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Plastic Money may refer to the use of plastic cards like debit/credit cards in the form of electronic transactions. It is a form of payment that enables consumers to make transactions without spending cash. Visa and MasterCard, for instance, prohibit minimum and maximum purchase sizes, surcharges, and arbitrary security procedures on the part of merchants. Merchants are usually charged higher transaction fees for credit transactions since debit network transactions are less likely to be fraudulent. This may lead them to “steer” customers toward debit transactions. Consumers disputing charges may find it easier to do so with a credit card since the money will not immediately leave their control.

Banks, computer manufacturers and card companies established an International Organization for Standardization (ISO) common standard for encoding plastic cards in 1976. Rules for character embossing, card size and magstripe information helped stimulate the development of inexpensive POS terminals with phone connections. The Hawaiian company Verifone’s ZON device released in 1983 became the benchmark for modern card terminals. Other than these chips, there are two magnetic stripes on the back of the card and based on which mode of transaction (debit or credit) you want to conduct, yo need to present that particular side at point of sale (POS) system. IndusInd Bank and Union Bank of India have come out with these innovative plastic cards. In October 2018, IndusInd Bank launched its card called ‘Duo’ and in November 2018, Union Bank of India launched its card called ‘Combo’.

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But, more recently, the ATM or POS machine that reads your bank card now validates it using an online database. Nowadays, bank cards can do so much more, which shows in their internals. What used to be simple plastic and a magnetic stripe has since become far more advanced. Prepaid cards are a mode of payment that is growing in popularity.

• ATM cards, prepaid cash cards, Credit cards, debit cards, forex cards, and other types of Plastic Money are available.
• Contact smart cards are inserted into a smart card reader making physical contact with the reader while contactless smart cards have an antenna embedded inside the card which enables communication with the reader without physical contact.
• Retail and departmental stores are the leading issuers of prepaid cards.
• Equens, an association with all major banks as its members, runs the system, and until August 2005 also charged for it.
• The security of cards and devices appeals to customers for both legitimate and illegitimate reasons.

Yes, in certain circumstances, merchants can take these steps as protection against fraud, errors or other losses. One common situation involves a hotel putting a hold on a certain amount when you use a debit card (or credit card) to reserve a room. Typically, the gas station will create two transactions — the first to get approval from your bank for an estimated purchase amount (let’s say $50) when you swipe your card before pumping gas, the second for the actual charges when you’re done. Until the first ($50) transaction is cancelled by the bank, usually within 48 hours, you wouldn’t have access to that amount in your account. Consumers like to use cards and devices to pay for services because these methods make them feel secure. While most folks are aware of issues like credit card fraud, they still insist on paying with plastic and digital wallets.

PVC cards

It’s important to review the terms and conditions of your specific card before making a purchase. Generally, debit cards do not have annual membership fees or cash-advance charges, but there are other potential fees to consider. Unlike the debit card, which can be used for several transactions in major stores and online transactions, an ATM card is only used to withdraw from an ATM. India is one of the fastest-growing economies in the world, and digital transactions have made e-commerce safer and more convenient while also allowing for more relaxed and convenient authentication. A separate, local debit system, known as Smart Pay, can be used by the majority of debit and ATM cards, even major-brand cards. This system is available only in Taiwan and a few locations in Japan as of 2016.

Card data flow and storage can be completely secure by working with the right payment processing platform. Businesses should partner with service providers that have attained the highest level of PCI certification. The best providers establish end-to-end encryption to protect consumer information. Therefore, more and more people today are turning to plastic Why are some plastic cards called debit cards? money instead of cash. Many card issuers offer stainless steel and other metal models, while other, more environmentally-inclined institutions use recycled plastics for users who want to spend money in a way that’s as good for the planet as it’s bad for your pockets. Using prepaid cards can be a great way to manage your money and avoid financial trouble.

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Starting in 1991, German consumers could pay with EC (eurocheque) cards in many retail outlets. But when you get cash using a credit card, you’re borrowing money with a “cash advance.” If you use your credit card for cash, you may pay interest on the funds starting right when you withdraw them. You may also pay a transaction fee and pay a higher interest rate than you would on purchases.

So, even if you have only Rs 10,000 in your account but your credit limit is Rs 50,000, you are free to spend up to Rs 50,000. You could also have Rs 1,00,000 in your account, but your credit limit is only Rs 50,000. By the 1980s, cards transitioned from paper to plastic with a magnetic stripe on the back.

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BancNet introduced their point of sale system in 1994 as the first consortium-operated EFTPOS service in the country. The service is available in over 1,400 locations throughout the Philippines, including second and third-class municipalities. In 2005, BancNet signed a Memorandum of Agreement to serve as the local gateway for China UnionPay, the sole ATM switch in China. This will allow the estimated 1.0 billion Chinese ATM cardholders to use the BancNet ATMs and the EFTPOS in all participating merchants.

• As a result, credit and debit cardholders can be reasonably confident of the security of their funds.
• Every credit and debit card providers offers deals and discounts on shopping.
• And at that time, point-of-sale (POS) terminals for on-the-spot card transactions weren’t widespread in retail.
• Since the mid-2000s, a number of initiatives have allowed debit cards issued in one country to be used in other countries and allowed their use for internet and phone purchases.

This stemmed from “cloning”, where legitimate cards were copied to trick POS machines and ATMs. Debit cards usually have daily purchase limits, meaning you can’t spend more than a certain amount in one 24-hour period. Through this article, we will cover all the necessary details one needs to know about plastic money. The article discusses the types and benefits of using Plastic Money in India. In the Philippines, all three national ATM network consortia offer proprietary PIN debit. This was first offered by Express Payment System in 1987, followed by Megalink with Paylink in 1993 then BancNet with the Point-of-Sale in 1994.