7.credit card and debit card working and management


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7.credit card and debit card working and management

  1. 1. Credit card and Debit card Working and Management GROUP NO:7 Aditya Pande Anurag Goyal Mrugesh Chikhalikar Suchet Pajni Vishal Patel
  2. 2. Introduction to plastic money• Evolution of plastic cards• Plastic money – A new and easier way of paying for goods and services• Provides convenient usage alongwith incentives• An alternative to hire-purchase or loan on consumer goods• It,however,allows debt to pile-up that can lead to penalties• Major types of plastic money – Credit cards, Debit cards , Charge cards,co-branded cards
  3. 3. How Did It All Begin?• Debit cards  Introduced around 1977- 1978  The launch highlighted the introduction of e-commerce and alternative means of payment• Credit cards  Introduced in 1980 by Central BOI  Banks acted as clearing houses for transactions and promoted their own brands  Addition of magnetic strip introduced to enhance security measures  Launch of ATM machines for ready access  Present scenario - A household name
  4. 4. Credit cards• A part of a system of payments after the small plastic card issued to users of the system• A card entitling its holder to buy goods and services based on the holders promise to pay for these goods and services• The issuer of the card grants a credit to the consumer from which the user can borrow money for payment to a merchant• Most credit cards are issued by local banks or credit unions, and are the shape and size-85.60 × 53.98 mm-ISO/IEC 7810 standard
  5. 5. Credit cards1. Issuing bank logo2. EMV chip on "smart cards"3. Hologram4. Credit card number5. Card brand logo6. Expiration Date7. Card Holder Name8. Contactless chip
  6. 6. Credit card numbering• Bank Identification Number• BIN- first six digits for MasterCard and Visa cards• Next nine digits-individual account number• Final digit-validity check code• Issue and expiration dates, extra codes such as issue numbers and security codes
  7. 7. Credit card numbering An example of the reverse side of a typical credit card: 1. Magnetic Stripe 2. Signature Strip 3. Card Security Code
  8. 8. How credit cards work
  9. 9. Transaction steps
  10. 10. Parties involved• Cardholder• Card-issuing bank• Merchant• Acquiring bank• Credit Card association• Transaction network
  11. 11. Related terms• Interest charges• Benefits to customers• Grace period• Benefits to merchants• Rewards• Interchange fee• Discount fee
  12. 12. Debit Card• Provides an alternative payment method to cash when making purchases• Functionally, it can be called an electronic check, as the funds are withdrawn directly from either the bank account, or from the remaining balance on the card• It is also known as bank card or check card• Allow for instant withdrawal of cash, acting as the ATM card for withdrawing cash and as a cheque guarantee card• Merchants can also offer "cashback"/"cashout" facilities to customers, where a customer can withdraw cash along with their purchase
  13. 13. Debit Card Numbering
  14. 14. Debit Card Numbering
  15. 15. How Debit Cards work1. Collecting payment data2. Authentication3. Authorisation4. Settlement of funds
  16. 16. Some important tips…Do’s Prefer a debit card over a credit card Know all of your card’s hidden fees Always pay more than the minimum each month Pay on time, all the timeDon’t’s Don’t use them for cash advances Don’t use them to pay for basics: rent, groceries, etc. Don’t charge more than you can pay off in a month Don’t let banks increase you credit limit
  17. 17. How are they different? Credit Card Debit Card• Borrowing money from a • Funds taken from the bank or financial institution. money that you have in (Spending "others" money) your bank account.• Need not be connected to (Spending your "own" money) any bank account • Needs checking• Pay additional interest Account/Savings Account drawn on the amount • No interest to be paid borrowed • Limit: Equals your account• Limit: Credit line limit
  18. 18. Thank You!