NBFCs) increased by 26.6 per cent in September compared
with an increase of 28.4 per cent in September 2012.
Plastic money gains acceptance in rural India
Plastic money is gaining acceptance in rural India. HDFC Bank, the second largest
private lender in the country, has started offering credit cards even at its rural
branches. Bank branches in areas with a population of up to 9,999 are classified as
rural branches.
On an incremental basis, nearly 25 per cent of HDFC Bank‘s credit cards are now
sourced from rural and semi-urban markets even as 40 per cent of Indian population is
believed to be in want of a bank account. The bank has started setting up point-of-sale
(POS) terminals across merchant establishments in these geographies to encourage
customers to use credit cards.
12
―The potential for growth is significantly high in smaller markets since the penetration
of credit cards in these areas is relatively low. In the last couple of years, we have
increased our investments on the acquisition side and are expanding the number of
POS terminals in rural and semi-urban locations,‖ Parag Rao, senior executive vice-
president and business head for credit cards and merchant acquiring services at HDFC
Bank, told Business Standard.
He added HDFC Bank was now offering credit cards, along with other retail banking
products across most of its branches in rural and semi-urban centres. ―We aim to
cover all locations where we have branches. All our rural and semi-urban branches,
barring a few that have started functioning recently, are offering credit cards to the
bank‘s customers,‖ Rao said.
The bank currently has more than half of its 3,062 branches in rural and semi-urban
markets. The private lender opened 518 branches in 2012-13 of which 459 were in
these markets. HDFC Bank is currently the largest issuer of credit cards in the country
with a portfolio of 6.53 million cards. On an average, it issues around 70,000 cards
every month.
Most banks and credit card companies currently do not offer credit cards in rural
geographies. However, lenders are exploring opportunities to grow this business
outside metro cities.
―Smaller markets are becoming important both in terms of card acquisition and spend.
The credit card business is no longer restricted to the top eight Indian cities. While the
number of POS terminals have not increased significantly in smaller towns, e-
commerce is gaining popularity. We find many of our customers from these centres
are increasingly using their credit cards for online transactions,‖ said Jairam
13
Sridharan, senior vice-president and head of consumer lending and payments at Axis
Bank. The private lender is yet to expand its credit card business in rural India but
nearly 30-40 per cent of its incremental card sourcing is currently from locations
outside the top eight Indian cities. The bank has a portfolio of 1.1 million credit cards.
Plastic Money Advantages and Disadvantages
Technology has changed the way we deal with money giving us more convenience
and easy access to funds from anywhere. It all started with a simple credit card that
allowed you to make purchases today and pay later. Further, technological
advancements lead to a new trend where most banks gave you one ATM card or debit
card which can be used for withdrawing money as well as for making purchases or
payments – offline as well as online.
However, plastic money has its share of issues that one must be careful about. Plastic
money definitely provides an alternative in some cases and compliments cash as a
medium.
Convenience of Plastic Money
Since he may require a lot of cash for inter-city travel which can span a few days or
weeks he preferred to use his debit card or credit cards.
For instance he could use his card to pay for hotel stays where cards were commonly
accepted. Similarly for travel he could book tickets online, while for food he had to
rely on cash. However, with his debit card he could withdraw cash whenever required
which made his life easier. Even if he forgets to carry cash he can use his debit card to
withdraw funds whether required.
14
Advantages of Plastic Money
There are several advantages of plastic money as seen in the above illustration. The
advantages include
1. Eliminates the need for carrying huge cash: This eliminates the need for carrying huge
load of cash which is risky and inconvenient too.
2. Risk of Loss or Theft minimized: In case of cash there is a high risk of losing cash
and a chance of cash getting stolen. However, in case of debit/credit card you can
report the matter to the bank and block the card to avoid misuse.
3. Anytime/Anywhere Access using cards you have the unique advantage and
convenience of using it anywhere in the country or even abroad.
4. Credit Facility: In case of credit card you have the option of buying on credit or
paying later. Although the charges are high, it helps you in case of emergencies and
contingencies.
5. Online Payments: You can use cards for online payments, fund transfers and various
other transactions.
Disadvantages of Plastic Money
So far I‘ve been sounding like a nice, pleasant Bank Executive who is convincing you
to open an account. Please note a few points before we look at the disadvantages of
plastic money
 Cards/plastic money is not a complete replacement for cash
 Use of cards can also be risky in some cases
15
Some of the drawbacks or risk related to cards are
1. Non-Acceptance at Small Retail Outlets
Unless you are a person who shops only in supermarkets and hypermarkets you will
be forced to use cash
2. Cannot be used for all daily needs
You cannot pay your milkman, servant, paper wala (newspaper guy), etc by card.
3. Loss & Misuse
Once a card is lost you have to immediately report it and get the card blocked to avoid
misuse. Sometimes when you are not aware that you lost the card….the chances of
misuse is higher.
4. Low Value Transactions
As discussed above already there are cases where small and medium sized retailers
don‘t accept cards for low value transactions (say less than Rs.200 or other criteria).
You may have noticed this even in case of outlets like petrol bunks or restaurants.
5. Service Charges
In some cases the outlets charge additional service charges for cards. So this can be
another burden on your pocket.
6. Damage to Card
Sometimes the card‘s magnetic strip gets damaged or scratches or cuts can render the
card unusable. So keeping it safe and secure is very important.
16
7. Carrying or Keeping the Card
Keeping the card and cash in the wallet together is like ―inviting trouble‖. This is the
way everyone (including me) used to carry cash and cards. But this means once you
lose your wallet you lose everything.
So here the card doesn‘t come to your rescue after losing cash. The best practice is to
keep cash and cards separately so that if you lose one you have the other to bank
upon.
By the way, nowadays I don‘t carry cards in my wallet. It‘s mostly in the bag or
sometimes in a different pocket. You can try this or other methods but ensure that you
don‘t keep everything in one place and lose it all. Now that we have a clear idea of
some of the drawbacks of credit and debit cards lets also look at some key points on
how to strike a balance between use of cash, cards and control your spending habits.
9. Impulsive Purchases
Don‘t yield to impulsive purchases. Try to see what real benefit or value are you
getting from the purchase. If you can‘t live without it you can postpone or keep the
spending on hold.
10. Peer Pressure
It‘s okay to spend some money on entertainment, outing, fine dining, etc. once in a
while (say once or twice a month).
But if you do it every week on instance of your friend, colleague, etc you will have
not savings every month end. Your future financial planning is out of question if you
live from pay cheque to pay cheque.
17
So it‘s time to become smart and avoid unnecessary wasteful expenditure. Sometimes
you may have to attend a few parties, dinner/lunch activities, etc but prioritize and
attend only the ones which are important and add value to you. For others you can say
sorry and avoid or try to finish it over a simple coffee.
11. Overuse of Cards
I find that people who are finding cards as a convenient medium try to use it
everywhere – left, right and center. Further, they have 3-4 cards which are used one
after the other at different places. I would advise them to have fewer transactions so
that it is easier to keep a check on the transactions every month and easier to pay the
bill as well.
12. Special Offers, Discounts
Some people have this fancy and think that they are smart when they get special
discounts on cards at retail outlets.
Do you think the card company and the retail chains are so kind enough to serve you
at a discount. They want you to loosen your purse and spend more so that they can
laugh all the way to their bank.
18
Future Scenario of Plastic Cards Market in India
The use of plastic cards in India has no doubt in rise from last few years but there is
still a great potential left for the bankers to introduce more attractive services in order
to lure the customers on one side and increase their profits on the other. Some aspects
or facts (organized from various studies and articles) which are contributing to the
growth of plastic cards market and also indicate its growth in the near future are
discussed below:
 The credit card companies say that consumers spend Rs 50,000 crore annually
which is expected to grow at 50% over the next 4-5 years since 2007
(Economic Times, 19 September 2007).
 According to CLSA Report, the estimated credit card base in India till 2020
will be 127 million as compared to 23.1 million in 2007.
 The number of debit and credit card users in India is anticipated to reach 73.4
million and 406 million by the year 2010 and 2011. (4)
 According to an RBI announcement, by April 2009, bank customers will able
to use their ATM cards to withdraw cash from any automated teller machine
installed by various commercial banks across the count and too free of cost.
(5)
 According to a new RBR report on Global ATM Market and Forecasts Till
2011, India is likely to invest heavily in ATMs till 2011.
 Leading Indian banks are said to target a ratio of 1: 2.5 for bank branches v/s
ATMs by 2012. This means the number of ATMs will grow to around 1.75
lakh, assuming the number of branches remains at the same level (The Hindu
Business Line, 29 November 2007).
19
 Now a number of non-banks in collaboration with/without banks are planning
to issue both, limited or multipurpose prepaid cards. (6)
 In late 2007, most of the companies had announced plans to convert their
credit/debit cards to smart cards by replacing the magnetic stripes in them with
computer chips and incorporating latest encryption technologies. So it would
not be long before smart cards established themselves in India (Arunachalam
L. and Sivasubramanian M., 2007).
 A few non-banks have also entered the domain of providing various services
like provision of infrastructure e.g., shared ATM networks POS terminals,
cheque processing centresetc which will lead to enhance the potential of
plastic cards market (Arunachalam L. and Sivasubramanian M., 2007).
 A joint venture between Life Insurance Corporation of India (LIC) and GE
Money is likely to launch its first credit card product in 2009 which will be
offered only to LIC customers and policy holders (Vardhaman, 2008).
 In another positive development, ABN AMRO with India's travel portal
MakeMyTrip.com launched a distinctive cobranded credit card, 'Go Card' in
2008. The card offers special reward benefits and good range of travel-related
promotions and packages (Vardhaman, 2008).
 Banks in India are looking at deploying biometric ATMs targeted to reach the
unbanked population in rural India. Using thumbprint and voice guidance in
ATMs reduces literacy requirements to a considerable extent. Thus,
establishing the identity of a rural depositor through biometrics makes it
possible for illiterate or barely literate people to become part of the banking
user community (Murali D. and Jaishankar P., 2007).
20
 There are already 1.6 million customers using smart cards banking solution
and that figure will go up to 4 million by the end of March 2009 and will reach
to 25 million in 5 years Hence, the future prospects of plastic cards in India are
bright enough to bring paradigm change in its popularity among customers as
well as banks. Also, plastic money has immense opportunities in a growing
economy like India. All types of banks whether public, private or foreign are
contributing positively towards the development of plastic cards in India. Until
now, the growth and usage of plastic cards has been seen more in urban areas
due to existence of more literate people, better infrastructure facilities and
proper awareness as compared to rural areas. The rural people can only
understand their regional language and most of them are even illiterate who
are least aware about the usefulness of plastic cards. Moreover, there is lack of
adequate infrastructure to push the development of cards and induce more
innovation. Thus, most of the banks have now planned to expand aggressively
into rural India, where about 60% of the population lives, using an innovative
system based biometric cards through which customers will be able to do will
be able to do any time anywhere banking on their own (David R., 2007)
The rise in consumerism generated by economic reforms began in 1990's has
also sparked robust demand for plastic cards. The arrival of malls, multiplexes,
online shopping stores and shopping complexes encourage the customers to
make use of plastic cards. The modern day, Indian customers find it easier to
make physical payment (credit card or debit card payments) rather than
carrying too much cash contributing to the growth of plastic money in the
country. The prevalence of intensifying competition has further fuelled the
21
usage of plastic cards in the country like never-before. It benefits the
consumer through enhanced product offerings at a lower cost and that too with
lucrative deals delighted with rewards scheme, loyalty bonus points,
promotional campaigns etc. This has been a very welcome change and the
contribution of all the players is very important to continue the momentum
(Parul, 2008). However, operational risk involved with the usage of plastic
cards like chances of fraud, card damage etc. plays the negative part too
(Retail Payment System, 2004). Moreover, some customers are not able to
utilise cards effectively due to its complex nature and they don't actually know
how to operate it for specific purpose. Thus, the banks should give them some
training regarding its usage. The banks can also provide them facility to use
plastic cards on trail basis so that they can become more confident while using
their own cards. Cost has also remained an issue in case of credit cards. The
interest levied on outstanding amount is very high which sometimes takes the
customers in debt trap ultimately discouraging the potential customers to make
use of it. However, all these hurdles will diminish over time and positively
influencing trends are expected to continue in the near and far-future. Also, the
growth of plastic cards in future would depend upon the capacity building of
the banks to meet the challenges and make use of the opportunities profitably.
However, the kind of technology used and the efficiency of operations would
provide the much needed competitive edge for success in plastic cards
business. Furthermore, in all these customers' interest is of paramount
importance (Gopinath S., 2005).
22
E-money: the future of cash
We may not be that far away from a world where cash follows the cheque book into
oblivion and few transactions are conducted face to face. There are in excess of 20
billion payments of less than £10 made every year; they could all go cashless.
E-money comes in three forms, two of them specifically creations of the internet.
First, there is the "card not present" phenomenon, where you have sufficient faith in
the online retailer – nowadays, anyone from Tesco to Amazon and lastminute.com –
that you feel happy to tap your payment card details on to a web page. You and the
"shopkeeper" never actually meet, and you never leave your home or office.
Money thus moves from being a physical commodity – a gold coin, a paper banknote
or a plastic card – to being a purely virtual commodity (though of course banks
themselves have long held your current account in virtual form, as a series of binary
codes in a computer file).
Second, we have seen the growth of outfits specifically set up to facilitate payments
on the web. Perhaps the most high profile of these is Pay Pal, as featured, and trusted,
on eBay. Barclays Bank can chart its origins back to 1685, the Royal Bank of
Scotland to 1727 and Lloyds to 1765; Pay Pal dates back only to 2000, yet it now
operates in 103 markets, manages more than 133 million accounts and allows
customers to send, receive and hold funds in currencies from the US dollar to the
Polish zloty.
The real revolution, though, may be the abolition of cash, cheques, credit cards and
debit cards and their replacement by one single means of payment, which you just
wave, possibly nonchalantly, at the shop assistant. This is what the "contact less" card
23
promises, so called because you don't even have to put it into a reader to buy
something.
The Barclaycard One Pulse card, for example, was launched only a month ago, with
4,000 guinea-pig customers in London. It will combine the functions of an Oyster
card (Transport for London's existing "cashless" method of prepaying for bus and
Tube journeys), a Barclaycard, and a "One Touch" contact less technology card.
This is the novel bit. It allows cardholders to make purchases of £10 or under more
quickly and conveniently with a single touch of their card against a reader instead of
entering a PIN or signature, thus reducing the need to use and carry cash. In a Bourne-
style nightmare, your every move and tiniest purchase will then be tracked by your
bank and, if legislation allows, officialdom. Thus can "they" know about your
purchase of The Independent, a flap jack and day trip to Tate Modern.
Alternatively, the SIM card in your mobile phone could be used to pay for the little
things in life (they're trying this out in South Korea). Either way, you will be being
monitored. Money is what money does, according to the old adage. And in the future,
your money may even spy on you.
24
Objectives of the study
 To study the usage pattern of plastic money among the consumers.
 To identify the influencing factors for the usage of plastic money
 To know the problems faced by respondents using plastic money.
 To find out the customers attitude towards plastic money.
Scope of the study
The scope of the study restricted to the card user of the Mumbai city. For the
collection of the primary data the study will be confined to Mumbai consumers
only.
Significance of the Study
In this new era of technological advancements and virtual money, consumers still
use currency notes at places of trade. This research will show the effectiveness of
plastics cards over hard cash in the days to come
25
Research Methodology
Research Design
The study being undertaken is Descriptive in nature. The major purpose of descriptive
research is description of the state of affairs as it exists at present, while studying the
research problem, scientific method is followed.
Sampling Techniques
The convenience Random sampling technique was employed in the selection of the
sample.
Sampling Size
The sample size was so selected that it could be adequate enough to represent the
whole population, and also give the true picture. The total sample size was restricted
to 150 consumers of Mumbai. The primary data was collected by administering
structured questionnaire to the investors.
Data Collection Method
The data collection method for the study the researcher should keep in the mind the
two sources of data.
• Primary data
• Secondary data.
26
Primary Data:
Source of primary data:
 Questionnaire
Primary data has been collected through structured questioner. The questionnaire
consisted of a variety of questions that lay consistent with the objective of the
research. .
Questionnaire
The type of Questionnaire is form as Closed ended. The questionnaire was prepared
keeping in view the objectives of study. Different questions were so arranged to know
buying behavior of consumer who use plastic money provided by company.
Secondary Data:
Secondary data has been collected from the Newspaper, Research paper etc
Limitations of the study
The present study is based on the data collected from sample selected city Mumbai
only and the result may vary from other regions of India or the national average.
27
Chapter 2
Literature Review
Slocum, J. and L. Mathews (1970)', in their study ―Social class and income
indicators of consumer credit beltaviot1t"‖ studied the influence of social and income
variables on credit card selection and usage among cardholders in USA. They found
that members of the lower socio-economic class tend to use their cards for installment
financing much more than higher socio-economic classes. Upper classes tend to use
their cards as a convenient method of payment. Lower classes showed more impulse
buying than the middle class, who feels that they should save money and postpone
purchases. The upper classes do not need to save and defer gratification, and since
there is no reason for installments they use credit cards for convenience. It also
showed that age, sex and marital status are the significant determinants of credit card
selection and its usage.
Mandel, L. (l972), in his research ―Credit card use in the US‖, found that primary
determinants of credit card usage were family income and education of the
cardholders. Higher income and better educated families were more likely to use
credit cards than lower income families. This is because credit card was initially
marketed to higher income people. Another finding of his research was that families
living around the largest cities are more likely to use credit cards. This finding
matches with the Greek cardholder‘s demographic profile, where a very high
concentration of cardholders is observed in urban areas. He also found that families
with different incomes perceived differently the advantages and disadvantages of
credit cards. Lower and middle income families considered the credit facility as a
28
definite advantage, while high income families found safety and convenience to be
definite advantages.
Caskey, John P. and Gordon H. Sellon Jr. (l994)'3 in their article ―ls the debit card
revolution finally here‗?‖, analysed the factors that have limited the debit cards
success and examined the prospects for future growth. They also proposed that
consumers who used credit cards for the benefit of having credit available were
unlikely to be interested in debit cards. Most consumers based their decision of using
debit cards on non-price factors such as convenience and availability. They suggested
that convenience users of credit cards might find debit cards desirable because they
did not need to write cheques at the end of each month to pay off credit card debits,
and convenience users might find debit cards were helpful in controlling their
spending since they could spend only what they had in their account.
Delner, Ncjdet and Herbert Katzenstein (l994)l4, in their paper ―Card possession
and other payment systems: Use patterns among Asian and Hispanic consumers‖,
explored the socio-economic and demographic characteristics of Asian and Hispanic
credit card holders. lt also outlined a conceptualization of the relationship between
alternative payment systems and various demographic and behavioural variables,
which may serve as a preliminary theoretical framework for analysis of payment
systems. lt also discussed the implications and their importance to marketers.
Worthington, Steve (l994)15, in the paper ―Retailer aspirations in plastic card and
payment systems - An international comparison‖, seeks to focus attention on the
power relationships between retailers and their suppliers of financial services. Using
international example, it draws attention to the different ways in which retailers are
seeking to enhance their position in the payment system supply chain. The economics
of this supply chain are explained and the rationale behind the acceptance of payment
29
by plastic card is developed. Hypotheses are advanced; for each of international
examples, as to how aspirations might affect the payment system, supply chain and
the concluded that the balance of power is shifting from traditional payment system
provides to the payment system users — the retailers.
Puri, Vishal (l997) in his paper ―Smart cards — The smart way for the banks to go?‖,
examined the many innovative smart card applications covering areas such as
telecommunications, transport, banking, health care and employee/membership
schemes. It looked at how the banks, financial service firms, information companies
and card issuers are gradually re-conceptualizing their delivery strategy as well as
their businesses to meet the growing need for remote delivery, brand equity and
differentiation. Smart cards could act as payment vehicles, access keys, information
managers, marketing tools and customized delivery systems. It also explored the
possibilities of an electronic purse ranging from a possible stored value and to a re-
loadable stored value card, which could literally replace low-value cash transactions.
Smart cards would then become integral to the bank‘s concept of remote delivery
system in the future, because smart cards are not just a product; they are a new
delivery system. Besides, the paper" focused on some of the issues that might be of
deeper concern to banks and suggests collaboration between banks and providers in
the mass introduction of smart cards.
Hayashi, Fumiko and Elizabeth Klee (2003)37 in their paper ―Technology adoption
and consumer payments: Evidence from survey data‖ commented that payment
choices depends consumers propensity to adopt new technologies and nature of
transactions. This paper also analyzed the use of consumer payment instrument at the
point of sale. It is indicated that consumers who use new technologies and computer
30
are more likely to use e-payment instruments such as debit cards, credit cards, smart
cards etc.
Bansal, N. K. (2006)'4 in his article" Plastic card currency — A convenient mode of
payment", explained the role of plastic money, its various forms and the positive
impact of plastic money on the lives of people of all walks of life and being accepted
as a convenient mode of payment in the modern era of electronic technology driven
commerce.
Sarangapani, A. and T. Mamatha (2008)77 in their article ―The growing
prominence of debit cards and credit cards in the Indian banking industry‖,
highlighted the growing prominence of debit and credit cards by giving necessary
statistics, comparative features of both cards and also pointed out more popularity of
debit cards than credit cards.
Initiative taken by Reserve Bank Of India
Reserve Bank of India to introduce plastic money on pilot basis
The Reserve Bank of India (RBI) is planning to introduce plastic currency on a pilot
basis as it has been proven to be economical and environment-friendly when
compared to paper currency, said RBI governor D Subbarao here on July 6, 2012.
"We contemplated introducing plastic currency 15 years ago, gave it up and now we
are trying to do this again as a pilot experiment. A lot of research analysis has gone
into this about the cost and acceptability. Plastic currency is proven to be economical
and would probably save us money," he said while speaking at the inauguration of the
new Post Graduate Programme (PGP) batch at the Indian Institute of Management
Kozhikode (IIM-K) on Friday.
31
"We got a study done by the Centre for Environmental Studies in Nagpur and they
have verified and told us that the carbon foot print of plastic currency is lower than
that of paper currency," he said. Responding to recent criticisms from the corporate
sector against the interest rate policy of the RBI, Subbarao said inflation cannot be
controlled without sacrificing some growth.
Card payment may soon be mandatory for 5-star bills Mar 3, 2015
NEW DELHI: Seeking to curb the use of cash for high-value transactions and check
the flow of black money in the economy, the government may make it mandatory to
undertake certain transactions — such as payment of hotel bills beyond a specified
limit.
"Several things are under consideration, for example incentisizing banks. you know
there are transaction costs which government can perhaps share. But there are also
otherwise, you know what I would say to disincentives cash transaction, any
expenditure by a person in a five star hotel above Rs 5,000 have to be settled using
credit card, there can be also decisions like that," finance secretary Rajiv Mehrishi
told reporters at a press conference on Monday.
Mehrishi's comments are just pointers to steps that may be offing as the final decision
will be based on measures to be suggested by a committee that will come out with
structures that can be put in place to encourage use of credit or debit cards. The
statement comes two days after tough measures were announced in the budget to curb
black money.
32
Finance Minister Arun Jaitley in his maiden full-year Budget had said the government
will announce incentives to encourage card usage by consumers to curb black money
flow into the system.
Taking a cue from the Special Investigative Team on black money, the minister had
said that he wanted to incentivise credit and debit card transactions, and disincentivise
cash transactions. The SIT had suggested that the government should put a limitation
on cash holdings for private use and including provisions for confiscation of cash held
beyond prescribed limits. It had pointed to a number of European countries that bar
any cash dealings above a particular limit but said that small transactions — which
make a bulk of common man's daily transactions — should not be affected.
E-commerce gives a boost to credit cards in India Dec 10, 2014
CHENNAI: With the resurgence in online shopping, use of credit cards to complete
transactions is fuelling a surge in usage.
Data from RBI states sequential growth in credit card spends in the country have
grown 8% to Rs 44,980 crores during the first quarter ending June 30 2014 as against
Rs 41,861 crores during the last quarter of 2013-14.
Axis Bank has seen its average monthly credit card spends move up from Rs 400
crores during FY 13 to Rs 725 crores during FY 14. Moreover, during the second
quarter of FY 15, the average credit card monthly spends were Rs 1,100 crores for the
bank from Rs 650 crores a year ago.
33
"A lot of the e-commerce growth is through cards. Customers are getting confident
about using chip-based cards too and the sense of security is on the rise," Jairam
Sridharan, president, retail lending and payments, Axis Bank said.
Similarly, HDFC Bank has witnessed a 30% year-on-year growth in second quarter.
"Online e-tailing and bill payments and travel have been the main drivers," Parag Rao,
senior executive vice president, business head, card payment products and merchant
acquiring services, HDFC Bank said.
For Kotak Mahindra Bank it's a 33% growth in card spends during the second quarter.
"Growth in e-commerce spends coupled with growth in the commercial card spends
are the main factors," Sumit Bali, executive vice president, Kotak Mahindra Bank
said.
Bali added that corporate cards have shown maximum spends growth both in year to
date (April to November 2014 over April to November 2013) as well as during
quarter two. "Companies are increasingly using this route of payment for convenience
and reconciliation benefits," Bali said.
The festive season too has played its role too. "A lot of consumer durable spends and
electronic purchases have happened via cards this season. Banks too are putting in
compelling festive offers in terms on cash back and tie-ups with merchants,"
Sridharan said.
According to bankers, overall spends on credit cards (industry level) have moved up
25% year on year during FY 14 as against FY 13. The total credit cards in circulation
as on March 2014 stood at 1.91 crores. "With the economy looking up, we expect the
spends in cards would grow in future," Rao of HDFC Bank said.
34
Chapter 3
Product portfolio
1. Credit card
A credit card is plastic money that is used to pay for products and services at over 20
million locations around the world. All you need to do is produce the card and sign a
charge slip to pay for your purchases. The institution which issues the card makes the
payment to the outlet on your behalf; you will pay this 'loan' back to the institution at
a later date.
35
2. Debit card
Debit cards are substitutes for cash or check payments, much the same way that credit
cards are. However, banks only issue them to you if you hold an account with them.
When a debit card is used to make a payment, the total amount charged is instantly
reduced from your bank balance. A debit card is only accepted at outlets with
electronic swipe-machines that can check and deduct amounts from your bank
balance online.
36
3. Charge card
A charge card carries all the features of credit cards. However, after using a charge
card you will have to pay off the entire amount billed, by the due date. If you fail to
do so, you are likely to be considered a defaulter and will usually have to pay up a
steep late payment charge. When you use a credit card you are not declared a
defaulter even if you miss your due date. A 2.95 per cent late payment fees (this
differs from one bank to another) is levied in your next billing statement.
37
4. Amex card
Amex stands for American Express and is one of the well-known charge cards. This
card has its own merchant establishment tie-ups and does not depend on the network
of MasterCard or Visa. This card is typically meant for high-income group categories
and companies and may not be acceptable at many outlets. There are a wide variety of
special privileges offered to Amex cardholders.
38
5. MasterCard and Visa
MasterCard and Visa are global non-profit organizations dedicated to promote the
growth of the card business across the world. They have built a vast network of
merchant establishments so that customer‘s world-wide may use their respective
credit cards to make various purchases.
39
6. Smart card
A smart card contains an electronic chip which is used to store cash. This is most
useful when you have to pay for small purchases, for example bus fares and coffee.
No identification, signature or payment authorization is required for using this
card. The exact amount of purchase is deducted from the smart card during payment
and is collected by smart card reading machines. No change is given. Currently this
product is available only in very developed countries like the United States and is
being used only sporadically in India.
40
7. Diners Club card
Diners Club is a branded charge card. There are a wide variety of special privileges
offered to the Diners Club cardholder. For instance, as a cardholder you can set your
own spending limit. Besides, the card has its own merchant establishment tie-ups and
does not depend on the network of MasterCard or Visa. However, since this card is
typically meant for high-income group categories, it may not be acceptable at many
outlets. It would be a good idea to check whether a member establishment does accept
the card or not in advance.
41
8. Photo card
If your photograph is imprinted on a card, then you have what is known as a photo
card. Doing this helps identify the user of the credit card and is therefore considered
safer. Besides, in many cases, your photo card can function as your identity card as
well.
42
9. Global card
Global cards allow you the flexibility and convenience of using a credit card rather
than cash or travelers checks while travelling abroad for either business or personal
reasons.
10. Co-branded card
Co-branded cards are credit cards issued by card companies that have tied up with a
popular brand for the purpose of offering certain exclusive benefits to the consumer.
For example, the Citi-Times card gives you all the benefits of a Citibank credit card
along with a special discount on Times Music cassettes, free entry to Times Music
events, etc.
43
11. Affinity card
The card issuer ties up with popular organizations/ institutions which are often non-
profit organizations (City-WWF card or the Stan chart-Cricket cards) to offer an
affinity card. When the card is used, a certain percentage is contributed to the
organization /institution by the card issuer.
12. Add-on card
An add-on card allows you to apply for an additional credit card within the overall
credit limit. You can apply for this card in the name of family members like
your father/ mother/ spouse/ brother/ sister/ all children above 18 years of age. Your
billing statement would reflect the details of purchases made using the add-on card.
You are liable to make good all the payments for the purchases made using the add-on
card(s).
44
Chapter 4
Market Competition
Credit / Debit Cards issued by Indian Public Sector Banks 2015
Bank Name Credit Cards Debit Cards
Allahabad Bank 0 3992767
Andhra Bank 139813 10435400
Bank of Baroda 77879 21139326
Bank of India 130654 24015770
Bank of Maharashtra 36023 4833428
Canara Bank 106121 22691756
Central Bank of India 98986 13321518
Corporation Bank 52390 7687926
Dena Bank 0 4667212
Indian Bank 67202 14918675
Indian Overseas Bank 49925 8337243
Oriental Bank of Commerce 0 6807835
Punjab and Sind Bank 0 1517953
Punjab National Bank 139278 30275225
Syndicate Bank 71515 9689245
UCO Bank 0 5406108
Union Bank of India 76529 17110025
United Bank of India 0 4704772
Vijaya Bank 36687 4064543
State Bank of India 3009541 147521342
State Bank of Bikaner & Jaipur 0 8431631
State Bank of Hyderabad 0 12598295
State Bank of Mysore 0 4385210
State Bank of Patiala 0 6058503
State Bank of Travancore 0 9425152
45
By New Private Sector Banks in India 2015
Bank Name Credit Cards Debit Cards
Development Credit Bank Ltd. 3701 194424
HDFC Bank Ltd. 5748412 20099155
ICICI Bank Ltd. 3279651 25214856
IndusInd Bank Ltd 320691 1861932
Kotak Mahindra Bank Ltd 486759 1442048
Axis Bank Ltd. 1587348 14880856
Yes Bank Ltd. 0 791211
By Old Private Sector Banks in India 2015
Bank Name Credit Cards Debit Cards
IDBI Ltd. 0 7818631
Catholic Syrian Bank Ltd. 0 672057
City Union Bank Ltd 0 1394487
Dhanalaxmi Bank Ltd. 5556 740145
Federal Bank Limited 0 4307081
ING Vysya Bank 13128 1410777
Jammu & Kashmir Bank 42028 2138247
Karnataka Bank Ltd. 0 2424014
Karur Vysya Bank Ltd 0 3297371
Lakshmi Vilas Bank Ltd. 0 499463
Ratnakar Bank Ltd. 84048 293924
South Indian Bank Ltd 0 2778191
Tamilnadu Mercantile Bank Ltd. 6708 718317
46
By Foreign Banks Operating in India 2015
Bank Name Credit Cards Debit Cards
RBS (ABN AMRO) 0 119152
American Express Bkg. Corp. 700813 0
Bank of America 2522 0
Barclays Bank 0 3729
Citibank 2384722 1526782
Deutsche Bank 0 80590
DBS Ltd. 0 21068
Firstrand Bank 0 64396
HSBC 497131 560291
Standard Chartered Bank 1107098 690800
47
Chapter 5
Data analysis and Interpretation
Table 1 : Demographic Characteristics of respondents
Demographic Number Percent
Gender
Male 79 52.66
Female 71 47.34
Age (Yrs)
15-25 25 16.67%
26-36 38 25.33%
36-45 45 30.00%
46 & above 42 28.00%
Profession
Student 28 18.67%
Salaried (Office workers) 41 27.33%
Entrepreneurs (Businessman) 49 32.67%
Senior Citizen 15 10.00%
Others 17 11.33%
Income
1000-5000 10 6.67%
5000-20000 27 18.00%
48
21000-35000 51 34.00%
36000-50000 30 20.00%
51000 & above 32 21.33%
Do the customer carry Plastic Money:
Yes 89 59.33%
No 61 40.67%
Type of plastic money
Credit Card 48 32.00%
Debit Card/ATM 61 40.67%
Specific Outlet Card 41 27.33%
Most Convenient way to pay
Cash 45 30.00%
Card (Plastic Money) 105 70.00%
Preference towards Plastic Money:
Security 42 28.00%
Convenient 62 41.33%
Don‘t want to carry paper money 29 19.33%
Less risk (like theft) involved compared to paper money 17 11.33%
49
Is Plastic Money the Safest mode of transaction?
Yes 82 54.67%
No 68 45.33%
Potential Problem faced while using cards
Lack of trust while making transaction 39 26.00%
Unacceptability at retail outlet 32 21.33%
High Interest rate 45 30.00%
Complexity of Terms and conditions of bank 19 12.67%
Technology Linkage issue 15 10.00%
Future prospects of plastic money
Rapid Growth 46 30.67%
Steady Growth 31 20.67%
Stagnant 38 25.33%
Can't predict 20 13.33%
Decline 15 10.00%
Reasons behind using plastic money
Handy money 120 79.30%
To avail different offer 27 18.70%
More credit line option 3 2%
50
Interpretation
1. What is your Gender?
This pie diagram indicates the Gender wise proportion of the 150 respondents.
Gender wise proportion of the Male respondents are more, .i.e. is 53% than the female
respondents that is 47%. It states that Male consumer use more plastic money than the
female consumer.
Male
53%
Female
47%
Gender
51
2. What is your Age?
This pie diagram indicates the various age group which are included in 150
respondents for data collection
Age Group of 36-45 use more plastic money 30% followed by age group 46 and
above 28% and 26-36 that is 25% and 15-25 that is 17%.
15-25
17%
26-36
25%
36-45
30%
46 & above
28%
Age
52
3. What is your Profession?
This pie diagram indicates the profession of 150 respondents.
Profession wise the usage of Entrepreneur is more i.e. 33% if we compared with the
Student, Salaried person, Senior citizen and Others that is 19%, 27%,10% and11%
respectively.
Student
19%
Salaried
27%Entrepreneurs
33%
Senior Citizen
10%
Others
11%
Profession
53
4. What is your Income Range?
This pie diagram gives knowledge about the income level of the 150 respondents.
Income Group of 210000-35000 uses more Plastic money that is 34% followed by
51000 and above (21%), 36000-50000(20%), 50000-20000(18%), 1000-5000(7%).
1000-5000
7%
5000-20000
18%
21000-35000
34%
36000-50000
20%
51000 & above
21%
Income
54
5. Do you carry Plastic Money?
This pie diagram gives the knowledge about the penetration of plastic money out of
150 how many customers are carrying plastic money.
Out of 150 respondents 59% respondents like to carry plastic money and 41% they
don‘t like to carry plastic money with them.
Yes
59%
No
41%
Customers carry Plastic Money
55
6. Which Type of plastic money do you carry along?
This pie diagram indicates the types of plastic money use by the respondents
When 150 respondents were asked which type of Plastic money they used.41%
Respondents says that they use Debit Card/ATM, 32% says that they use credit card
and 27% respondents are using special outlet card.
Credit Card
32%
Debit Card/ATM
41%
Specific Outlet
Card
27%
Type of Plastic money
56
7. Which is the most convenient way to pay?
This pie diagram indicates the mode which is convenient to the consumer.
From the above diagram we can say that 70% customers use plastic money for the
convenience and 30% are still using cash because they think that cash is convenient
way to do transaction.
Cash
30%
Card (Plastic
Money)
70%
Convenient way to pay
57
8. Why do you Prefer Plastic Money?
This pie diagram indicates why consumers preferred plastic money for the
transactions.
The preference of 150 respondents for using the plastic money is describe in the
above diagram.42% respondents says it is convenient,28% respondents says it is
Secured, 19% respondents says they don‘t like to carry paper money and 11%
respondents says it is helping in reducing the risk.
Security
28%
Convenient
42%
don't want to
carry paper money
19%
Less risk
11%
Preference
58
9. Plastic Money is the safest mode of transaction?
This diagram indicate the consumers opinion about the safest mode of transactions
whether it is safe or not.
When we asked the respondents whether plastic money is safe or not 55%
respondents says it is safe and 45% respondents say it is not safe.
Yes
55%
No
45%
Safest mode of transaction
59
10. What Potential issues are faced by you while using cards?
This pie diagram indicates the issues faced by the consumers while doing transaction
through the plastic money.
Out of 150 respondents 30% respondent‘s problem is high interest rate, 26%
respondents says they are having Lack of trust while making transaction, 13%
respondents says they face problem of Complexity of Terms and conditions of bank
and 10% respondents say technology linkage issues they face while using the plastic
money.
Lack of trust while
making
transaction
26%
Unacceptability at
retail outlet
21%
High Interest rate
30%
Complexity of
Terms and
conditions of bank
13%
Technology
Linkage issue
10%
Issues faced while using cards
60
11. What do you think about Future prospects of plastic money?
This pie diagram indicates the future prospects of plastic money.
From the above diagram Future prospects of the plastic money is predicted. 34%
respondents says there is rapid growth, 28% respondents say it will be stagnant, 23%
respondents say there will be steady growth and 15% respondents says they can‘t
predict the future prospect.
Rapid Growth
34%
Steady Growth
23%
Stagnant
28%
Can't predict
15%
Future prospects
61
12. Reason behind using plastic money?
This pie diagram indicates the reasons why consumers are using the plastic money.
Out of 150 respondents 80% respondents use plastic money because it is handy
money easy to carry, 18% respondents use to avail the different offers which is on the
specific products and 2% respondents use to get more credit line option.
Handy money
80%
To avail different
offer
18%
More credit line
option
2%
Reasons behind using plastic money
62
CHI- SQUARE TEST
1. Easy to use feature increase interest in plastic money
Customer view % of respondents
Handy money
79.3
To avail different offer
18.7
More credit line option
2
H0: There has been no significant relation between consumer usage and plastic card
benefits.
H1: There has been significant relation between consumer usage and plastic card
benefits.
Probability of benefits of cards =1/3. On the basis of this hypothesis the expected
number of respondent‘s preference (E) =150/3= 50
EXPECTED AND OBSERVED RESPONDENTS
O(Observed) E (Expected)
79.3 50
18.7 50
2 50
63
Chi-Square test or test=
O(Observed) E(Expected)
(Expected)
O-E (O-E)2
(O-E)2
/E
Handy
money
79.3 34 29.3 858.49 17.17
To avail
different
offer
18.7 50 31.3 979.69 19.59
More
credit line
option
2 50 48 2304 46.08
TOTAL 100 150 82.83
Calculated value Degree of freedom(n-1) Tabulated value
Chi-square 82.83 2 5.991
The table value of for 2 degree of freedom at 5% level of significance is 5.991.
The calculated value of is much higher than this table value and hence we reject
the hypothesis and accept H1, which provides sufficient evidence that card usage
benefits has significant impact on consumer usage behavior. 79.3%, consumers‘ usage
behavior is influenced by card benefits.
64
Chapter 6
Findings
According to above data it has observed that around 80% of the people in south
Mumbai carry plastic money mainly for two reasons i.e. security & convenience.
Moreover it is easy to carry because it prevents carrying hard cash or large amount of
money at the same time hence it reduces the possibility of theft, mainly high income
middle class group prefer cards i.e. 43.75%.
It is also an easy way to access the money just in case an individual requires the
money on an immediate basis then he/she can withdraw the amount directly from the
account without wasting much time in travelling but there are still 34.375% people
who still don‘t feel safe while doing transactions through card
65
Chapter 7
Conclusion
Plastic money is of great use in today‘s busy world and as far as time saving is
concerned. Since paper notes are more risky than plastic money. The transactions take
place in plastic money is very easy and customers are satisfied too. Whereas some
individuals are not comfortable or don‘t want to use it as they feel that paper notes are
safer than plastic money. People can take credit through plastic money i.e. credit card
as and when required. It is also observed that there are frauds in plastic money some
of them can be solved and some of them cannot be solved.
The news related to plastic money demotivates the customers to use it because fraud
cases are increasing day by day its mainly due to technology linkage issue which must
be considered by the banks & IT ministry and try to update the IT laws for such
cyber-crimes. Consumers prefer these cards mostly for shopping online E-commerce
site which has given people a better medium to use the plastic money.
As nowadays technology is growing rapidly, plastic money is very efficient tool for
the customers as well as for the organizations. Plastic money saves lot of time of the
consumers by reducing the waiting time at a crowded place. It also keeps track of
records of transactions that can be referred by the customers at any point of time. It
has also broken the barriers of problems like counterfeiting and duplication of notes.
Customers don‘t need to carry cash while on a go as plastic money has reduced its
stress of carrying cash and its dependency on banks.
At last it is concluded that plastic money has a very bright future in the coming years
because of the increasing trend of e-commerce.
66
Chapter 8
Recommendations
Out of 150 respondents 89 respondents carry plastic money with them whereas 61
respondents don‘t carry plastic money which means 59.33% consumers are using
plastic money whereas 40.67% are not using plastic money
59.33% consumer use Credit card, ATM/Debit Card and Specific outlet card but
40.67% are using ATM/Debit card followed by Credit card i.e. 32% and Specific card
27.33%.
Organizations who offer plastic money should create awareness among all the
Mumbai city customers that using credit card and other specific card will help them in
making their life simple with quick transactions and thus avoid wasting time and
energy, so that they will accept other cards and use it like ATM/Debit card.
59.33% consumer accepted the Plastic money for multiple use but 40.67% consumer
did not accepted it due to High interest rate, lack of trust while making the
transaction, unacceptability at retail outlet, Complexity of terms and conditions of
bank and technology linkage issue.
So every organization who offers plastic money to the consumer should more focus
on the safety and security of the consumer and if in case any fraud activity is faced by
the consumer then there should be some protection or any law in favour of the
consumers which will help to prevent it next time.
67
Chapter 9
Annexure
Questionnaire
1. What is your Gender?
 Male
 Female
2. What is your Age?
 15-25
 26-36
 36-45
 Above 45
3. What is your Profession?
 Student
 Salaried
 Entrepreneurs Senior Citizen
 Others
4. What is your Income Range?
 1000-5000
 5000-20000
 21000-35000
 36000-50000
68
 51000 & above
5. Do you carry Plastic Money?
 Yes
 No
6. Which Type of plastic money?
 Credit Card
 Debit Card/ATM
 Specific Outlet Card
7. Which is most convenient way to pay?
 Cash
 Card Plastic Money
8. Why your Preference is towards Plastic Money?
 Security
 Convenient
 To do not carry paper money
 Less risk (like theft) involved compared to paper money
9. Plastic Money is safest mode of transaction?
 Yes
 No
69
10. What Potential issues faced by you while using cards?
 Lack of trust while making transaction
 Unacceptability at retail outlet
 High Interest rate
 Complexity of Terms and conditions of bank
 Technology Linkage issue
11. What do you think about Future prospect of plastic money?
 Rapid Growth
 Steady Growth
 Stagnant
 Can't predict
 Decline
12. Reason behind using plastic money?
 Handy money
 To avail different offer
 More credit line option
70
Chapter 10
Bibliography
 Hayashi. Fumiko and Elizabethe Klee. (2003). Technology Adoption and
Consumer Payments: Evidence from Survey Data. Review of Ne! Work
Econom17c.s‘. 2(2). June.
 Bansal. N. K. (2006). Plastic Card Currency — A Convenient Mode of
Payment, The Indian Banker. March. pp. 86-89.
 Sarangapani, A. and T. Mamatha. (2008). The Growing Prominence of Debit
Cards and Credit Cards in the Indian Banking Industry. Marketing Maslern-
2irza', 6, J unc, pp. 63-66.
 4.http://usconsumersplace.com/credit-cards-plastic-money-never-saw-it-
better-in-india-than-now/
 5.http://www.wisdomtimes.com/blog/plastic-money-pros-and-cons/
 6.http://theglobaljournals.com/paripex/file.php?val=november_2012
 7.http://blog.cardback.in/2014/06/04/use-plastic-money-over-cash-dont-act-
mean-be-green/
 8.http://www.freepatentsonline.com/article/Asia-Pacific-Business-
Review/198547969.html
 9.http://timesofindia.indiatimes.com/city/kozhikode/Reserve-Bank-of-India-
to-introduce-plastic-money-on-pilot-basis/articleshow/14723553.cms
 10.http://timesofindia.indiatimes.com/india/Card-payment-may-soon-be-
mandatory-for-5-star-bills/articleshow/46436750.cms
71
 11. http://timesofindia.indiatimes.com/tech/tech-news/E-commerce-gives-a-
boost-to-credit-cards-in-India/articleshow/45449307.cms
 12. http://www.business-standard.com/article/finance/plastic-money-grew-2-
1-in-september-113102501014_1.html
 13. http://www.business-standard.com/article/finance/plastic-money-gains-
acceptance-in-rural-india-113071000766_1.html

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  • 1. A PROJECT REPORT ON A STUDY OF FACTORS INFLUENCING CONSUMER BEHAVIOR TOWARDS USE OF PLASTIC MONEY SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR MASTER OF MANAGEMENT STUDIES TO UNIVERSITY OF MUMBAI BY NIKHIL D’SOUZA ROLL NO. 2014035 2014-2016 UNDER THE GUIDANCE OF DR. GOWRI SHANKAR LALA LAJPATRAI INSTITUTE OF MANAGEMENTMAHALAXMI, MUMBAI – 400 034
  • 2. DECLARATION I hereby declare that this dissertation submitted in partial fulfillment of the requirement for the award of MASTER OF MANAGEMENT STUDIES (MMS) of the University of Mumbai is my original work and has not been submitted for award of any other degree or diploma fellowship or other similar title or prizes. I further certify that I have no objection and grant the rights to LLIM to publish any chapter or project if they deem fit in journals or magazines and newspaper etc. without my permission. NAME: NIKHIL D’SOUZA CLASS: MMS II SEM IV BATCH: 2014-2016 ROLL NO.: 2014035 DATE: 10th MARCH, 2016 PLACE: MUMBAI SIGNATURE (NIKHIL D’SOUZA)
  • 3. PROJECT GUIDE CERTIFICATE FORM I Mr. Nikhil D’souza, the undersigned Roll No. 2014035 studying in the Second Year of MMS is doing my project work under the guidance of Dr. Gowri Shankar wish to state that I have met my internal guide on the following dates mentioned below for Project Guidance:- SR. NO. DATE SIGNATURE OF THE INTERNAL GUIDE ______________________ ______________________ Signature of the Candidate Signature of Internal Guide
  • 4. Certificate This is to certify that the dissertation submitted in partial fulfillment of the requirement for the award of MMS of the University of Mumbai is a result of the bonafide work carried out by Mr. Nikhil D’souza under my supervision and guidance. No part of this report has been submitted for award of any other degree, diploma fellowship or other similar titles or prizes. The work has also not been published in any scientific journals/ magazines. DATE: 10th MARCH 2016 NAME: NIKHIL D’SOUZA PLACE: MUMBAI ROLL NO.: 2014035 ------------------------------ --------------------------- DR. V. B. ANGADI DR. GOWRI SHANKAR (DIRECTOR, LLIM) (PROJECT GUIDE)
  • 5. ACKNOWLEDGEMENT This project has been a great learning experience for me. I take this opportunity to thank Dr. Gowri Shankar my internal project guide whose valuable guidance & suggestions made this project possible. I am extremely thankful to him/her for his/her support. He/She has encouraged me and channelized my enthusiasm effectively. I express my heart-felt gratitude towards my parents Stanislaus D’souza and Hilda D’souza, siblings and all those friends who have willingly and with utmost commitment helped me during the course of my project work. I also express my profound gratitude to Dr. Angadi, Director of Lala Lajpatrai Institute of Management for giving me the opportunity to work on the project and broaden my knowledge and experience. My sincere thanks to Prof. Deepa Rohit for her valuable guidance and advice in completing this project. I would like to thank all the professors and the staff of Lala Lajpatrai Institute especially the Library staff who were very helpful in providing books and articles I needed for my project. Last but not the least, I am thankful to all those who indirectly extended their co- operation and invaluable support to me.
  • 6. EXECUTIVE SUMMARY In the last half of the twentieth century, payment cards, credit, debit, and charge cards have quietly revolutionized how we pay for goods and services. It is increasingly common to find merchants who do not take cash or cheques and increasingly rare to find merchants who refuse payment cards. Payment cards have also revolutionized how we coordinate the timing of when we purchase goods and services and when we pay for them. The popular media often focus on how credit cards is making it much quicker and easier to borrow, encourage people to spend beyond their means and get mired in debt.. Credit cards enable them to do so The project report aims to study, “A Study of factors affecting on consumer behavior towards use of plastic money” in Mumbai region. The study also shows the influencing factors for the usage of plastic money, the problems faced by respondents using plastic money and customers attitude towards plastic money. The sample was decided on the basis of Convenience Random Sampling method. Data was collected from the Primary Sources as well as Secondary Sources. The responses were collected by conducting structured close ended questionnaire consisting of Customers from Mumbai city. The questions which were asked have been designed in such a way so as to bring out the most favorable data, which will enable the study to get to the closest vicinity of its objectives. The data collected from the questionnaire has been analyzed and has been interpreted in a meaningful way to offer some suggestions and recommendations on improving performance.
  • 7. INDEX SR. NO. CONTENT PAGE NO. 1 INTRODUCTION & RESEARCH METHODOLOGY 1 2 REVIEW OF LITERATURE 27 3 PRODUCT PORTFOLIO 34 4 MARKET COMPETITORS 44 5 DATA ANALYSIS 47 6 FINDINGS 64 7 CONCLUSION 65 8 RECOMMENDATIONS 66 9 ANNEXURE 10 BIBLIOGRAPHY
  • 8. 1 Chapter 1 Introduction to Plastic Money Plastic money or polymer money, made out of plastic, is a new and easier way of paying for goods and services. Plastic money refers to credit cards, you use them whenever you want and pay later (with interest, of course). It makes it too easy for people to buy things they normally could not afford, which makes it easier to get into debt. It is a slang phrase for credit cards, especially when such cards used to make purchases. The "plastic" portion of this term refers to the plastic construction of credit cards, as opposed to paper and metal of currency. The "money" portion is an erroneous reference to credit cards as a form of money, which they are not. Although credit cards do facilitate transactions, because they are a liability rather than an asset, they are not money and not part of the economy's money supply. 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.
  • 9. 2 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 (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
  • 10. 3 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. Use Plastic Money over Cash. Don’t act mean – Be Green! Plastic money has played a pivotal role in the economic growth of India. Over the years, plastic money has managed to make it to almost everyone‘s wallet and has thus changed the way of spending. User friendliness and feasibility are the main features of plastic money that have made plastic money popular not only in India but also all over the world. Apart from this, use of plastic money instead of cash also helps in saving trees and thus creates an eco-friendly environment. Plastic money thus is an integral part of modern India and the percentage use of plastic money is increasing day by day. At the end of 2012, approximately 29% of the Indians had plastic money whereas this figure increased from 29% to 36% at the end of 2013. If the pundits are to be believed, approximately 44% of the Indians will have plastic money at the end of 2014. The advantages that plastic money brings are immense and therefore ―Plastic Money use karega India to smart banega India‖ — credits Big Bazaar.
  • 11. 4 Plastic money is growing because of the various advantages and various features it provides. Some of the pros are enlisted below –  Convenience — Credit and debit cards offer no-hassle shopping – no cash, no checks, no additional identification.  Security — cash which has been lost can be used by anyone. If you lose a credit or debit card, you can call 24.7 helpline number and report to the bank and thus get protected from unauthorized use of your card. However, different banks may have different liability policies, consult your bank if they offer any liability waiver.  Emergency Protection — A credit card will get you through almost any emergency you can think of. It‘s like a security blanket that will cover you for e.g. airline insurance, life insurance etc depending upon the credit card.  Universal Acceptance — Most credit and debit cards are accepted worldwide. Try that with a personal check! If you need cash, you can make withdrawals from ATMs or banks around the world that accept your credit or debit card.  Simplified Record Keeping — Credit and debit cards give you a record of all your transactions for the month, so keeping track of where your money goes is easier.  Hygienic — Paper money is dirty and unhygienic as it travels from one person to another whereas on the other hand plastic money usually remains with 2.3 individuals maximum therefore it is clean and hygienic.
  • 12. 5  Environment Friendly — One of the major causes of deforestation is paper and this is where plastic money is better than paper money as it reduces deforestation.  Value-Added Benefits — Many credit cards offer rebates, cash refunds, contributions to your favorite charity, or other special value-added benefits that you won‘t get with paying by cash. You can use Cardback android app to see offers and rewards on your credit, debit, prepaid and loyalty cards. Plastic Money never saw it Better in India than Now! India has come out of self-binding shackles to look "young" again and the enthusiasm shared by the young work force of the country is driving the economy like never- before. 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. It will not be wrong to say that such a scenario in context of the Indian market is not driven by style statement and is driven more by needs. The benefits of plastic money have offered unmatched ways to create equilibrium and offer an amicable solution when it comes to purchases and the inability to possess or carry cash. The modern day Indian customers find it easier to make physical payment (credit card payments) rather than carrying too much cash. The introduction of credit card facilities to pay for mobile, electricity, movie tickets and other related transactions have also contributed to the growth of plastic money in the country.
  • 13. 6 Best credit cards (India) In context of the Indian market, the leading credit card service providers are ICICI, HDFC, HSBC and Standard Chartered to name a few. These financial institutions have tried their hands on ensuring value-addition while offering customer-friendly credit card deals. 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. Statistics have clearly revealed that the numbers of credit card holders in India are close to 22 million as of January, 2007. It has been also revealed that the increasing consumerism in the country has led to a two-fold increase in the number of credit card transactions from FY 2003-04 to 2005- 06. The trends were as favorable as ever in the financial years, FY 2006-07 and 2007- 08 and the same. The credit card system started in India While the first card was issued in India by visa in1981 and country first gold card was also issued from the same. The first international credit card was issued to a restricted number of customers by Andhra bank1987 through the visa programme, after getting through special permission from RBI later the AZN credit cards came in 1989. However the credit card industry in India grown exponentially in its 15 years of business in the country it had issued 2.69 crores card till December 2003. However in just one year 2004, the figure has spurted to 4.33 crores.
  • 14. 7 RBI Guidelines on credit card operations The reserve bank of India has placed draft guidelines on credit card operation from the members of the public. The guidelines, when finally issued would be applicable to all commercial banks/non-commercial finance companies (NBFC‘s) and would come to effect as soon as implemented. It may be recalled that the Reserve bank had constituted a working Group to evolve a regulatory mechanism for cards to ensure orderly growth of this segment of consumer credit and protect the interest of banks / NBFC and their customers. The report of the group was placed in public domain on April 23, 2005. The draft guidelines issued now have been framed taking into account the feedback received from media, member of the public and other on the report of the working Group. The draft guidelines are as each Bank /NBFC has a well documented policy and a fair practices code for credit card and should widely disseminate contents. Targeting the Customers Currently, there is lack of awareness among potential cardholders, which is likely to stifle card growth. Most of the banks are relying on freebees and bundle of services like free accident policy, special shopping offers, purchase protection and add-ons like additional cards for family members of the cardholder to woo customers. The smart ones like HSBC are offering very high credit limit to tap customers. Last month, HSBC launched `Maha' card `with jyada power' which offer customers 25 % higher credit limit than the limit on any other credit card held by the cardholder.
  • 15. 8 In order to track the 4 million potential customers presently untouched by the `plastic money' is immense. The only solution is to expand geographical coverage, which is tricky for the simple fact that Visa and MasterCard have distinct skews towards metros. Only banks, which penetrate the Indian countryside, will be able to stand the test of the time. For present, consumer is definitely the king. The How's & Wherefores of Plastic Money Not all credit cards are created equal. In fact, they can be as individualist as the people who use them. So when you're trying to find the best one for your individual needs, it can get very confusing very fast. Fortunately, there are lots of online credit card clearing house type companies who help you do the research and save you time, money and headaches. Just as with everything in life, a little homework goes a long way. It behooves us all, in this fast- becoming-cashless-society. To familiarize ourselves with the businesses that provide this credit card screening service; a short visit is a real eye-opener when you see how much is out there in the way of plastic money. There are low-to-no interest credit cards, secured credit card, airline mile cards, cards that offer rewards in the form of cash back bonuses on your purchases (or in other forms, such as points), cards with no annual fee, cards with different rates and terms - the list is almost endless. Do your homework and choose well After you've figured out which card is right
  • 16. 9 It's almost imperative these days to have a credit card and break it out now and then. Those who do not will have a low credit rating or none at all. And since you may well have to depend on your credit rating one day for something important, using credit cards wisely makes very good sense. Let's say you stumbled on a fantastic deal for a house. You weren't planning on it, but it would be a real opportunity lost if you couldn't take advantage of it. You go for a loan. The first thing your potential creditors want to know is whether you are capable of repaying your debt. They'll look at your job, how much overhead you have, where you live now, and all kinds of factors. And they will definitely get your credit rating. This one number alone carries a heavy weight in a creditor's mind. In fact, it could easily make or break the deal of a lifetime. Use your credit card wisely, not frivolously, and you will build the strength of your credit history with every purchase and payment. Credit card companies love to rake in the late fees and raise interest rates when you fall behind. Being aware of these pitfalls is part of being a responsible adult these days. Building a good credit card payment history is part and parcel of good financial sense. You don't need to maintain a zero balance. In fact, a balance can demonstrate, to your benefit that you're able to borrow and pay back on a regular basis. Just keep the balance low. Take responsibility for your credit, and it will be there for you and your family when you really need it.
  • 17. 10 Plastic money grew 2.1% in September Business Standard, October 25, 2013 Slowdown is resulting in consumers using less plastic money. Credit card dues for the banking sector grew 2.1 per cent year-on-year in September from 21.8 per cent a year ago, showed Reserve Bank of India (RBI) data released on Friday. During the first half of this financial year jewellery, consumer goods and travel have not grown significantly. These are where credit card usage is high. Because of the depreciation of the rupee, many postponed or cancelled travel abroad. Also, the incremental spends on garments, mobile phones and other consumer goods have been low in the first six months. RBI came down heavily on jewellers. All these probably contributed to slow growth in the outstanding credit card book," said a banker in charge of retail business of a private sector lender. Bankers also cautioned there could be a further impact on credit card spends following RBI‘s decision to ban zero per cent equated monthly installments schemes. However, the personal loans segment grew 18 per cent in September compared with 13 per cent in the same period a year ago. Consumer durable loans grew by 37.9 per cent compared with 10.6 per cent earlier. While housing loans grew by 20 per cent compared with 11.3 per cent a year ago. However, vehicle loans grew by 23.1 per cent compared with 24.8 per cent earlier. Banks have launched schemes to promote housing and vehicle loans in the festive season. These include marginal reduction in interest rates and waiver of processing charges.
  • 18. 11 On a year-on-year basis, non-food bank credit increased by 18.2 per cent in September as compared with the increase of 15.9 per cent in September 2012. Credit to industry increased by 17.6 per cent in September as compared with the increase of 17.0 per cent September 2012. Acceleration in credit growth to industry was observed in all the major sub-sectors, barring engineering, construction, glass and glassware and mining and quarrying. However, credit to agriculture increased by 13.2 per cent in September as compared with the increase of 19.6 per cent in September 2012. Credit to the services sector increased by 22.1 per cent in September compared with an increase of 14.4 per cent in the same period last year. While credit to Non Banking Financial Companies (NBFCs) increased by 26.6 per cent in September compared with an increase of 28.4 per cent in September 2012. Plastic money gains acceptance in rural India Plastic money is gaining acceptance in rural India. HDFC Bank, the second largest private lender in the country, has started offering credit cards even at its rural branches. Bank branches in areas with a population of up to 9,999 are classified as rural branches. On an incremental basis, nearly 25 per cent of HDFC Bank‘s credit cards are now sourced from rural and semi-urban markets even as 40 per cent of Indian population is believed to be in want of a bank account. The bank has started setting up point-of-sale (POS) terminals across merchant establishments in these geographies to encourage customers to use credit cards.
  • 19. 12 ―The potential for growth is significantly high in smaller markets since the penetration of credit cards in these areas is relatively low. In the last couple of years, we have increased our investments on the acquisition side and are expanding the number of POS terminals in rural and semi-urban locations,‖ Parag Rao, senior executive vice- president and business head for credit cards and merchant acquiring services at HDFC Bank, told Business Standard. He added HDFC Bank was now offering credit cards, along with other retail banking products across most of its branches in rural and semi-urban centres. ―We aim to cover all locations where we have branches. All our rural and semi-urban branches, barring a few that have started functioning recently, are offering credit cards to the bank‘s customers,‖ Rao said. The bank currently has more than half of its 3,062 branches in rural and semi-urban markets. The private lender opened 518 branches in 2012-13 of which 459 were in these markets. HDFC Bank is currently the largest issuer of credit cards in the country with a portfolio of 6.53 million cards. On an average, it issues around 70,000 cards every month. Most banks and credit card companies currently do not offer credit cards in rural geographies. However, lenders are exploring opportunities to grow this business outside metro cities. ―Smaller markets are becoming important both in terms of card acquisition and spend. The credit card business is no longer restricted to the top eight Indian cities. While the number of POS terminals have not increased significantly in smaller towns, e- commerce is gaining popularity. We find many of our customers from these centres are increasingly using their credit cards for online transactions,‖ said Jairam
  • 20. 13 Sridharan, senior vice-president and head of consumer lending and payments at Axis Bank. The private lender is yet to expand its credit card business in rural India but nearly 30-40 per cent of its incremental card sourcing is currently from locations outside the top eight Indian cities. The bank has a portfolio of 1.1 million credit cards. Plastic Money Advantages and Disadvantages Technology has changed the way we deal with money giving us more convenience and easy access to funds from anywhere. It all started with a simple credit card that allowed you to make purchases today and pay later. Further, technological advancements lead to a new trend where most banks gave you one ATM card or debit card which can be used for withdrawing money as well as for making purchases or payments – offline as well as online. However, plastic money has its share of issues that one must be careful about. Plastic money definitely provides an alternative in some cases and compliments cash as a medium. Convenience of Plastic Money Since he may require a lot of cash for inter-city travel which can span a few days or weeks he preferred to use his debit card or credit cards. For instance he could use his card to pay for hotel stays where cards were commonly accepted. Similarly for travel he could book tickets online, while for food he had to rely on cash. However, with his debit card he could withdraw cash whenever required which made his life easier. Even if he forgets to carry cash he can use his debit card to withdraw funds whether required.
  • 21. 14 Advantages of Plastic Money There are several advantages of plastic money as seen in the above illustration. The advantages include 1. Eliminates the need for carrying huge cash: This eliminates the need for carrying huge load of cash which is risky and inconvenient too. 2. Risk of Loss or Theft minimized: In case of cash there is a high risk of losing cash and a chance of cash getting stolen. However, in case of debit/credit card you can report the matter to the bank and block the card to avoid misuse. 3. Anytime/Anywhere Access using cards you have the unique advantage and convenience of using it anywhere in the country or even abroad. 4. Credit Facility: In case of credit card you have the option of buying on credit or paying later. Although the charges are high, it helps you in case of emergencies and contingencies. 5. Online Payments: You can use cards for online payments, fund transfers and various other transactions. Disadvantages of Plastic Money So far I‘ve been sounding like a nice, pleasant Bank Executive who is convincing you to open an account. Please note a few points before we look at the disadvantages of plastic money  Cards/plastic money is not a complete replacement for cash  Use of cards can also be risky in some cases
  • 22. 15 Some of the drawbacks or risk related to cards are 1. Non-Acceptance at Small Retail Outlets Unless you are a person who shops only in supermarkets and hypermarkets you will be forced to use cash 2. Cannot be used for all daily needs You cannot pay your milkman, servant, paper wala (newspaper guy), etc by card. 3. Loss & Misuse Once a card is lost you have to immediately report it and get the card blocked to avoid misuse. Sometimes when you are not aware that you lost the card….the chances of misuse is higher. 4. Low Value Transactions As discussed above already there are cases where small and medium sized retailers don‘t accept cards for low value transactions (say less than Rs.200 or other criteria). You may have noticed this even in case of outlets like petrol bunks or restaurants. 5. Service Charges In some cases the outlets charge additional service charges for cards. So this can be another burden on your pocket. 6. Damage to Card Sometimes the card‘s magnetic strip gets damaged or scratches or cuts can render the card unusable. So keeping it safe and secure is very important.
  • 23. 16 7. Carrying or Keeping the Card Keeping the card and cash in the wallet together is like ―inviting trouble‖. This is the way everyone (including me) used to carry cash and cards. But this means once you lose your wallet you lose everything. So here the card doesn‘t come to your rescue after losing cash. The best practice is to keep cash and cards separately so that if you lose one you have the other to bank upon. By the way, nowadays I don‘t carry cards in my wallet. It‘s mostly in the bag or sometimes in a different pocket. You can try this or other methods but ensure that you don‘t keep everything in one place and lose it all. Now that we have a clear idea of some of the drawbacks of credit and debit cards lets also look at some key points on how to strike a balance between use of cash, cards and control your spending habits. 9. Impulsive Purchases Don‘t yield to impulsive purchases. Try to see what real benefit or value are you getting from the purchase. If you can‘t live without it you can postpone or keep the spending on hold. 10. Peer Pressure It‘s okay to spend some money on entertainment, outing, fine dining, etc. once in a while (say once or twice a month). But if you do it every week on instance of your friend, colleague, etc you will have not savings every month end. Your future financial planning is out of question if you live from pay cheque to pay cheque.
  • 24. 17 So it‘s time to become smart and avoid unnecessary wasteful expenditure. Sometimes you may have to attend a few parties, dinner/lunch activities, etc but prioritize and attend only the ones which are important and add value to you. For others you can say sorry and avoid or try to finish it over a simple coffee. 11. Overuse of Cards I find that people who are finding cards as a convenient medium try to use it everywhere – left, right and center. Further, they have 3-4 cards which are used one after the other at different places. I would advise them to have fewer transactions so that it is easier to keep a check on the transactions every month and easier to pay the bill as well. 12. Special Offers, Discounts Some people have this fancy and think that they are smart when they get special discounts on cards at retail outlets. Do you think the card company and the retail chains are so kind enough to serve you at a discount. They want you to loosen your purse and spend more so that they can laugh all the way to their bank.
  • 25. 18 Future Scenario of Plastic Cards Market in India The use of plastic cards in India has no doubt in rise from last few years but there is still a great potential left for the bankers to introduce more attractive services in order to lure the customers on one side and increase their profits on the other. Some aspects or facts (organized from various studies and articles) which are contributing to the growth of plastic cards market and also indicate its growth in the near future are discussed below:  The credit card companies say that consumers spend Rs 50,000 crore annually which is expected to grow at 50% over the next 4-5 years since 2007 (Economic Times, 19 September 2007).  According to CLSA Report, the estimated credit card base in India till 2020 will be 127 million as compared to 23.1 million in 2007.  The number of debit and credit card users in India is anticipated to reach 73.4 million and 406 million by the year 2010 and 2011. (4)  According to an RBI announcement, by April 2009, bank customers will able to use their ATM cards to withdraw cash from any automated teller machine installed by various commercial banks across the count and too free of cost. (5)  According to a new RBR report on Global ATM Market and Forecasts Till 2011, India is likely to invest heavily in ATMs till 2011.  Leading Indian banks are said to target a ratio of 1: 2.5 for bank branches v/s ATMs by 2012. This means the number of ATMs will grow to around 1.75 lakh, assuming the number of branches remains at the same level (The Hindu Business Line, 29 November 2007).
  • 26. 19  Now a number of non-banks in collaboration with/without banks are planning to issue both, limited or multipurpose prepaid cards. (6)  In late 2007, most of the companies had announced plans to convert their credit/debit cards to smart cards by replacing the magnetic stripes in them with computer chips and incorporating latest encryption technologies. So it would not be long before smart cards established themselves in India (Arunachalam L. and Sivasubramanian M., 2007).  A few non-banks have also entered the domain of providing various services like provision of infrastructure e.g., shared ATM networks POS terminals, cheque processing centresetc which will lead to enhance the potential of plastic cards market (Arunachalam L. and Sivasubramanian M., 2007).  A joint venture between Life Insurance Corporation of India (LIC) and GE Money is likely to launch its first credit card product in 2009 which will be offered only to LIC customers and policy holders (Vardhaman, 2008).  In another positive development, ABN AMRO with India's travel portal MakeMyTrip.com launched a distinctive cobranded credit card, 'Go Card' in 2008. The card offers special reward benefits and good range of travel-related promotions and packages (Vardhaman, 2008).  Banks in India are looking at deploying biometric ATMs targeted to reach the unbanked population in rural India. Using thumbprint and voice guidance in ATMs reduces literacy requirements to a considerable extent. Thus, establishing the identity of a rural depositor through biometrics makes it possible for illiterate or barely literate people to become part of the banking user community (Murali D. and Jaishankar P., 2007).
  • 27. 20  There are already 1.6 million customers using smart cards banking solution and that figure will go up to 4 million by the end of March 2009 and will reach to 25 million in 5 years Hence, the future prospects of plastic cards in India are bright enough to bring paradigm change in its popularity among customers as well as banks. Also, plastic money has immense opportunities in a growing economy like India. All types of banks whether public, private or foreign are contributing positively towards the development of plastic cards in India. Until now, the growth and usage of plastic cards has been seen more in urban areas due to existence of more literate people, better infrastructure facilities and proper awareness as compared to rural areas. The rural people can only understand their regional language and most of them are even illiterate who are least aware about the usefulness of plastic cards. Moreover, there is lack of adequate infrastructure to push the development of cards and induce more innovation. Thus, most of the banks have now planned to expand aggressively into rural India, where about 60% of the population lives, using an innovative system based biometric cards through which customers will be able to do will be able to do any time anywhere banking on their own (David R., 2007) The rise in consumerism generated by economic reforms began in 1990's has also sparked robust demand for plastic cards. The arrival of malls, multiplexes, online shopping stores and shopping complexes encourage the customers to make use of plastic cards. The modern day, Indian customers find it easier to make physical payment (credit card or debit card payments) rather than carrying too much cash contributing to the growth of plastic money in the country. The prevalence of intensifying competition has further fuelled the
  • 28. 21 usage of plastic cards in the country like never-before. It benefits the consumer through enhanced product offerings at a lower cost and that too with lucrative deals delighted with rewards scheme, loyalty bonus points, promotional campaigns etc. This has been a very welcome change and the contribution of all the players is very important to continue the momentum (Parul, 2008). However, operational risk involved with the usage of plastic cards like chances of fraud, card damage etc. plays the negative part too (Retail Payment System, 2004). Moreover, some customers are not able to utilise cards effectively due to its complex nature and they don't actually know how to operate it for specific purpose. Thus, the banks should give them some training regarding its usage. The banks can also provide them facility to use plastic cards on trail basis so that they can become more confident while using their own cards. Cost has also remained an issue in case of credit cards. The interest levied on outstanding amount is very high which sometimes takes the customers in debt trap ultimately discouraging the potential customers to make use of it. However, all these hurdles will diminish over time and positively influencing trends are expected to continue in the near and far-future. Also, the growth of plastic cards in future would depend upon the capacity building of the banks to meet the challenges and make use of the opportunities profitably. However, the kind of technology used and the efficiency of operations would provide the much needed competitive edge for success in plastic cards business. Furthermore, in all these customers' interest is of paramount importance (Gopinath S., 2005).
  • 29. 22 E-money: the future of cash We may not be that far away from a world where cash follows the cheque book into oblivion and few transactions are conducted face to face. There are in excess of 20 billion payments of less than £10 made every year; they could all go cashless. E-money comes in three forms, two of them specifically creations of the internet. First, there is the "card not present" phenomenon, where you have sufficient faith in the online retailer – nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your payment card details on to a web page. You and the "shopkeeper" never actually meet, and you never leave your home or office. Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic card – to being a purely virtual commodity (though of course banks themselves have long held your current account in virtual form, as a series of binary codes in a computer file). Second, we have seen the growth of outfits specifically set up to facilitate payments on the web. Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765; Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133 million accounts and allows customers to send, receive and hold funds in currencies from the US dollar to the Polish zloty. The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards and their replacement by one single means of payment, which you just wave, possibly nonchalantly, at the shop assistant. This is what the "contact less" card
  • 30. 23 promises, so called because you don't even have to put it into a reader to buy something. The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000 guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard, and a "One Touch" contact less technology card. This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and conveniently with a single touch of their card against a reader instead of entering a PIN or signature, thus reducing the need to use and carry cash. In a Bourne- style nightmare, your every move and tiniest purchase will then be tracked by your bank and, if legislation allows, officialdom. Thus can "they" know about your purchase of The Independent, a flap jack and day trip to Tate Modern. Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life (they're trying this out in South Korea). Either way, you will be being monitored. Money is what money does, according to the old adage. And in the future, your money may even spy on you.
  • 31. 24 Objectives of the study  To study the usage pattern of plastic money among the consumers.  To identify the influencing factors for the usage of plastic money  To know the problems faced by respondents using plastic money.  To find out the customers attitude towards plastic money. Scope of the study The scope of the study restricted to the card user of the Mumbai city. For the collection of the primary data the study will be confined to Mumbai consumers only. Significance of the Study In this new era of technological advancements and virtual money, consumers still use currency notes at places of trade. This research will show the effectiveness of plastics cards over hard cash in the days to come
  • 32. 25 Research Methodology Research Design The study being undertaken is Descriptive in nature. The major purpose of descriptive research is description of the state of affairs as it exists at present, while studying the research problem, scientific method is followed. Sampling Techniques The convenience Random sampling technique was employed in the selection of the sample. Sampling Size The sample size was so selected that it could be adequate enough to represent the whole population, and also give the true picture. The total sample size was restricted to 150 consumers of Mumbai. The primary data was collected by administering structured questionnaire to the investors. Data Collection Method The data collection method for the study the researcher should keep in the mind the two sources of data. • Primary data • Secondary data.
  • 33. 26 Primary Data: Source of primary data:  Questionnaire Primary data has been collected through structured questioner. The questionnaire consisted of a variety of questions that lay consistent with the objective of the research. . Questionnaire The type of Questionnaire is form as Closed ended. The questionnaire was prepared keeping in view the objectives of study. Different questions were so arranged to know buying behavior of consumer who use plastic money provided by company. Secondary Data: Secondary data has been collected from the Newspaper, Research paper etc Limitations of the study The present study is based on the data collected from sample selected city Mumbai only and the result may vary from other regions of India or the national average.
  • 34. 27 Chapter 2 Literature Review Slocum, J. and L. Mathews (1970)', in their study ―Social class and income indicators of consumer credit beltaviot1t"‖ studied the influence of social and income variables on credit card selection and usage among cardholders in USA. They found that members of the lower socio-economic class tend to use their cards for installment financing much more than higher socio-economic classes. Upper classes tend to use their cards as a convenient method of payment. Lower classes showed more impulse buying than the middle class, who feels that they should save money and postpone purchases. The upper classes do not need to save and defer gratification, and since there is no reason for installments they use credit cards for convenience. It also showed that age, sex and marital status are the significant determinants of credit card selection and its usage. Mandel, L. (l972), in his research ―Credit card use in the US‖, found that primary determinants of credit card usage were family income and education of the cardholders. Higher income and better educated families were more likely to use credit cards than lower income families. This is because credit card was initially marketed to higher income people. Another finding of his research was that families living around the largest cities are more likely to use credit cards. This finding matches with the Greek cardholder‘s demographic profile, where a very high concentration of cardholders is observed in urban areas. He also found that families with different incomes perceived differently the advantages and disadvantages of credit cards. Lower and middle income families considered the credit facility as a
  • 35. 28 definite advantage, while high income families found safety and convenience to be definite advantages. Caskey, John P. and Gordon H. Sellon Jr. (l994)'3 in their article ―ls the debit card revolution finally here‗?‖, analysed the factors that have limited the debit cards success and examined the prospects for future growth. They also proposed that consumers who used credit cards for the benefit of having credit available were unlikely to be interested in debit cards. Most consumers based their decision of using debit cards on non-price factors such as convenience and availability. They suggested that convenience users of credit cards might find debit cards desirable because they did not need to write cheques at the end of each month to pay off credit card debits, and convenience users might find debit cards were helpful in controlling their spending since they could spend only what they had in their account. Delner, Ncjdet and Herbert Katzenstein (l994)l4, in their paper ―Card possession and other payment systems: Use patterns among Asian and Hispanic consumers‖, explored the socio-economic and demographic characteristics of Asian and Hispanic credit card holders. lt also outlined a conceptualization of the relationship between alternative payment systems and various demographic and behavioural variables, which may serve as a preliminary theoretical framework for analysis of payment systems. lt also discussed the implications and their importance to marketers. Worthington, Steve (l994)15, in the paper ―Retailer aspirations in plastic card and payment systems - An international comparison‖, seeks to focus attention on the power relationships between retailers and their suppliers of financial services. Using international example, it draws attention to the different ways in which retailers are seeking to enhance their position in the payment system supply chain. The economics of this supply chain are explained and the rationale behind the acceptance of payment
  • 36. 29 by plastic card is developed. Hypotheses are advanced; for each of international examples, as to how aspirations might affect the payment system, supply chain and the concluded that the balance of power is shifting from traditional payment system provides to the payment system users — the retailers. Puri, Vishal (l997) in his paper ―Smart cards — The smart way for the banks to go?‖, examined the many innovative smart card applications covering areas such as telecommunications, transport, banking, health care and employee/membership schemes. It looked at how the banks, financial service firms, information companies and card issuers are gradually re-conceptualizing their delivery strategy as well as their businesses to meet the growing need for remote delivery, brand equity and differentiation. Smart cards could act as payment vehicles, access keys, information managers, marketing tools and customized delivery systems. It also explored the possibilities of an electronic purse ranging from a possible stored value and to a re- loadable stored value card, which could literally replace low-value cash transactions. Smart cards would then become integral to the bank‘s concept of remote delivery system in the future, because smart cards are not just a product; they are a new delivery system. Besides, the paper" focused on some of the issues that might be of deeper concern to banks and suggests collaboration between banks and providers in the mass introduction of smart cards. Hayashi, Fumiko and Elizabeth Klee (2003)37 in their paper ―Technology adoption and consumer payments: Evidence from survey data‖ commented that payment choices depends consumers propensity to adopt new technologies and nature of transactions. This paper also analyzed the use of consumer payment instrument at the point of sale. It is indicated that consumers who use new technologies and computer
  • 37. 30 are more likely to use e-payment instruments such as debit cards, credit cards, smart cards etc. Bansal, N. K. (2006)'4 in his article" Plastic card currency — A convenient mode of payment", explained the role of plastic money, its various forms and the positive impact of plastic money on the lives of people of all walks of life and being accepted as a convenient mode of payment in the modern era of electronic technology driven commerce. Sarangapani, A. and T. Mamatha (2008)77 in their article ―The growing prominence of debit cards and credit cards in the Indian banking industry‖, highlighted the growing prominence of debit and credit cards by giving necessary statistics, comparative features of both cards and also pointed out more popularity of debit cards than credit cards. Initiative taken by Reserve Bank Of India Reserve Bank of India to introduce plastic money on pilot basis The Reserve Bank of India (RBI) is planning to introduce plastic currency on a pilot basis as it has been proven to be economical and environment-friendly when compared to paper currency, said RBI governor D Subbarao here on July 6, 2012. "We contemplated introducing plastic currency 15 years ago, gave it up and now we are trying to do this again as a pilot experiment. A lot of research analysis has gone into this about the cost and acceptability. Plastic currency is proven to be economical and would probably save us money," he said while speaking at the inauguration of the new Post Graduate Programme (PGP) batch at the Indian Institute of Management Kozhikode (IIM-K) on Friday.
  • 38. 31 "We got a study done by the Centre for Environmental Studies in Nagpur and they have verified and told us that the carbon foot print of plastic currency is lower than that of paper currency," he said. Responding to recent criticisms from the corporate sector against the interest rate policy of the RBI, Subbarao said inflation cannot be controlled without sacrificing some growth. Card payment may soon be mandatory for 5-star bills Mar 3, 2015 NEW DELHI: Seeking to curb the use of cash for high-value transactions and check the flow of black money in the economy, the government may make it mandatory to undertake certain transactions — such as payment of hotel bills beyond a specified limit. "Several things are under consideration, for example incentisizing banks. you know there are transaction costs which government can perhaps share. But there are also otherwise, you know what I would say to disincentives cash transaction, any expenditure by a person in a five star hotel above Rs 5,000 have to be settled using credit card, there can be also decisions like that," finance secretary Rajiv Mehrishi told reporters at a press conference on Monday. Mehrishi's comments are just pointers to steps that may be offing as the final decision will be based on measures to be suggested by a committee that will come out with structures that can be put in place to encourage use of credit or debit cards. The statement comes two days after tough measures were announced in the budget to curb black money.
  • 39. 32 Finance Minister Arun Jaitley in his maiden full-year Budget had said the government will announce incentives to encourage card usage by consumers to curb black money flow into the system. Taking a cue from the Special Investigative Team on black money, the minister had said that he wanted to incentivise credit and debit card transactions, and disincentivise cash transactions. The SIT had suggested that the government should put a limitation on cash holdings for private use and including provisions for confiscation of cash held beyond prescribed limits. It had pointed to a number of European countries that bar any cash dealings above a particular limit but said that small transactions — which make a bulk of common man's daily transactions — should not be affected. E-commerce gives a boost to credit cards in India Dec 10, 2014 CHENNAI: With the resurgence in online shopping, use of credit cards to complete transactions is fuelling a surge in usage. Data from RBI states sequential growth in credit card spends in the country have grown 8% to Rs 44,980 crores during the first quarter ending June 30 2014 as against Rs 41,861 crores during the last quarter of 2013-14. Axis Bank has seen its average monthly credit card spends move up from Rs 400 crores during FY 13 to Rs 725 crores during FY 14. Moreover, during the second quarter of FY 15, the average credit card monthly spends were Rs 1,100 crores for the bank from Rs 650 crores a year ago.
  • 40. 33 "A lot of the e-commerce growth is through cards. Customers are getting confident about using chip-based cards too and the sense of security is on the rise," Jairam Sridharan, president, retail lending and payments, Axis Bank said. Similarly, HDFC Bank has witnessed a 30% year-on-year growth in second quarter. "Online e-tailing and bill payments and travel have been the main drivers," Parag Rao, senior executive vice president, business head, card payment products and merchant acquiring services, HDFC Bank said. For Kotak Mahindra Bank it's a 33% growth in card spends during the second quarter. "Growth in e-commerce spends coupled with growth in the commercial card spends are the main factors," Sumit Bali, executive vice president, Kotak Mahindra Bank said. Bali added that corporate cards have shown maximum spends growth both in year to date (April to November 2014 over April to November 2013) as well as during quarter two. "Companies are increasingly using this route of payment for convenience and reconciliation benefits," Bali said. The festive season too has played its role too. "A lot of consumer durable spends and electronic purchases have happened via cards this season. Banks too are putting in compelling festive offers in terms on cash back and tie-ups with merchants," Sridharan said. According to bankers, overall spends on credit cards (industry level) have moved up 25% year on year during FY 14 as against FY 13. The total credit cards in circulation as on March 2014 stood at 1.91 crores. "With the economy looking up, we expect the spends in cards would grow in future," Rao of HDFC Bank said.
  • 41. 34 Chapter 3 Product portfolio 1. Credit card A credit card is plastic money that is used to pay for products and services at over 20 million locations around the world. All you need to do is produce the card and sign a charge slip to pay for your purchases. The institution which issues the card makes the payment to the outlet on your behalf; you will pay this 'loan' back to the institution at a later date.
  • 42. 35 2. Debit card Debit cards are substitutes for cash or check payments, much the same way that credit cards are. However, banks only issue them to you if you hold an account with them. When a debit card is used to make a payment, the total amount charged is instantly reduced from your bank balance. A debit card is only accepted at outlets with electronic swipe-machines that can check and deduct amounts from your bank balance online.
  • 43. 36 3. Charge card A charge card carries all the features of credit cards. However, after using a charge card you will have to pay off the entire amount billed, by the due date. If you fail to do so, you are likely to be considered a defaulter and will usually have to pay up a steep late payment charge. When you use a credit card you are not declared a defaulter even if you miss your due date. A 2.95 per cent late payment fees (this differs from one bank to another) is levied in your next billing statement.
  • 44. 37 4. Amex card Amex stands for American Express and is one of the well-known charge cards. This card has its own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa. This card is typically meant for high-income group categories and companies and may not be acceptable at many outlets. There are a wide variety of special privileges offered to Amex cardholders.
  • 45. 38 5. MasterCard and Visa MasterCard and Visa are global non-profit organizations dedicated to promote the growth of the card business across the world. They have built a vast network of merchant establishments so that customer‘s world-wide may use their respective credit cards to make various purchases.
  • 46. 39 6. Smart card A smart card contains an electronic chip which is used to store cash. This is most useful when you have to pay for small purchases, for example bus fares and coffee. No identification, signature or payment authorization is required for using this card. The exact amount of purchase is deducted from the smart card during payment and is collected by smart card reading machines. No change is given. Currently this product is available only in very developed countries like the United States and is being used only sporadically in India.
  • 47. 40 7. Diners Club card Diners Club is a branded charge card. There are a wide variety of special privileges offered to the Diners Club cardholder. For instance, as a cardholder you can set your own spending limit. Besides, the card has its own merchant establishment tie-ups and does not depend on the network of MasterCard or Visa. However, since this card is typically meant for high-income group categories, it may not be acceptable at many outlets. It would be a good idea to check whether a member establishment does accept the card or not in advance.
  • 48. 41 8. Photo card If your photograph is imprinted on a card, then you have what is known as a photo card. Doing this helps identify the user of the credit card and is therefore considered safer. Besides, in many cases, your photo card can function as your identity card as well.
  • 49. 42 9. Global card Global cards allow you the flexibility and convenience of using a credit card rather than cash or travelers checks while travelling abroad for either business or personal reasons. 10. Co-branded card Co-branded cards are credit cards issued by card companies that have tied up with a popular brand for the purpose of offering certain exclusive benefits to the consumer. For example, the Citi-Times card gives you all the benefits of a Citibank credit card along with a special discount on Times Music cassettes, free entry to Times Music events, etc.
  • 50. 43 11. Affinity card The card issuer ties up with popular organizations/ institutions which are often non- profit organizations (City-WWF card or the Stan chart-Cricket cards) to offer an affinity card. When the card is used, a certain percentage is contributed to the organization /institution by the card issuer. 12. Add-on card An add-on card allows you to apply for an additional credit card within the overall credit limit. You can apply for this card in the name of family members like your father/ mother/ spouse/ brother/ sister/ all children above 18 years of age. Your billing statement would reflect the details of purchases made using the add-on card. You are liable to make good all the payments for the purchases made using the add-on card(s).
  • 51. 44 Chapter 4 Market Competition Credit / Debit Cards issued by Indian Public Sector Banks 2015 Bank Name Credit Cards Debit Cards Allahabad Bank 0 3992767 Andhra Bank 139813 10435400 Bank of Baroda 77879 21139326 Bank of India 130654 24015770 Bank of Maharashtra 36023 4833428 Canara Bank 106121 22691756 Central Bank of India 98986 13321518 Corporation Bank 52390 7687926 Dena Bank 0 4667212 Indian Bank 67202 14918675 Indian Overseas Bank 49925 8337243 Oriental Bank of Commerce 0 6807835 Punjab and Sind Bank 0 1517953 Punjab National Bank 139278 30275225 Syndicate Bank 71515 9689245 UCO Bank 0 5406108 Union Bank of India 76529 17110025 United Bank of India 0 4704772 Vijaya Bank 36687 4064543 State Bank of India 3009541 147521342 State Bank of Bikaner & Jaipur 0 8431631 State Bank of Hyderabad 0 12598295 State Bank of Mysore 0 4385210 State Bank of Patiala 0 6058503 State Bank of Travancore 0 9425152
  • 52. 45 By New Private Sector Banks in India 2015 Bank Name Credit Cards Debit Cards Development Credit Bank Ltd. 3701 194424 HDFC Bank Ltd. 5748412 20099155 ICICI Bank Ltd. 3279651 25214856 IndusInd Bank Ltd 320691 1861932 Kotak Mahindra Bank Ltd 486759 1442048 Axis Bank Ltd. 1587348 14880856 Yes Bank Ltd. 0 791211 By Old Private Sector Banks in India 2015 Bank Name Credit Cards Debit Cards IDBI Ltd. 0 7818631 Catholic Syrian Bank Ltd. 0 672057 City Union Bank Ltd 0 1394487 Dhanalaxmi Bank Ltd. 5556 740145 Federal Bank Limited 0 4307081 ING Vysya Bank 13128 1410777 Jammu & Kashmir Bank 42028 2138247 Karnataka Bank Ltd. 0 2424014 Karur Vysya Bank Ltd 0 3297371 Lakshmi Vilas Bank Ltd. 0 499463 Ratnakar Bank Ltd. 84048 293924 South Indian Bank Ltd 0 2778191 Tamilnadu Mercantile Bank Ltd. 6708 718317
  • 53. 46 By Foreign Banks Operating in India 2015 Bank Name Credit Cards Debit Cards RBS (ABN AMRO) 0 119152 American Express Bkg. Corp. 700813 0 Bank of America 2522 0 Barclays Bank 0 3729 Citibank 2384722 1526782 Deutsche Bank 0 80590 DBS Ltd. 0 21068 Firstrand Bank 0 64396 HSBC 497131 560291 Standard Chartered Bank 1107098 690800
  • 54. 47 Chapter 5 Data analysis and Interpretation Table 1 : Demographic Characteristics of respondents Demographic Number Percent Gender Male 79 52.66 Female 71 47.34 Age (Yrs) 15-25 25 16.67% 26-36 38 25.33% 36-45 45 30.00% 46 & above 42 28.00% Profession Student 28 18.67% Salaried (Office workers) 41 27.33% Entrepreneurs (Businessman) 49 32.67% Senior Citizen 15 10.00% Others 17 11.33% Income 1000-5000 10 6.67% 5000-20000 27 18.00%
  • 55. 48 21000-35000 51 34.00% 36000-50000 30 20.00% 51000 & above 32 21.33% Do the customer carry Plastic Money: Yes 89 59.33% No 61 40.67% Type of plastic money Credit Card 48 32.00% Debit Card/ATM 61 40.67% Specific Outlet Card 41 27.33% Most Convenient way to pay Cash 45 30.00% Card (Plastic Money) 105 70.00% Preference towards Plastic Money: Security 42 28.00% Convenient 62 41.33% Don‘t want to carry paper money 29 19.33% Less risk (like theft) involved compared to paper money 17 11.33%
  • 56. 49 Is Plastic Money the Safest mode of transaction? Yes 82 54.67% No 68 45.33% Potential Problem faced while using cards Lack of trust while making transaction 39 26.00% Unacceptability at retail outlet 32 21.33% High Interest rate 45 30.00% Complexity of Terms and conditions of bank 19 12.67% Technology Linkage issue 15 10.00% Future prospects of plastic money Rapid Growth 46 30.67% Steady Growth 31 20.67% Stagnant 38 25.33% Can't predict 20 13.33% Decline 15 10.00% Reasons behind using plastic money Handy money 120 79.30% To avail different offer 27 18.70% More credit line option 3 2%
  • 57. 50 Interpretation 1. What is your Gender? This pie diagram indicates the Gender wise proportion of the 150 respondents. Gender wise proportion of the Male respondents are more, .i.e. is 53% than the female respondents that is 47%. It states that Male consumer use more plastic money than the female consumer. Male 53% Female 47% Gender
  • 58. 51 2. What is your Age? This pie diagram indicates the various age group which are included in 150 respondents for data collection Age Group of 36-45 use more plastic money 30% followed by age group 46 and above 28% and 26-36 that is 25% and 15-25 that is 17%. 15-25 17% 26-36 25% 36-45 30% 46 & above 28% Age
  • 59. 52 3. What is your Profession? This pie diagram indicates the profession of 150 respondents. Profession wise the usage of Entrepreneur is more i.e. 33% if we compared with the Student, Salaried person, Senior citizen and Others that is 19%, 27%,10% and11% respectively. Student 19% Salaried 27%Entrepreneurs 33% Senior Citizen 10% Others 11% Profession
  • 60. 53 4. What is your Income Range? This pie diagram gives knowledge about the income level of the 150 respondents. Income Group of 210000-35000 uses more Plastic money that is 34% followed by 51000 and above (21%), 36000-50000(20%), 50000-20000(18%), 1000-5000(7%). 1000-5000 7% 5000-20000 18% 21000-35000 34% 36000-50000 20% 51000 & above 21% Income
  • 61. 54 5. Do you carry Plastic Money? This pie diagram gives the knowledge about the penetration of plastic money out of 150 how many customers are carrying plastic money. Out of 150 respondents 59% respondents like to carry plastic money and 41% they don‘t like to carry plastic money with them. Yes 59% No 41% Customers carry Plastic Money
  • 62. 55 6. Which Type of plastic money do you carry along? This pie diagram indicates the types of plastic money use by the respondents When 150 respondents were asked which type of Plastic money they used.41% Respondents says that they use Debit Card/ATM, 32% says that they use credit card and 27% respondents are using special outlet card. Credit Card 32% Debit Card/ATM 41% Specific Outlet Card 27% Type of Plastic money
  • 63. 56 7. Which is the most convenient way to pay? This pie diagram indicates the mode which is convenient to the consumer. From the above diagram we can say that 70% customers use plastic money for the convenience and 30% are still using cash because they think that cash is convenient way to do transaction. Cash 30% Card (Plastic Money) 70% Convenient way to pay
  • 64. 57 8. Why do you Prefer Plastic Money? This pie diagram indicates why consumers preferred plastic money for the transactions. The preference of 150 respondents for using the plastic money is describe in the above diagram.42% respondents says it is convenient,28% respondents says it is Secured, 19% respondents says they don‘t like to carry paper money and 11% respondents says it is helping in reducing the risk. Security 28% Convenient 42% don't want to carry paper money 19% Less risk 11% Preference
  • 65. 58 9. Plastic Money is the safest mode of transaction? This diagram indicate the consumers opinion about the safest mode of transactions whether it is safe or not. When we asked the respondents whether plastic money is safe or not 55% respondents says it is safe and 45% respondents say it is not safe. Yes 55% No 45% Safest mode of transaction
  • 66. 59 10. What Potential issues are faced by you while using cards? This pie diagram indicates the issues faced by the consumers while doing transaction through the plastic money. Out of 150 respondents 30% respondent‘s problem is high interest rate, 26% respondents says they are having Lack of trust while making transaction, 13% respondents says they face problem of Complexity of Terms and conditions of bank and 10% respondents say technology linkage issues they face while using the plastic money. Lack of trust while making transaction 26% Unacceptability at retail outlet 21% High Interest rate 30% Complexity of Terms and conditions of bank 13% Technology Linkage issue 10% Issues faced while using cards
  • 67. 60 11. What do you think about Future prospects of plastic money? This pie diagram indicates the future prospects of plastic money. From the above diagram Future prospects of the plastic money is predicted. 34% respondents says there is rapid growth, 28% respondents say it will be stagnant, 23% respondents say there will be steady growth and 15% respondents says they can‘t predict the future prospect. Rapid Growth 34% Steady Growth 23% Stagnant 28% Can't predict 15% Future prospects
  • 68. 61 12. Reason behind using plastic money? This pie diagram indicates the reasons why consumers are using the plastic money. Out of 150 respondents 80% respondents use plastic money because it is handy money easy to carry, 18% respondents use to avail the different offers which is on the specific products and 2% respondents use to get more credit line option. Handy money 80% To avail different offer 18% More credit line option 2% Reasons behind using plastic money
  • 69. 62 CHI- SQUARE TEST 1. Easy to use feature increase interest in plastic money Customer view % of respondents Handy money 79.3 To avail different offer 18.7 More credit line option 2 H0: There has been no significant relation between consumer usage and plastic card benefits. H1: There has been significant relation between consumer usage and plastic card benefits. Probability of benefits of cards =1/3. On the basis of this hypothesis the expected number of respondent‘s preference (E) =150/3= 50 EXPECTED AND OBSERVED RESPONDENTS O(Observed) E (Expected) 79.3 50 18.7 50 2 50
  • 70. 63 Chi-Square test or test= O(Observed) E(Expected) (Expected) O-E (O-E)2 (O-E)2 /E Handy money 79.3 34 29.3 858.49 17.17 To avail different offer 18.7 50 31.3 979.69 19.59 More credit line option 2 50 48 2304 46.08 TOTAL 100 150 82.83 Calculated value Degree of freedom(n-1) Tabulated value Chi-square 82.83 2 5.991 The table value of for 2 degree of freedom at 5% level of significance is 5.991. The calculated value of is much higher than this table value and hence we reject the hypothesis and accept H1, which provides sufficient evidence that card usage benefits has significant impact on consumer usage behavior. 79.3%, consumers‘ usage behavior is influenced by card benefits.
  • 71. 64 Chapter 6 Findings According to above data it has observed that around 80% of the people in south Mumbai carry plastic money mainly for two reasons i.e. security & convenience. Moreover it is easy to carry because it prevents carrying hard cash or large amount of money at the same time hence it reduces the possibility of theft, mainly high income middle class group prefer cards i.e. 43.75%. It is also an easy way to access the money just in case an individual requires the money on an immediate basis then he/she can withdraw the amount directly from the account without wasting much time in travelling but there are still 34.375% people who still don‘t feel safe while doing transactions through card
  • 72. 65 Chapter 7 Conclusion Plastic money is of great use in today‘s busy world and as far as time saving is concerned. Since paper notes are more risky than plastic money. The transactions take place in plastic money is very easy and customers are satisfied too. Whereas some individuals are not comfortable or don‘t want to use it as they feel that paper notes are safer than plastic money. People can take credit through plastic money i.e. credit card as and when required. It is also observed that there are frauds in plastic money some of them can be solved and some of them cannot be solved. The news related to plastic money demotivates the customers to use it because fraud cases are increasing day by day its mainly due to technology linkage issue which must be considered by the banks & IT ministry and try to update the IT laws for such cyber-crimes. Consumers prefer these cards mostly for shopping online E-commerce site which has given people a better medium to use the plastic money. As nowadays technology is growing rapidly, plastic money is very efficient tool for the customers as well as for the organizations. Plastic money saves lot of time of the consumers by reducing the waiting time at a crowded place. It also keeps track of records of transactions that can be referred by the customers at any point of time. It has also broken the barriers of problems like counterfeiting and duplication of notes. Customers don‘t need to carry cash while on a go as plastic money has reduced its stress of carrying cash and its dependency on banks. At last it is concluded that plastic money has a very bright future in the coming years because of the increasing trend of e-commerce.
  • 73. 66 Chapter 8 Recommendations Out of 150 respondents 89 respondents carry plastic money with them whereas 61 respondents don‘t carry plastic money which means 59.33% consumers are using plastic money whereas 40.67% are not using plastic money 59.33% consumer use Credit card, ATM/Debit Card and Specific outlet card but 40.67% are using ATM/Debit card followed by Credit card i.e. 32% and Specific card 27.33%. Organizations who offer plastic money should create awareness among all the Mumbai city customers that using credit card and other specific card will help them in making their life simple with quick transactions and thus avoid wasting time and energy, so that they will accept other cards and use it like ATM/Debit card. 59.33% consumer accepted the Plastic money for multiple use but 40.67% consumer did not accepted it due to High interest rate, lack of trust while making the transaction, unacceptability at retail outlet, Complexity of terms and conditions of bank and technology linkage issue. So every organization who offers plastic money to the consumer should more focus on the safety and security of the consumer and if in case any fraud activity is faced by the consumer then there should be some protection or any law in favour of the consumers which will help to prevent it next time.
  • 74. 67 Chapter 9 Annexure Questionnaire 1. What is your Gender?  Male  Female 2. What is your Age?  15-25  26-36  36-45  Above 45 3. What is your Profession?  Student  Salaried  Entrepreneurs Senior Citizen  Others 4. What is your Income Range?  1000-5000  5000-20000  21000-35000  36000-50000
  • 75. 68  51000 & above 5. Do you carry Plastic Money?  Yes  No 6. Which Type of plastic money?  Credit Card  Debit Card/ATM  Specific Outlet Card 7. Which is most convenient way to pay?  Cash  Card Plastic Money 8. Why your Preference is towards Plastic Money?  Security  Convenient  To do not carry paper money  Less risk (like theft) involved compared to paper money 9. Plastic Money is safest mode of transaction?  Yes  No
  • 76. 69 10. What Potential issues faced by you while using cards?  Lack of trust while making transaction  Unacceptability at retail outlet  High Interest rate  Complexity of Terms and conditions of bank  Technology Linkage issue 11. What do you think about Future prospect of plastic money?  Rapid Growth  Steady Growth  Stagnant  Can't predict  Decline 12. Reason behind using plastic money?  Handy money  To avail different offer  More credit line option
  • 77. 70 Chapter 10 Bibliography  Hayashi. Fumiko and Elizabethe Klee. (2003). Technology Adoption and Consumer Payments: Evidence from Survey Data. Review of Ne! Work Econom17c.s‘. 2(2). June.  Bansal. N. K. (2006). Plastic Card Currency — A Convenient Mode of Payment, The Indian Banker. March. pp. 86-89.  Sarangapani, A. and T. Mamatha. (2008). The Growing Prominence of Debit Cards and Credit Cards in the Indian Banking Industry. Marketing Maslern- 2irza', 6, J unc, pp. 63-66.  4.http://usconsumersplace.com/credit-cards-plastic-money-never-saw-it- better-in-india-than-now/  5.http://www.wisdomtimes.com/blog/plastic-money-pros-and-cons/  6.http://theglobaljournals.com/paripex/file.php?val=november_2012  7.http://blog.cardback.in/2014/06/04/use-plastic-money-over-cash-dont-act- mean-be-green/  8.http://www.freepatentsonline.com/article/Asia-Pacific-Business- Review/198547969.html  9.http://timesofindia.indiatimes.com/city/kozhikode/Reserve-Bank-of-India- to-introduce-plastic-money-on-pilot-basis/articleshow/14723553.cms  10.http://timesofindia.indiatimes.com/india/Card-payment-may-soon-be- mandatory-for-5-star-bills/articleshow/46436750.cms
  • 78. 71  11. http://timesofindia.indiatimes.com/tech/tech-news/E-commerce-gives-a- boost-to-credit-cards-in-India/articleshow/45449307.cms  12. http://www.business-standard.com/article/finance/plastic-money-grew-2- 1-in-september-113102501014_1.html  13. http://www.business-standard.com/article/finance/plastic-money-gains- acceptance-in-rural-india-113071000766_1.html