Apr 27 - May 10, 2009

Paper money was first used in China around the seventh century AD, but was outlawed in 1455. The use of folding currency re-emerged in England in 1694. Australia was the first, which designed the plastic note with longer life. It was recycled for further utilizing when worn out.

The plastic note is same as paper but the only difference is that it is made of plastic and more secured but in traveling and shopping people used to carry huge cash, which was much unsecured. The cards were introduced to the world to resolve the issue of carrying huge cash. They are known as Plastic Money.

The usage of plastic money (card) has increased in the mode of payment of huge amount. Over time, many different types of plastic money have been introduced to enhance the features of plastic money. We can use it anywhere in the world. Now the world is becoming globalized therefore every plastic money card is accepted everywhere.

Plastic money is secured and cannot be copied. As we cannot keep the huge amount of cash with us so the idea of plastic cards popularized rapidly worldwide and now one can keep the huge amount while going to anywhere in the world. The plastic money reduces the needs of carrying physical or hard cash.

These cards are performing the function of money with different ways. These cards are accepted worldwide, in which you can utilize your own money and bank's money. The card through which you spend your own money is known as debit card. The card through which you spend the amount of bank as loan is called credit card.

As the usage of plastic cards is increasing, the number of suppliers is also increasing. Some suppliers (bankers) are charging the hidden charges and high interest rate. The sales agent who convinces the people to get the credit card offers packages, which are not explained at the time of agreement and that baffle credit card holders after they receive bills.

Credit cards are good especially when you are traveling or experience some unexpected emergencies. However, their excessive use without budgeting could lead to a lifetime of debts that mounts month after month thanks to the high financial charges levied on any unpaid amounts.

In Pakistan, first plastic money is introduced by the Habib Bank, which didn't get the familiarity among people and then Allied bank's Master card was launched which became very popular among the customers, then different banks came up with their different form of credit and debit cards.

Influence of western lifestyle has changed things in Pakistan. Pakistan is also turning to 'Plastic Money' and it has become more fashionable. Making payment through cards is so simple and faster. Now, there is no need to wait for the change or stand in the queue to make payments. It is not just swiping the card and it is contactless payment or 'Tap and Go' payment. Here you have to just hold the card in front of the reader machine or tap the card on the machine, and your payment will be done within a minute.

However, there are also risks associated with making payment through cards. Payment card industry is advancing with new technologies. The chip will be in-built into the card, mobiles, or wristwatches etc. Currently, mobiles are used to make payments. Contact less payment is under trail in UK and US along with biometric payment too.

Cards are not just boring plain cards anymore. This payment card industry has become more interesting. There are gift cards for every occasion, with beautiful designs over it. You can also customize your card design according to your preference. You can put your own photo on the card. Gift cards are prepaid cards, and one time use card and reload able cards are available. You can select the card according to the occasion and gift for your loved one, and make them feel special.

There are several banks, which are associated with the state bank of Pakistan for dealing with consumer for plastic money. The state bank has given the terms and conditions regarding the issue and use of the credit cards, which are properly documented in the form of a written contract between the banks and the credit card holders. These conditions clearly highlight the cardholders' liabilities and obligations, eligibility conditions, fees, charges, service fee rate, and their methods of calculation etc.

No charge can be recoverable from the credit card holders other than agreed to as per the contract. That said that banks should be liable for all transactions, not authorized by the credit card holders after they have been properly served with a notice that the card has been lost or stolen. Bank's liability shall be limited to those amounts wrongly charged to the credit card holder's account.

The SBP has taken several measures to enhance security of plastic money transactions in the country with a view to effectively address customer complaints and to ensure continued growth in the fields of e-banking and e-commerce.

It may be mentioned that e-Banking in Pakistan has recorded phenomenal growth over the years. According to the latest data, there were 6.4 million cards in circulation, of which 24% are credit cards while the rest or 76% are debit cards. Similarly, more than 3200 ATMs and 54000 Point of Sale (POS) terminals have been working seamlessly across Pakistan, thus providing 24/7/365 banking facility to plastic money holders in Pakistan. Such a huge infrastructure supporting card- based transactions indicates huge potential for the growth in e-Banking business in Pakistan.

(The writer is the lecturer, Defence Authority College of Business, Karachi)