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ANALYSIS OF THE USE OF PLASTIC MONEY
Nirmala. R
1, Sonu
21,2 Аsst. Prof., Commerce Department, Govt. College, Hisаr, Hаryаnа, (India)
ABSTRACT
Over the past few decades, a small fragment of plastic has revolutionized the way consumers pay. Rise in disposable income, introduction of new products and services, increased travel and growth of the entertainment sector has had an impact on the use of plastic money. The present paper makes an attempt to understand the consumer preferences and attitude towards the use of plastic money. The paper is an exploratory-cum- descriptive research that is primarily based on the data collected from 200 respondents and duly investigates the acceptability of the cards among the Indian consumers and the factors affecting it.
Keywords: Consumer Attitude, Plastic Money
I. INTRODUCTION
In India, as in other countries around the globe, an organized mode of payment has emerged over time from the barter system to the more convoluted forms of monetary arrangements. The prevalent mode of settlement across India in the 20th century has been coins, cash and cheques. As we move ahead into the 21st century, payment through cash and cheques itself has encountered a transfiguration. It has moved from being a physical paper- based transfer of value to a virtual electronic one. Usage of plastic money has come as a form of amenity to financial institution customers. Electronic service is becoming a feasible option for dealings between financial service providers and their clients. In the study, we are typically focusing only on credit cards and debit cards in order to find out the effectiveness of such cards in real life and factors affecting the consumer perception towards the plastic money are discussed. A research design has been used based on the collected data to predict the consumers acceptance behavior. Finally, the outcomes are analyzed and presented.
II. OBJECTIVES
To assess the level of adoption and use of plastic money as payment system.
To analyze the factors for adoption of plastic money that replaces the paper or cash money.
To find problems of using plastic money.
III. RESEARCH METHODOLOGY
The research study is Exploratory in nature. The Study is been carried out by taking a survey of 200 respondents by Stratified Random Sampling Method from a city of Hissar by using structured questionnaire and interview technique. The sampling frame that is used is within the boundaries of Hissar Municipal Corporation. Secondary data is collected through reference books, research papers, articles, and websites.
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IV. ANALYSIS
Type of card possessed by respondents
S No. Parameters Percentage1 Debit Card 60%
2 Credit Card 15%
3 Both 22%
4 None 3%
From table it can be seen that majority of respondents use plastic money in the form of debit card. However, some use both debit and credit cards. The preference of the specified card makes a great amount of impact on the spending patterns of various consumers. The preference of debit cards over credit card marks a strong sense of favouritism among the respondents. According to table majority of respondents prefer using Debit card over Credit card as they feel that the use of Debit card is more beneficial than Credit card in terms of cash back policy, control over spending and security. However some of are the opinion that both Debit and Credit cards have their own benefits.
Benefits of the Debit/Credit cards according to respondents (Figures in percentages) S. No Parameters Strongly
agree
Agree Satisfactory Disagree Strongly Disagree
1 Convenience 54 12 20 7 7
2 Security 17 3 23 46 11
3 No
transaction cost
9 6 12 21 52
4 Accessibility 32 31 20 8 9
5 Portability 46 31 3 15 5
From table it can be seen that majority of respondents strongly agree to the fact that plastic money is convenient, easily accessible and very portable. However around some of the respondents completely disagree to the secure and no transaction cost nature of the Debit/ Credit cards. The major preference of debit card is mainly due to the convenience and easy portability. However the high transaction or charges of using the plastic money leads to more of cash payments. Some banks have a cost as high as up to 10%. Such high rates when billed with the transaction amount spend leads to a big hole in the pockets of consumers thus their preference of debit card is justified completely.
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Purpose of Usage of Card According to Respondents
1 Apparel 20%
2 Electricity bills/Phone bills 16%
3 Banking 13%
4 Consumer Durables 11%
5 Electronics 13%
6 Investments 5%
7 Jewellery 6%
8 Online transactions 16%
From figure it can be seen that majority of respondents prefer using plastic money for buying apparels, paying electricity bills/phone bills and for online transactions. These are all day to day transactions that require more than the average cash payments. Use of Debit cards is convenient as they can be swiped anywhere with ease and the deduction from respective bank account happens immediately unlike the credit cards where a swipe generates a future liability of payment for the customer. The easy access to internet and site like Jabong, Myntra and Amazon has led to the rise in apparel online shopping of the card users. However, they do not use plastic money much for investment purposes which includes trading of securities on stock exchanges, purchase of bonds/ debentures, purchase of jewellery etc.
Problems perceived by the respondents on possession of Plastic money 1. Insecurity 2.Fear of losing the card
3. Unnecessary formalities 4.High processing fees 5. Shops Using Other Vendors 6.Less Global Availability
7. Worn out Magnetic Strip 8. Increased Debt and High Interest Rates 9. Frauds:
V. FINDINGS
1. The use of Plastic cards is more and more increasing for online payment.
2. Around 50% of payments of the customers are done through credit/Debit cards. Sample survey shows Debit cards are preferred over credit cards.
3. The main reason for the increase in plastic money is that the customers are not a victim of a fraud.
4. The customers have rated that the telephonic payment option is average due to long timeliness and security concern for CCV/PIN number.
5. Frequency of customers to visit the banks have become less.
6. The use of plastic cards has also been increased because banking industries has also provided the 24x7 customer service for their customers.
7. The factors for adoption of plastic money over the cash and paper money are Non- Discounts while shopping, No hassles of carrying cash, Security of money, Hassle free EMI’s ,Easy to use, Personal Loan on Credit Card .
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VI. CONCLUSION
The study has clearly highlighted the advantage of instant transaction as one of the major factors favoring the use of plastic money over real money by the population today. It has already been highlighted by the study that convenience of not carrying cash and ease of transaction is one of the major psychologically influencing factors that encourage the use of plastic money instead of real money. Additionally, the results of the study have also stressed upon the convenience and ease of use while paying or shopping by plastic money. The saving of time and the fact that the plastic money seems to be more portable also seems to further the cause of a possible change in the scenario of money usage in the economy. On the other hand, Security comes forward as a major cause for concern for the population using plastic money. Therefore, it is easy to conclude that the population is ready as ever to use plastic money at a greater level due to its high levels of ease and convenience.
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