Anything that is acceptable as a medium of exchange and even the means of payment for the settlement of debts can be considered as money. The money as we see today has been the result of a long evolution process. In today's world, modern money consists of currency notes and coins, demand deposits and plastic money.
Plastic money has emerged and developed with the expansion of internet facilities. Plastic money consists of debit cards, credit cards and other facilities. The users can carry them instead of carrying currency. A debit card allows the user to withdraw money from the account while credit card allows the user to overdraw beyond the account holder's balances. The introduction of this has benefitted both the consumers and the banks.
The main benefits of plastic money from the point of view of the user are:
- The most important benefit of carrying cards is the reduction in the amount of cash that has to be carried by the users. This will reduce the risk and inconvenience. This will also reduce the risk of theft.
- The cards can be used globally – anywhere and anytime. It has 24-hour access even in foreign countries. This reduces the time and cost involved in exchanging the currencies.
- A credit card can be used in case of contingencies and emergencies. Even though the charges of using a credit card are high, it can be used in acute necessities.
- Both credit and debit cards can be used for online payments. The expansion of the internet has enabled buyers to purchase commodities online. This has been made further simpler by payment using cards.
- The consumers have the benefit to track and keep a perfect record of their transaction. No transaction will be missed while using cards. This will help in the proper handling of money.
The main advantages that banks have with the popularity of plastic money are:
- The number of liquid cash dealings through banks will be reduced. This will reduce the chances of theft and misappropriations.
- The banks have the benefit to track and keep a perfect record of their transaction. No transaction will be missed while using cards. This will help in proper maintenance of all their dealings.
- The cash dealings will be reduced with the use of plastic cards. This will reduce the cost of operation and administration.
