innovations in credit cards

8/9/2019 Innovations in Credit Cards

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INTRODUCTION

y Credit card is part of a system of payments named after the smallplastic card issued to users of the system. It is a card entitling its holderto buy goods and services based on the holder's promise to pay for

these goods and services.y Different from charge card (balance to be paid in full each month)

FEATURES:

y Offer consumer an easy way to track expenses(personal expenditureand tracking work related expenses)

y Acceptable world wide & available with a large variety of credit limits-

repayment arrangement and other perksy Debit card is a plastic card that provides alternative payment method

to cash when making purchases.

y Allow instant withdrawal of cash( ATM card & cheque guarantee card)


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History of debit card dates back around 20 years ago which highlighted the

introduction of e-commerce and alternative means of payment.

Back in 1990, the count of debit cards in circulation was around 19

million

In the initial years of the debit card era witnessed steep growth and bythe year 2006 there were as many as 56 million debit cards.

By January 2007 there were 22m credit cards in India


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Growth

Credit and debit cards in India: usage trends

Credit

cards

Debit

cards

Outstandi

ng cards,

end-March

(m)

Transactio

ns (m)

Value of

transactio

ns (Rs bn)

Outstandi

ng cards,

end-March

(m)

Transactio

ns (m)

Value of

transactio

ns (Rs bn)

2003/04 10.1 100.2 176.6 18.1 37.8 48.7

2004/05 14.1 129.5 256.9 34.9 41.5 53.6

2005/06 17.3 156.1 338.9 49.8 45.7 59.0

April 2006-

January 2007

22.1 155.7 334.7 70.3 56


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Recent innovation in credit card

and debit card business by

Indian banks


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CONTD..

)

VIRGIN CREDIT CARD-This is a market leading balance transfer cardwith a 0% introductory period on balance transfers for 16 months with a2.98% balance transfer fee. Also use this card to get money off yourholidays

y HALIFAXALL IN ONE-This credit card is a very strong offer with acompetitive 0% introductory period on purchases and balance transfersfor 9 months with 3% balance transfer fee

y AACREDIT CARD-Attractive reward card, particularly for AA members.

Members receive 2 points for every 1.00 spent on motoring costs and 1point per 1.00 for other spending. Non-members receive 1 point for every2.00 spent. Balance transfers are interest-free until Jan 2011. Spend onmotoring products and services; fuel and AA products are interest freeuntil Jan 2011


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CONTD.

y LIOYDS TSB AIR MILES DUO-This rewards card enables you to collect Air

miles with your purchases and balance transfers which give you one of the best Air

miles rewards schemes in the market, plus collect double Air miles when you spend

abroad

y BARCLAYCARD PLATINUM-A credit card with a low 14.9% APR plus 0%

interest free on balance transfers until January 2011 (2.5% handling fee applies)and 0% interest on purchases for 3 months, both from account opening


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CONTD..

GLOBALCLASSIC CREDIT CARD-

This card takes a flight to joy various privileges exclusively offered for thepeople:

y WORLDWIDEACCEPTANCE: The Indian Bank Global Classic Card isaccepted at over 30 million VISA Merchant Establishments around the world,including 150,000 Merchant Establishments in India.

y CASHADVANCE: can withdraw cash up to 40% of your Credit Limit subject toa daily limit of Rs.25, 000/- at a very nominal charge. With over 800,000 VISAATMs worldwide

yREVOLVING CREDIT: Gives financial flexibility for managing the finances.People have to pay 5% of their total transaction amount plus finance chargesand revolve the balance at an attractive interest rate of 1.99% per month.

y COMPREHENSIVE INSURANCE: With your Global Classic Card, the peopleare secure, always. Its insurance package comprehensively covers against thevarious risks you are exposed to


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CONTD

y IB MAESTRO DEBIT CARD- Our 24 hour Hi-powered, value-added ATM cum

Debit card, just the size of a visiting card, is the passport to the facilities available

with ATM and for shopping at Merchant establishment. It brilliantly complements

your ambitions, offering more value, more excitement, more service

Uses of maestro debit card:-used for purchase of merchandize /services fromcommercial establishments/service organizations that display the'MasterCard / Maestro / Cirrus'Logo.


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Cont.y PRIVILEGE CARD-

y This is multi-purpose debit card issued to an SIB privilege account holder.

y All features of global ATM cum debit card available

y The SIB-privilege card can be linked to any five SB accounts of the customery On-line fund transfer up to Rs.1,00,000/.is allowed between these five accounts

through ATMs

y The privilege card holders can withdraw money (free up to Rs.20, 000/-per day)at the networked branches, by using the specially designed/personalizedprivilege cheques, provided in the account


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Shop for Rs. 2,000 and get clothes worthRs. 500 free at all RelianceTrends stores.

Free consultation worthRs. 1,200

20% off on all products delivered inIndia and abroad.


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y ICICI Bank HPCLDebit Card

As an ICICI Bank HPCLDebit Card holder,you get a waiver of2.5% surcharge* for the fuel transactions

The ICICI Bank Visa SignatureDebit Card

The ICICI Bank Visa Signature Debit Card comes with Signatureprivileges, conveniences and benefits that invite you into the Signature

life. For the first time in India, you as a Global Private Client can lookforward to a premium card that brings you a host of distinctive youmake at HPCL pumps

Book a ticket on Travelocity.com by using any ICICI credit card and

y Get Rs.300 off on domestic flight bookingsy Get Rs.750 off on international f light bookings

y Get Rs.1,000 off on hotel bookings


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OPPORTUNITIESINCREDITCARD BUSINESS

y HELPS THE ENTERPRENEUR TO MAKE MONEY- people in turn - morepeople-more people signs up-more money( potential grows as more people areknown & contacted)

y REFERRAL FEE- approve to receive a credit card.

y MORE SECURE THAN CASH- easy to keep track of, add money as necessary,accepted at any retailer- make individual job easy.

y SELLING CREDIT CARD TO LOCAL BUSINESS- for individual working withthis opportunity


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OPPORTUNITIESINDEBITCARD BUSINESS

y Reduce need of cash for increased purchasing flexibility-deduct funds frombusiness checking accounts, show identification, no need to carry extra cash &authorization for immediate shipment of mail.

y Increase money management capabilities- helps to get receipt with everypurchase to keep track of spending.

y Protect against unauthorized purchases- purchase assurance , extendedwarranty, travel service medical protection.


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CHALLENGESINCREDITCARD BUSINESSy LEAGAL AND REGULATORY REQUIREMENTS- followed by market

infrastructure and readiness.

y VALUE CHAIN OF CREDIT CARD-complicated & demand carefulconsiderations ( e.g.- no retailer can have credit card without partnering withbank )

y DAY TO DAY CHALLENGES- new customer acquisition, card activation,customer retention & card usage

y BANKRUPCYOF THE CARD HOLDER- grace period-penalties and charges -bankruptcy

y NEW LEGISLATION AND REGULATION threatens to reshape businessmodel & facing rising chare offs.


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CHALLENGESINDEBITCARD BUSINESS

y THREATOF SUBSTITUDES-offering credit cum debit card at lower interestrates (substitute debit card)

yOPERATING COSTS-( cost of running debit card portfolio)- paying executives ,mailing the statements, running the computers to keep record of card holder &protecting the consumer from fraud rings)

y DEBIT CARD SCAMS-enjoy ability to suck money from the accounts ofunsuspecting debit card customers.


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For further details CONTACT

[email protected]

innovations in credit cards

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