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    Electronic Banking: Electromagnetic Cards

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    Nikhilrajsingh Shekhawat
    Electronic banking allows customers to access financial services through cards like ATM cards, debit cards, and credit cards. ATM cards can be used to withdraw cash from ATM machines. Debit cards provide an electronic payment method that directly debits funds from a linked bank account. Credit cards allow customers to make purchases now and pay later, after a grace period. Banks earn revenue from credit cards through various fees and interest charges.

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    Electronic Banking: Electromagnetic Cards

    Uploaded by

    Nikhilrajsingh Shekhawat
    126 views13 pages
    Electronic banking allows customers to access financial services through cards like ATM cards, debit cards, and credit cards. ATM cards can be used to withdraw cash from ATM machines. Debit cards provide an electronic payment method that directly debits funds from a linked bank account. Credit cards allow customers to make purchases now and pay later, after a grace period. Banks earn revenue from credit cards through various fees and interest charges.

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    Electronic banking allows customers to access financial services through cards like ATM cards, debit cards, and credit cards. ATM cards can be used to withdraw cash from ATM machines. Debit cards provide an electronic payment method that directly debits funds from a linked bank account. Credit cards allow customers to make purchases now and pay later, after a grace period. Banks earn revenue from credit cards through various fees and interest charges.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    126 views13 pages

    Electronic Banking: Electromagnetic Cards

    Uploaded by

    Nikhilrajsingh Shekhawat
    Electronic banking allows customers to access financial services through cards like ATM cards, debit cards, and credit cards. ATM cards can be used to withdraw cash from ATM machines. Debit cards provide an electronic payment method that directly debits funds from a linked bank account. Credit cards allow customers to make purchases now and pay later, after a grace period. Banks earn revenue from credit cards through various fees and interest charges.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 13

    Electronic Banking

    Electromagnetic Cards
    Electromagnetic Cards
    Types of cards:

    • ATM Cards
    • Debit Cards
    Pre paid Debit Cards
    Charge Cards
    Credit Card
    What is ATM Card ?
    An ATM card is a Payment Card, issued by a Bank, that enables a Customer to access
    an Automated Teller Machine(ATM), in order to perform transactions, such as

     Cash Withdrawals

     Cash Deposits

     Obtaining information

     Other services

     These Cards can be used only at ATM s.


    Debit Cards
     Debit card is a plastic card which provides an alternative payment method
    to cash, when making purchases.

     It is used for making payments for purchases, wherever Visa/Master Cards is


    accepted, even over Internet.

     Functionally, it can be called an Electronic Cheque (e-cheque), as the funds


    are withdrawn directly from either the bank account, or from the remaining
    balance on the card, and the debits are reflected in the user’s account
    immediately.

     Debit cards can also allow for instant withdrawal of cash, acting as the ATM
    card for withdrawing cash.
    Debit Cards

     Debit cards require electronic authorization of every transaction, at Point of


    Sale(POS), through Electronic Data Capture(EDC) Machines.

     The transactions are additionally secured with the Personal Identification


    Number (PIN) authentication system.

     For Online(Internet) Payments using Debit Cards, authentication is done


    through One Time Passwords(OTP) system.

    “ Buy now , pay now”


    Pre – paid Cards

    • Also known as Reloadable pre-paid Debit Cards

    • Used generally for recurring expenses

    • The payer loads funds into the Card holder’s account, before use.

    • Some examples :
    - Corporate Expenses Cards
    - Pre paid Salary cards
    - Travel cards , usually for foreign trips
    - Gift Cards

    “ Pay now, buy later”


    What is a Credit Card ?

    A pre approved credit, which can be used, for the


    purchase of items now, and payment of the same
    later

    “ Buy now, pay later”


    Credit Cards- Repayment System

     Credit card issuers usually waive interest charges, if the balance is paid in full each month.

     All credit cards have a ‘grace period’, which usually varies from 20 days to 45 days,
    depending upon the type of card and issuing bank, and it is the time available to the
    customer, to pay the balance amount before interest is charged on it.

     After the expiry of the grace period, the banks charge full interest at commercial rates, on
    the entire outstanding balance, from the date of each purchase, if the total balance is not
    paid.

     If a customer is late paying the balance, finance charges will be calculated, and in such
    cases the grace period does not apply.

     The card holders also get an option to pay a ‘minimum payment amount’, which is 5% of
    the total outstanding amount, and continue to enjoy the facility on ‘revolving credit’ basis.
    Credit Cards

    Advantages – Card Holders

    • Simple and convenient, can be substituted for cash

    • Card holder need not approach a bank for taking credit in urgent need

    • Wider acceptability

    • Cash withdrawal is also available

    • 24 x 7 convenience through Helpline services.


    Credit Cards

    Advantages – Merchants

    • Reduces the security risk of handling cash

    • Reduces operational cost

    • Guaranteed payment – direct into account

    • Enhances sales
    Credit Cards

    Advantages – Banks

    • Source of revenue

    - Joining fee
    - Renewal fee
    - Service charges from merchants
    - Interest from card holders
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