Payments for purchases can be made in cash,cheques or cards. In respect of cash, there is the
limitation that bigger payments cannot be made in cash on account of the need to carry bulk.
Cheques are not often accepted as the credit standing of the person issuing a cheques is not apparent.
In the circumstances, plastic money in the form of credit and other cards has become a preferred mode
of payments and has wide acceptance among public. With the increasing use of the plastic money, the financial system is moving more towards cashless transactions.
Charge card:
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In this, transaction by the card-holder are accumulated over a period of time generally a month and the total amount is charged, i.e. debited to the account of the card-holder. the card-holder is given time of about 25 to 50 days to credit his account, in case there are insufficient funds in his account at the time of debit.
Since the transaction are only accumulated and charged when the holder is expected to pay the amount, such cards are called charge cards.
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In case of credit cards, the card-holder is sent a bill indicating the dues and he/she has the option to
pay the entire amount as soon as the bill is received or choose to pay only certain percentage of
the amount billed, in which case the card-holder gets a credit to the extent of the balance amount of
the bill.whereas no fee is levied if the full amount billed is paid within a given due date, a service fee/
interest is charged on the payment which is deferred.
pay the entire amount as soon as the bill is received or choose to pay only certain percentage of
the amount billed, in which case the card-holder gets a credit to the extent of the balance amount of
the bill.whereas no fee is levied if the full amount billed is paid within a given due date, a service fee/
interest is charged on the payment which is deferred.
Debit cards:
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Debit cards are same as the credit cards. The only difference in this card is that the amount of dues
from the card-holder for each and every transaction is debited to card-holder's account as
soon as each transaction is notified to the issuer.
from the card-holder for each and every transaction is debited to card-holder's account as
soon as each transaction is notified to the issuer.
If the balance is insufficient to cover the debit, the difference becomes payable immediately or else
a service fee is levied. If the amount payable is overdue for a long period, the card may be cancelled.
a service fee is levied. If the amount payable is overdue for a long period, the card may be cancelled.
ATM Card:
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These are cards issued to the savings account holders for drawing cash from Automated Teller
Machines which can be placed in the branch or off site. Some of the debit/credit cards are
also used as ATM cards.
Machines which can be placed in the branch or off site. Some of the debit/credit cards are
also used as ATM cards.
The ATM's ensure availability of cash round the clock and the customer need not visit the branch for small transactions.
