INT. J. NEW. INN.

, 2012, 1(1), 241-243

ISSN:2277-4459

FUTURE OF PLASTIC MONEY IN INDIA

Shweta Sawhney
Noida Institute of Management Studies, Noida

ABSTRACT
Plastic money is also known as polymer money. It is made of out of plastic. It reduces the risk of handling a huge amount of cash. It includes debit cards, ATMs, smart cards, etc. Plastic money has changed the face of banking in India. The advantages and disadvantages of using plastic money in India are discussed in this paper. The future opportunities available and threats to plastic money are also discussed. The one of the main future prospect of plastic money in India is that plastic currency notes will be introduced very soon in India. In the end conclusion regarding the positives and negatives along with importance of plastic money in India is discussed.

1. INTRODUCTION
Plastic money is made out of plastic and it is a new and easier way of paying for goods and services. Plastic money was first introduced in India in 1950s. There were only two players in domestic card industry in early 80s i.e. HSBC and Citibank. But in 2001 this number grows to 25. The number of cards are increased along with types of cards on offer have been on surge. It is now an essential form of ready money which reduces the risk of handling huge amount o cash. Plastic money is the generic term for all types of bank cards, credit cards, debit cards, smart cards, etc. There are various factors which affect utilization of plastic money in India. These factors can be interest rate, reward programs offered, annual fees charged and membership benefits obtained. Plastic notes are same as paper but the difference is that they are made of plastic & more secured.

2. TYPES OF PLASTIC MONEY

There are various types of plastic money available in India. Following are the various forms of plastic money: CREDIT CARD: A card which allows people to spend now and pay back the money later. These are not linked to any bank account. This card can be used repeatedly to borrow money or buy products and services on credit. Major banks issuing credit cards in India are State Bank of India, Bank of Baroda, ICICI, HDFC, HSBC,etc. 241

DEBIT CARD: Debit cards are electronic plastic cards that are used as a substitute for cash. These are directly linked to a cardholders bank account. A debit card allows expenditure only to the extent of funds in the account. A debit card is only accepted at outlets with electronic swipe-machines that can check and deduct amounts from your bank balance online. When a debit card is used to make a payment, the total amount charged is instantly reduced from your bank balance. CHARGE CARD: A charge card carries all the features of credit cards. After using a charge card one will have to pay off the entire amount billed, by the due date. When one uses credit he is not declared a defaulter even if he miss due date. A late payment fees is levied in next billing statement. AMEX CARD: Amex stands for American Express. 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 range of privileges offered to Amex cardholders. MASTER CARD AND VISA: Master card 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 customers world-wide may use their respective credit cards to make various

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