The presentation brief you about the technological advancement of payment method through out the world and status of India. More about recent changes in payment system, its effects on economy, possible threats, pros and cons of online system.

1. The growing use of plastic money (Debit, Credit, Gift
Cards and ATMs : Indian context
SANJAY KUMAR
Scientific Writer
Science Communicator
Former Rajat Jayanti Vigyan
Sancharak Fellow, DST
Email :
sanjaybsi.99@gmail.com

2. WHAT’s PLASTIC MONEY???
• Plastic money or polymer money,
made out of plastic
• It is a new and easier way of paying
for goods and services
• It include all types of plastic bank
cards.
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.
• Credit cards were invented 60 years back
• The Diners’ Club card, Introduced in New York City in 1950,
the card allowed Diners’ Club members to eat at 27 restaurants
in New York City on credit

4. Parties involved in Plastic Money
• Cardholder: The holder of the card used to make a purchase;
the consumer
• Card-issuing bank: The financial institution or other
organization that issued the credit card to the cardholder.
• Acquiring bank: The financial institution accepting payment for
the products or services on behalf of the merchant
• Merchant account: This could refer to the acquiring bank or the
independent sales organization, but in general is the organization
that the merchant deals with.
• Credit Card association: An association of card-issuing banks
such as Discover, Visa, MasterCard, American Express, etc. that
set transaction terms for merchants, card issuing banks, and
acquiring banks.

5. Types of plastic money :
• Cash Card or ATM Card
• Credit cards
• Debit cards
• Prepaid card or Cash Card
• Charge cards
• Smart cards
• Global cards
• Diners Club cards, etc.

6. RuPay payment gateway in India launched by the National
Payments Corporation of India (NPCI) on 26 March 2012.

7. Cash Card or ATM Card
• A card that will allow you to withdraw money
directly from your bank via an Automated Teller
Machine (ATM) but it will not allow the holder to
purchase anything directly with it.
• Unlike a debit card, in-store purchases or refunds
with an ATM card can generally be made in person
only, as they require authentication through a
personal identification number or PIN. In other
words, ATM cards cannot be used at merchants
that only accept credit cards.
Credit Cards
• A credit card can be viewed as a payment
mechanism which enables the holder of the card
to purchase goods (or services) without parting
with immediate cash
• Customer has to make the payment at the end of
a specified period

8. Credit Card
• Borrowing money from a
bank
or financial institution.
(Spending "other's" money)
• Need not be connected to
any
bank account
• Pay additional interest
drawn
on the amount borrowed
• Limit: Credit line
Debit Card
• Funds taken from the
money
that you have in your bank
account. (Spending your
"own" money)
• Needs checking
Account/Savings Account
• No interest to be paid
• Limit: Equals your account
limit
How are they different?

9. Importance of plastic Money :
• Substitute for cheques.
• Convenient, easy to use and helpful to cashless
economy. Eliminates the need for carrying huge cash.
• Faster mode of transaction
#withdrawing cash
#making payments to third-party
#easy finalisation of a/c
• Multiple functioning i.e.
#Can be used to make payments at shops,hotels,etc
where a Point of Sale(POS) terminal is available
#Can be used to withdraw money from any ATM
• Can be easily obtained from banks.
• Secured, Risk of Loss or Theft minimized.
• Internationally Accepted.

10. In Indian case, we have more than these reasons for promoting
plastic money :
1. can allow the poor direct access to their money
transferred via DBT/subsidy transfers
2. will help in checking black money by establishing
identity of the customer and data of transactions
3. avoiding tax evasion
4. will save cost of printing and environmental cost of
deforestation

11.  Canada has contactless functionality in 26% of its population’s
cards (compared to 41% in the UK and 56% in China) and the
lowest number of debit cards per capita included in the
research (0.7). However, the country has over two credit cards
per person, a figure only exceeded by their neighbours in the
US, who had just under three.
 The majority of Canada‘s payments are made using cashless
means at 57% of transactions, outmatched only by 2% in both
Sweden and France. The UK reached 52% on this scale, while
China, despite the majority of cards being contactless, used
cashless methods in only 10% of transactions.
 China is the most educated on mobile payment services,
with 77% of survey respondents claiming they were aware of
the options available to them in this regard. In comparison,
only 47% in the UK claim the same.
HOW PLASTIC MONEY IS USED IN THE WORLD

12. WORLD’S TOP 10 CASHLESS ECONOMIES (COUNTRIES)

14.  Many poor people do not have bank accounts. Although
the Jan Dhan Scheme launched by the Govt. of India,
succeeded in bringing millions into the banking system,
the process is not complete and many of the accounts
are non-functional. The government has to rectify this
problem and bring the entire poor and marginalized
section into the banking system.
 The small retailers in India deal only in cash and have
not been able to invest in the digital infrastructure.
 The taxes, surcharges and the fees charged on digital
transactions need to be made liberal in order to
encourage the people to adopt the practice. Otherwise
the public would not be willing to move towards a
cashless society.
DISADVANTAGE OF PLASTIC MONEY AND CASHLESS ECONOMY

15.  Hacking and cyber theft are grave
dangers that plague the digital
world. Hackers can steal
information and money from
anywhere in the world. The
challenge before the government is
to put strong security systems in
place to protect the online
transactions from the hackers.
Researchers have shown that it is
easy to crack the PIN number and
gain access to the virtual wallet by
using a software, if the cyber
criminal gets possession of the
victim’s phone.

16.  The Indian public is not
much educated with
regards to the benefits of
using cards or online
payment methods. A vast
majority prefer using cash
as a convenient method of
payment. Even the card
holders consider cash to
be a quick method and
easy method.

17. MY OPNION ON DIGITAL PAYMENTS, PLASTIC MONEY AND
CASHLESS ECONOMY
As we say that everything comes with its own cost. Digital Cashless transaction might
seem like a very convenient option after the demonetization, which is leading India
towards a Cashless Economy but, it all does come with its own cons.
After the announcement of demonetization, a majority of people from the urban
area are using online methods for payments through e-wallets and plastic money.
Most of the payments and transactions are done via online payments through mobile
phones, which can lead to mobile frauds. The number of people using the internet is
increasing day by day. This might lead to increase or boost in more cyber crimes.
There is an urgent need for data localization in India. India needs to have and attain
high awareness with respect to plastic money concept too, that’s when India’s
attempt towards cashless economy will become secure.
There are both pros and cons to a money related cyber community where money no
longer assumes a part of significance. India is a phenomenal case of how things can
escape hand rather rapidly in the coming months.

18. SUGGESTIONS
Zero charges on cashless transfers. Presently there is some bank
charges on every online payment for success of plastic money
there is urgent need to waive of these bank charges.
Incentivize or reward points on use of plastic money should be
increase.
Internet services connectivity be improvised in every part of our
country for better cashless transaction by one and all for
internet, mobile and other type of e-banking.
All ATMs should have both withdrawal and deposit facilities,
regular and biometric facility.
Should increase security on online transactions and immediate
solution of online monetary fraud.
There should be some fine of charges on Banks, in case of
unavailability of CASH in ATM’s .

19. CONCLUSION
ATM/ ATM cum Debit card is the most popular plastic
money. And there is a positive relationship between
the education level and usage of the plastic money.
Plastic money is fast catching the imagination of the
people, in particular, the younger generation in a big
way.
Plastic Money is helpful and major tool for removal of
Black Money, Corruptions, serious monetary frauds
from India.

20. BIBLIOGRAPHY
Articles
[1]. A.Sarangapani and T. Manath, ‘Implementation and challenges’, E business, Volume XIV,
July 2008.
[2].Dr. A.Vinayagamoorthy, ‘Globalisation and recent trends in Banking’, Banking Finance,
Volume IV February 2008.
[3]. Dr. Dhananjay Bapat, ‘Marketing of debit cards strategy to popularize Them’, The Indian
Banker, Volume V, No: 3 March 2010.
[4]. Dr.P.K. Khana, ‘Prevention of Automatic Teller Machine Fraud’, The Indian Banker,
Volume XVIII, September 2006.
[5]. Dr. S. Arumugasmy and P. Shenbagavalli, ‘Growth and development of ATM’, Banking
Finance ,Volume V,May 2008
[6]. ‘Smart IDs: A Look At The Whole Tech Jigsaw’, Electronic for You .Volume 42, No:
9, September 2010.
News Papers
[11]. Business Line- various issues
[12]. Economics Times – various issues
Website www.about.com/od/cstarinventions/a/credit card-card.htm
www.globalcard.com.au/product,www.icmrindia.org , www.investopedia.com/terms
/c/charge card.asp. www.scribed.com/dou/8351190/Impact of plastic Money on Paper
Money, en.wikipedia.org/wiki/charge,card

21. HAPPY ONLINE PAYMENTS
THANK YOU