Plastic Cards: peculiarity of using in Kazakhstani and foreign practice

 

CONTENT: 

Introduction Theoretical aspects of plastic cards…………………………………………...5 Analysis of actions with plastic cards………………………………………..12 The development of plastic cards market in the Kazakhstan………………..21 Conclusion References

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

INTRODUCTION 

     Economic development of any country today is impossible without a highly efficient system of  money and the use of modern payment mechanisms. Billing mechanism - the structure of the economy, which mediates the "metabolism" in the economic system. Payment methods can be divided into cash and noncash. Cashless payments are gradually replacing the cash payments in the monetary systems of different countries. The main share of non-cash settlement accounts for commercial banks. To them belongs to the most important settlement and the payoff  function in the payment system of the state. Today's payment systems allow the bank to expand the scope of services, covering it unprofitable for cash transactions and translating them into profitable for a  non-cash.

     With the development of economic ties is the process of integrating the economies of individual countries and the development of payment systems, in particular, towards the development of non-cash forms of payments, which, in turn, have been widely used in today's world. One of the instruments of cashless payments is a plastic card. In most economically developed countries, a plastic card is an essential attribute of trade and services. Transactions using payment cards show the degree of integration of the banking system and society. Suffice it to say that non-cash payment for goods and services in industrialized countries is 90% of the total money transactions.

     If you compare bank card deposit accounts, as a mechanism to attract public funds, the cards are less effective, because the interest rate on the card account balance may be significantly lower than the interest rate on the deposit. But interest in the card is still retained, as it is due not so much interest, many other factors: ease of use, automatic provision of bank credit, ability to defer repayment of the debt, the regular receipt of information on transactions.

     Introduction of the settlement system based on bank cards has advantages for the bank:

• overcome spatial constraints on attracting and servicing customers;
• attracting new business and private customers;
• increase in current assets;
• reducing overhead costs.

     Obvious advantages from the use of bank cards trade and service enterprises. This decrease in the cost of collection, transportation and "cashing out" means the possibility of reducing prices in the sale of "currency" of goods, the simplification of the calculations with the buyer (no deposit and counting of money the buyer and the cashier), and the advertising company.

     With regard to industrial enterprises, the occurrence of a payment system enabling them to significantly reduce the dependence of the delayed payments from the state budget or the slowness of its business partners.

     State's interest in the implementation of settlement by bank cards are also obvious:

• down a whopping cost of collection of cash and issuance of banknotes and coins;
• simplified accounting of money movement and collection of taxes.

     Technology without payment of cash helps reduce the crime rate around companies with cash, the introduction of these calculations will help to smooth and to some extent reduce the rate of inflation.

     The situation in the market of plastic cards in our country, certainly different from the situation in developed countries. Cashless payments for such countries - is the norm. In Kazakhstan, people trust only in cash.

     The diversity and complexity of changes occurring in the banking sector in Kazakhstan, calls for the development of effective approaches to the mechanism of realization of functions of banks.

     Lack of a uniform technical policy in the infrastructure for widespread use of cards to trade and retail banking operations, hinders the development of the most popular worldwide banking product, not to take advantage of cashless payments and increases the cost of the process of service cards for banks.

     In this regard, conducting research in the field of plastic cards in the interests of all participants is currently very relevant, has a theoretical and practical significance. The newness and relevance of this topic is beyond doubt, as in the future this type of settlement will be familiar to most people in Kazakhstan.

     Recently, many commercial banks have undergone great changes, in order to be competitive in the growing banking competition. Many heads thinking, at the proper level to serve each customer and providing him with a package of necessary services to prevent the loss of clients and its outflow to the competition. Legal research motives of choice customers of banks shows that in the first place they put the quantity and quality of services, etc. - the price of such services in the bank and other banks, the speed of operation and more.

     The aim of this course work is to examine the organization of the bank with plastic cards as a method of implementing a market strategy of the bank and find peculiarity of using plastic cards.

     Subject of  research: plastic cards as a payment instrument.

     Object of study: operations with plastic cards to commercial banks.

     To achieve this objective were as follows:

     - Comprehensively and systematically investigate the system of cashless payments, to reveal its contents and the basic principles of the organization;

     - To study the regulatory framework in the field of legal regulation of non-cash settlements in the Kazakhstan;

     - To consider the types of plastic cards as the basis of customer relationships and the bank;

     - To give the notion of plastic cards provided by commercial banks;

     - To evaluate the organization of work with plastic cards;

     - Explore methods of operations with plastic cards;

     In the process, widely used in scientific methods and techniques of knowledge: logical statements, analysis, grouping, and a systematic approach.

     Were used textbooks, articles of economists, published in leading economic journals. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

     I.  Theoretical aspects of plastic cards 

     Banking - one of the oldest occupations of mankind. Today there are many services provided by banks to their customers. One of the fastest growing types of services is the simulation of plastic cards.

     Plastic card - a tool for non-cash payments and a means of obtaining credit.

     The plastic card - this is a personalized payment tool that provides a person the opportunity to enjoying card cashless payment for goods and / or services and obtain cash at branches of banks and automated teller machines (ATMs).[1.]

     The plastic card as a means of cashless payments was introduced in the U.S. at the turn of the 50s. Few people at that time imagined that it will produce a revolution in banking. However, at present it is quite obvious. Today more than 200 countries use credit cards in payment transactions. It is in most cases they are the key element of the electronic banking systems. Plastic cards confidently occupy leading positions in the organization of monetary turnover of industrialized Western countries, gradually replacing checks and checkbooks.

     Operations with plastic cards have opened up new prospects for financial services clients and correspondingly increased the possibilities of obtaining banking profit due to fees charged to card transactions, increasing the number of clients by providing services to a new type, etc.

     In our country first credit card infiltrated with foreign tourists and businessmen in the late 60s.  Like virtually every transaction involving currencies, work with the cards was strictly regulated, and was under the watchful eye of the public. Within the country the cards were issued - all the work to them restricted to a settlement with the cards of international systems that have been adopted in some hard-currency shops and hotels. [2.]

     The plastic card is a plate, made ​​of special resistant to mechanical and thermal effects of plastic that has the following geometric parameters:

• width -85,595 ± 0,125 mm;
• height - 53,975 ± 0,055 mm;
• thickness -0,76 ± 0,08 mm;
• radius of the circle at the corners of -3.18 mm;

     On the front side of credit cards cause a financial institution logo, trademarks, payment systems, card number, cardholder name, card expiry date. In addition, there is usually a card with a hologram of the character specified payment system, may also attend a special element, visible only under ultraviolet light. On the front side of the chip card is a chip, its location is strictly defined by the standard 1807816-1. On the back of the card are the magnetic strip (which is also a place strictly defined by the standard), signature panel and damage the printing method of the text of the bank. In some payment systems are allowed in a particular field (most often - on the back of the card) to put photo holder. [1.]

     In preparation for the production of graphics card is undergoing, the physical and electrical personalization.

     Under the graphic personalization is sometimes understood to apply to the card printing means a financial institution's logo - the issuer, usually the same - the application using special printers personal information about the holder.

     Physical customization is to be applied to personal data card: the card number, name and owner name, validity period, and sometimes some additional information (e.i. name of the agent bank, which issued the card directly to the client, or an organization that operates the holder) .

     The number of payment cards is a sequence of digits, usually 13 to 19, most - 16. In payment systems, bank card number starts with 6 digits, called the BIN (Bank Identification Number). Ends with a check digit card number, which is calculated from the previous figures with the help of a simple algorithm.

     Embossing (stamping) - a method of physical personalization. Embossed characters - convex, dyed special paint (usually silver, black or gold). Embossing is necessary for visual identification of the cashier or teller of personal data about the holder and to transfer them from the card to slip (invoice-notification).

     "E" cards and the rules are accepted only in electronic devices (ATMs, cash registers, POS terminals).[1.]

     Embossing of cards produced in a special way, the so-called personalization in which the symbols are obtained not convex, and how to print on a typewriter on a sheet of paper, almost flat. Imprinter is not in a position to move personalization on the card text on the slip, which does not perform surgery without the use of electronic devices. Sometimes, instead of printing personalization used the same data graphic printer.

     When personalization is encoded magnetic stripe or the recording of information in the chip.

     Electric personalization allows you to identify the card and its holder, and also to verify the solvency of cards when taking her for payment or issuance of cash. Access to the recorded data is protected by a coded password (or PIN-code).

     PIN-code - a personal identification number - a sequence of digits (usually 4-6, but can be up to 12) is used to identify customers. Due to the fact that the PIN-code is designed to identify and authenticate the client, his knowledge must be known only to the client.

     The bank provides the client with a card, which is associated with a certain amount. This sum or through a loan from the bank, either through their own contributions customer card holder can spend. Realization of payment is that when you buy it on the map shop, "writes" for the customer debt in the amount of the payment. A bank received from the store a document, is deducted from customer's account by that amount in the store.

     There are also POS-terminals, or trading terminals designed for transaction processing in financial settlements with the use of plastic cards with magnetic stripe and smart cards. The use of POS-terminals to automate maintenance operations cards and significantly reduce maintenance time. Capabilities and integration of POS-terminals vary greatly, but typical modern terminal is equipped with devices like reading a smart card and magnetic stripe cards, non-volatile memory, ports for PIN-keyboard, printer, connect to a PC or an electronic cash register . [1.]

     ATMs (automated teller machines) - a special device respectable size and weight, are placed both indoors and outdoors, and some of them are working around the clock. Designed for the issuance and encashment of cash for operations with plastic cards.

     ATM is equipped with card reader, and for users to interact with the card holder as a display and keyboard. Additionally, ATM allows the card holder to receive information about the current state of the account, as well as, in principle, to conduct operations to transfer funds from one account to another. Because ATM is a repository of cash, most models are designed to work in on-line-mode cards with magnetic stripes, but there were also devices that can work with smart cards and off-line-mode.

     Banknotes from an ATM located in the cassette, which, in turn, are in a special vault. Number of tapes determines the number of denominations of banknotes issued by the ATM. Dimensions cassettes are regulated, which makes it possible to charge virtually any ATM bills.

     When purchasing goods, payment for services or work, if the amount of money for settlements is insufficient, then the cardholder will be asked to take a different form of payment. In the absence of funds in the account at all card will be placed in the stop-list (list of blocked numbers are not accepted for processing), its action will be suspended, discontinued operations. [3.]

     Also in stop-list are recorded lost or stolen cards, that eliminates any possibility of unauthorized or malicious use.

     In international practice, the responsibility for any expenditure of money in lost card (provided that the owner reported the incident to the bank) has issued the card bank, not its owner. In Kazakhstan, requirements of banks are inother. First, the loss of card you need to tell the bank not only verbally but in writing. Second, the bank's liability to the owner of a lost card can not concretized. Therefore, you should take care of in advance to this point has been settled in the contract as detailed as possible and specifically.

     The plastic card is a document in the form of cards from an inflexible plastic, non-transferable and helps its holder to send goods and services and money from the account.

     There are many signs by which one can classify cards.

     1. By the material of which they are made:

     - Paper (cardboard);

     - Plastic;

     - Metal.

     At present, almost ubiquitous plastic cards received. However, for the identification of the holder (owner) cards are often used paper (cardboard) cards, sealed or molded in plastic. This laminated card. Lamination is fairly simple, cheap and easily available procedure, and therefore, if the card is used for calculations, then in order to improve security against counterfeiting are more advanced and complex technology of manufacturing of plastic cards.

     In contrast to the metallic plastic cards can be easily heat-treated and pressure (embossing), which is very important to personalize the card before issuing it to the client.

     2. By way of recording information on a map:

     - A graphical recording;

     - Embossing;

     - Bar codes;

     - Encoding the magnetic stripe;

     - The chip;

     - Laser recording (optical card).

     The earliest and simplest form of recording information on the card was and is a graphic. It is still used in all maps, including the most technologically sophisticated. Initially applied only to the card name, cardholder's name and information about its issuer. Later in the universal banking cards had provided a sample signature, name and surname are embossed (mechanically embossed).

     Embossing allowed to execute the operation much faster card payments, making the impression on her slip. The information embossed on the card, immediately transferred to a carbon paper to slip. In order to combat fraud slips may be used without copying the layer, but a way to transfer the information embossed on the card essentially remained the same - mechanical pressure.[1.]

     Embossing is not completely replaced the graphic image. Moreover, with the advent of systems based on paperless, card number and name of the holder were again applied to the card using a graphical method Officers.

     Bar-coding. Record information on the card with the bar-coding was used before the invention of the magnetic strip and the payment systems of distribution did not receive. However, cards with bar codes, similar to those applied to goods that are quite popular in the special card programs do not require calculations. This is due to the relatively low cost of cards and reading equipment. In addition, for better protection of the bar codes are covered by an opaque layer to the naked eye and reads in infrared light.[3.]

     The invention in the late 60's automatic cash dispenser machines have revolutionized and in the card business. In order for such a device could use the card holders, on the back of cards began to stick a strip of magnetic tape.

     On the magnetic stripe bank cards are usually stored in encrypted card number, expiration date, and cardholder's PIN.

     Magnetic recording is one of the most popular to date methods of applying information on plastic cards. But after 15-20 years, it became clear that the magnetic strip will not provide the required level of information protection against fraud and counterfeiting. Then, experts started looking for a better way of recording information. It proved to be a chip (from the English, chip - a crystal with integrated circuit) or microchip. Cards with a chip is also very often called smart cards.