Plastic cards as a payment tool. Bank plastic card as a tool for non-cash payments
Structure of plastic card consumers
Types of plastic cards.
During the development of plastic cards, different types of plastic cards emerged, differing in purpose, functional and technical characteristics.
According to the calculation mechanism:
Double sided
Multilateral
Double-sided cards arose on the basis of bilateral agreements between payment participants, where cardholders can use them to purchase goods in closed networks controlled by the card issuer (department stores, gas stations, etc.).
In contrast to this multilateral systems, which head national bank card associations, as well as companies issuing tourism and entertainment cards, provide cardholders with the opportunity to purchase goods on credit from various merchants and service organizations that recognize these cards as a means of payment. Cards of these systems also allow you to receive cash advances, use machines to withdraw cash from a bank account, etc.
According to functional characteristics:
Credit
Debit
Cards with overdraft
Credit cards are issued for solvent consumers. Their use allows them to have automatically revolving credit without special collateral for purchases. They can also be used to obtain credit in the form of cash from those financial institutions that are members of the relevant system. Potential owners are subject to fairly stringent requirements regarding their creditworthiness. When deciding whether to issue a credit card to a person, the bank carefully checks and analyzes data such as average annual income, credit history, living conditions, occupation, marital status, availability of a bank account, etc.
The issuance of credit cards allows banks to reach a new level of development, attracting new client groups at low levels of operating costs:
Having issued a card once, the bank does not need to have an extensive network of classical institutions, since receiving a loan by a client involves using it in a trade and service enterprise or receiving cash from an ATM;
replenishment of the card and, accordingly, repayment of the loan can also occur through ATMs or other self-service terminals equipped with a cash acceptance module, as well as non-cash transfer to a bank account;
the processing of card transactions is more automated than classic loans, which also makes it easier for the bank to carry out these operations, reducing the cost of operations.
Debit card most common in our country due to a number of objective economic reasons. It is also called a cash card or an asset card. A debit card, like a credit card, has on the magnetic stripe the surname and first name of the owner as a client of a particular financial institution.
A debit card is used to pay for goods and services and withdraw cash from ATMs. Such a card allows you to manage funds only within the available balance on the deposit account to which it is linked. The function of debit cards is mainly to replace paper money in circulation and make non-cash payments using the client’s own funds. Unlike credit cards and cards with permitted overdraft, debit cards cannot lend money to the bank.
Cards with permitted overdraft- this is a natural continuation of the development of debit cards; we can say that this is their improved version. Many of the cards that allow customers to receive funds on credit are debit cards with an allowed overdraft; banks call them credit cards for marketing purposes. Of course, the common name “credit card” is easier to understand than the banking term “card with permitted overdraft.” The word “overdraft” may not be familiar to many potential clients who simply do not understand what this service is. Credit card is a simpler name; almost everyone knows what a loan is. Overdraft is a loan obtained by issuing a check or payment order for an amount exceeding the balance in the account. The overdraft loan is agreed upon when opening an account and cannot exceed a fixed amount. The rights and obligations of the parties related to crediting the account are determined by the rules on loans and credit, unless otherwise provided by the bank account agreement (Article 850 of the Civil Code of the Russian Federation).
From the client's point of view, a card with an overdraft is a payment card that allows payments to be made both from the cardholder's funds deposited in a bank account, and from a loan provided by the bank in the event of insufficient funds in the account. A loan to the card holder is provided only if payments are made using the card and there are insufficient funds in the client’s account to pay them. This is a card with two functionalities: a client account and a credit limit presented to the client by the bank. If there are sufficient funds in the account, card transactions are carried out at the expense of the client’s funds; as soon as there are no longer enough client funds in the account, the bank begins to credit the client in the amount of the established credit limit.
The card can be used like a debit card, paying with your own funds, thereby saving on credit interest. Due to this feature, many clients prefer a card with an overdraft allowed over classic credit cards, although in fact the conditions of both cards can vary greatly from bank to bank, and losses on some tariffs are compensated by preferential treatment on others.
The conditions for providing an overdraft can vary greatly, but there are two main approaches used by banks.
The first is the provision of an overdraft for a short period (1-2 months), after which the client must fully repay the debt. After full repayment, the client again has access to the full credit limit, thus, during the established period, the overdraft is fully repaid and a new one can arise. If the overdraft is not repaid within the specified period, the bank begins to charge increased or penalty interest. This approach has become widespread within the framework of salary projects due to the convenience of repaying debt for a borrower who does not need to visit the bank; transferring wages automatically pays off the debt on the card. Naturally, such an overdraft is usually a small amount and cannot be more than the borrower’s average monthly salary, otherwise the amount of the transferred salary simply will not be able to repay the debt in full. Under such conditions, banks set either a fixed date for each month (for example, until the 10th of each month) or the number of days from the moment the debt arose. Both approaches to deadlines have their pros and cons; a fixed number means a concentration of customer requests for one day; on this day the bank experiences an influx of customers, queues arise, which leads to a deterioration in the quality of service. The maturity approach is more difficult for the customer to track, who may simply forget when they used the card as part of an overdraft. Using the latter approach, the bank, of course, distributes customer visits more or less evenly throughout the month, but at the same time, the bank must promptly notify each client about the need to repay the overdraft several days before the expiration of the authorized debt.
The second approach to the conditions for providing an overdraft is to provide an overdraft for a significant amount and for a long period. In this case, the client must monthly pay the minimum amount established by the agreement with the bank to repay the overdraft and interest for its use. Of course, no one prohibits the client from completely repaying the overdraft during the first month, but it is possible to spread out the repayment period or simply constantly contribute the minimum amount to repay, generating income for the bank. This overdraft is very similar in terms to credit cards.
According to the material from which they are made:
Paper (cardboard);
Plastic;
Metal.
Currently, plastic cards have become almost ubiquitous. However, to identify the card holder (owner), paper (cardboard) cards are often used, sealed or pressed into plastic film. These are laminated cards.
Lamination is a fairly simple, cheap and easily accessible procedure, and therefore, if the card is used for payments, then in order to increase security against counterfeiting, more advanced and complex technology for making cards from plastic is used.
Unlike metal cards, plastic can easily be heat treated and pressed (embossed), which is very important for personalizing the card before issuing it to the client.
According to the method of recording information on the card:
Graphic recording;
Embossing;
Barcoding;
Encoding on magnetic stripe;
Laser recording (optical cards).
The earliest and simplest form of recording information on a card was and remains a graphic image. It is still used in all cards, including the most technologically sophisticated ones. At first, only the surname, name of the card holder and information about its issuer were printed on the card.
Later, a sample signature was provided on universal bank cards, and the last name and first name began to be embossed (mechanically extruded).
Embossing made it possible to process a card payment transaction much faster by imprinting a slip on it. The information embossed on the card is instantly transferred through carbon paper to the slip. To combat fraud, slips can be used without a copy layer, but the method of transferring information embossed on the card remains essentially the same - mechanical pressure.
Embossing has not completely replaced the graphic image. Moreover, with the advent of systems based on paperless technology, the card number and name of the holder again began to be graphically printed on the card using personalizers.
Barcoding. Recording information on a card using barcoding was used before the invention of the magnetic stripe and was not widespread in payment systems. However, cards with barcodes similar to those found on products are quite popular in special card programs where payments are not required. This is due to the relatively low cost of such cards and reading equipment. At the same time, for better protection, barcodes are coated with a layer that is opaque to the naked eye and read in infrared light.
The invention of automatic cash dispensers in the late 60s revolutionized the card business. In order for card holders to use such a device, a strip of magnetic film was glued to the back of the card.
On the magnetic stripe of bank cards, the card number, expiration date and PIN of the card holder are usually written in encoded form.
Magnetic recording is one of the most common methods of applying information to plastic cards today. But after 15-20 years, it became clear that the magnetic stripe no longer provides the required level of information protection from fraud and forgery. Then experts began to look for a more reliable way to record information. It turned out to be a chip (from the English chip - a crystal with an integrated circuit) or a microcircuit. Cards with a chip are also very often called smart cards.
Despite the obvious advantages, chip cards have so far had limited use. The reason is simple - such a card is an order of magnitude more expensive than a card with a magnetic stripe. Only in recent years, when the damage from magnetic card fraud in international payment systems became alarmingly high and continues to grow, was it decided to gradually switch to chip cards.
Not all chip cards, strictly speaking, are chip cards, that is, they have a microprocessor. Experts divide them into two types: memory cards and microprocessor cards themselves. Memory cards can be disposable (write once/read many times) and can be rewritten multiple times. At the same time, the memory capacity is significantly superior to cards with a magnetic stripe and, moreover, allows you to protect the recorded information much better.
In the vast majority of bank card programs, including Russian ones, based on chip cards, “secure memory” is used, as it gives the best price/security ratio.
Fundamentally different possibilities are opened up by real microprocessor cards, since they have their own internal logic and, in fact, are a microcomputer.
In 1981, J. Drexler invented the optical card. Recording and reading information from such a card is carried out by special equipment using a laser. The main advantage of such cards is the ability to store large amounts of information. Such cards are already used for pocket “medical records”, but have not yet become widespread in banking technologies due to the high cost of both the cards themselves and the reading equipment.
Chapter 1. Bank plastic card as a tool for non-cash payments
Improving the economic mechanism in the context of the transition to a market places increasingly higher demands on the functioning of the monetary circulation system, the organization of settlement and cash services for both individuals and enterprises and organizations. The growth of payment turnover and the resulting increase in circulation costs strongly dictates the need to improve the mechanism of money circulation, ensuring the rapidly growing needs for payments and accelerating the turnover of funds while simultaneously reducing monetary circulation costs and reducing labor costs.
The state of the economy of any country largely depends on the organization of national money circulation. That is why central banks of all countries of the world constantly study international experience and trends in the development of money circulation, strive to develop and implement new schemes for its organization based on national characteristics.
Cash transactions are extremely costly for government and commercial financial institutions. The release of new banknotes into circulation, the exchange of old ones, the maintenance of a large staff, the inconvenience and great loss of time of ordinary customers - all this places a heavy burden on the country's economy. One of the possible and most promising ways to solve the problem of cash circulation is the creation of an effective automated system of non-cash payments as a fundamental element of the modern economy.
The use of modern payment systems and high-tech banking products is an indispensable condition for the successful development of new types of retail services. Banking service, focused primarily on the client, involves the introduction and use of payment cards in the field of payments.
Today, bank cards are a key element of electronic banking systems, actively displacing the usual check books and cash. Another important feature is that the card contains a certain amount of information necessary to access a bank account, make payments for goods, services or work, as well as withdraw cash, allowing it to serve as the simplest and most progressive means of organizing non-cash payments.
Most experts believe that the beginning of bank credit cards was laid by John S. Biggins. In 1946, Biggins set up a credit scheme called Charge-it. This scheme involved receipts that were accepted from customers by local stores for small purchases. After the purchase took place, the store handed over the receipts to the bank, and the bank paid them from the customers' accounts. In Flatbush, the classic settlement chain, now used everywhere in the banking card business, was tested for the first time.
However, such an authoritative banking researcher as Lewis Mandell believes that the first mass payment card system was Diners Club, created in 1949. One of the main differences from previous systems was that between clients and commercial companies offering not only goods, but also services, there is an intermediary organization that undertakes settlements. It was this feature that allowed “Diners Club” to become the first mass universal (as opposed to store, “gasoline”, etc.) cards.
On October 1, 1958, the first American Express card was issued. A year later, this company numbered 32 thousand enterprises and more than 475 thousand card holders.
In the 50s, over 100 American banks began their credit card programs.
As card programs grew, most banks faced the main obstacle - the locality of their card service network. And in 1966, Bank of America began issuing licenses to issue BankAmericard cards to other banks. In response, several large competing banks of Bank of America created their own Interbank Card Association - ICA (Interbank Card Association). In 1969, this association bought the rights to the "Master Charge" cards issued by the Western States Bank Card Association, most of the ICA member banks switched to issuing "Master Charge". In turn, the banks that issued BankAmericard insisted that the card program be taken out of the control of Bank of America. So in July 1970, National BankAmericard Incorporated - NBI was created.
Thus, by the beginning of the seventies, two main competitors in the market of universal bank cards had formed in the United States: NBI and MCA. Among non-bank universal cards, American Express stood out.
It should be noted that initially, in the foreign classification, universal cards were divided into cards for “travel and entertainment” (T&E) and purely banking ones. The first ones were issued by Diners Club, American Express, Carte Blanche and were intended mainly for payment for hotels and restaurants, that is, mainly for traveling businessmen. The cards issued by banks had a more “consumer” nature and were intended for “ordinary clients.” By now, these differences have largely disappeared, and such a division is very arbitrary.
In parallel with the development of the American market, there was also an internationalization of card transactions. It dates back to 1951, when Diners Club issued the first license to use its name and scheme in the UK. Competition between American card associations continued in Europe. In 1974, MCA made a significant breakthrough in the competitive race with BankAmericard by signing an agreement with the British Access Card system, which was part of the Eurocard Association. Thus began the cooperation between Eurocard and the American Interbank Card Association, which issues “Master Charge”. This was one of the reasons why in 1976 the NBI renamed its “BankAmericard” card to the now well-known “VISA”. MCA took a similar step in 1980, giving its card the “more international” name “MasterCard”.
Eurocard also did not stand still. Expanding its cooperation with MasterCard, the association entered into agreements with Cirrus and Maestro as new technologies emerged, which allowed it to expand the range of services offered to customers through ATM cards. At the end of 1992, Eurocard International merged with the Eurocheck payment system. The new organization became known as Europay International.
The competition between payment systems took place not only in Europe. In Japan, for example, despite active attempts to conquer this market by VISA and MasterCard, they were losing to JCB cards. The total number of holders of these cards in 1980 was almost twice as large as those issued in Japan by VISA and MasterCard combined.
So, today the largest payment organization is VISA Int., which occupies about 60% of the bank card market. The second largest is Europay/MasterCard Int., with about 30% of the market. The remaining ten percent comes from cards of other international organizations and local cards of various banks.
Banks in our country began to carry out transactions using cards of international banking associations in the second half of 1993.
In domestic and foreign literature, various terms are used to define the concept of a bank plastic card. Very often the concept of “bank card” is replaced by the concept of “credit card”, i.e. “credit cards” refers to all types of bank cards. In this generalized meaning, the concept of a credit card can be found in many print and online publications. Belarusian legislation uses the term bank payment card.
So, according to O.I. Lavrushin plastic card is a general term that denotes all types of cards that differ in purpose, in the range of services provided with their help, in their technical capabilities and organizations. Now there are a great variety of plastic cards. They are actively used in various spheres of the economy and life - banking, trade, transport.
In the textbook by Kravtsova G.I. A bank plastic card is a payment instrument that provides access to a bank account and making non-cash payments for goods and services, receiving cash and carrying out other operations provided for by current legislation.
A similar definition is given in Article 273 of the Banking Code: a bank payment card is a payment instrument that provides access to a bank account, accounts for bank deposits, loans of an individual or legal entity for receiving cash and making non-cash payments, and also ensuring the conduct of other operations in accordance with the legislation of the Republic of Belarus.
According to the payment mechanism, bank cards are:
Debit: these are basically “salary” cards; You can only manage the money that is currently on the cardholder’s card account
Debit cards with the possibility of obtaining an overdraft: allow you to spend more money than is on the card account, since the bank provides an overdraft (short-term loan)
Credit: make it possible to use a loan provided by the bank within the amount (limit) established by it. But then you need to return the debt to the bank along with interest
Based on account ownership, cards are divided into:
Personal: the contract is concluded with an individual;
Corporate: the agreement is concluded with a legal entity, individual entrepreneur.
According to the scope of validity of the cards there are:
Local cards: used in a certain region, part of the state;
National cards: used in calculations throughout the state;
International cards: accepted for payment in any region of the globe.
According to the method of recording information, graphic recording;
Barcoding;
Magnetic strip;
Laser recording.
Bank cards can also be divided by payment systems or card associations (Card Associations) within which the cards are serviced. The most common cards in the world are the cards of the following largest systems: VISA, EuroCard/MasterCard and American Express (AMEX). One card can be supported and serviced by only one payment system.
Visa is a global payment system that provides cardholders, merchants, financial institutions and government agencies in more than 200 countries with access to an electronic payment network. Electronic payments are made using the global innovative processing system Visa Net, which can process more than 24 thousand transactions per second. It provides consumers with protection from fraud and ensures that merchants can make payments. Visa is the world leader in the payment card market, occupying 57% of this market. Types of bank cards issued: Visa Electron, Visa Virtual, Visa Classic, Visa Gold, Visa Platinum, Visa Signature, Visa Infinite, Visa Black Card.
Master Card Inc. is the operator of one of the largest payment systems in the world - it accounts for about 26% of payment cards. Master Card provides services in more than 200 countries, and the number of transactions carried out through this payment system exceeds 22 billion per year.
Please note that some payment systems can only issue cards of a certain type. For example, American Express and Diners Club issue only credit cards, while other lesser-known systems (especially those that operate only within one country) do not risk dealing with credit cards and issue only debit cards. The world leaders VISA and Euro Card/Master Card issue and support both credit and debit cards.
Within payment systems, cards can also be divided into classes. VISA has two main classes - Classic and Gold. MasterCard -Standart and Gold, American Express -Mass and Gold. The choice of a credit card of one class or another significantly affects the amount of the security deposit made when receiving the card. Otherwise, the difference between the classes mainly comes down to a matter of prestige. In addition to the main classes, cards of Platinum, Silver, Basic and a number of others classes can also be issued. Corporate cards are a special type of cards. Moreover, recently such cards have begun to be divided into Business cards (cards for small businesses) and directly Corporate cards.
Within each of these classes, cards can be further divided into a number of subclasses.
Another type of cards issued within payment systems is electronic cards. Such cards are available in many payment systems. In VISA, for example, this is VISA Electron, in Master Card - Maestro. As already noted, such cards are not embossed and are intended for electronic use only. With this card you can get cash from ATMs, and you can pay for goods and services only at retail outlets equipped with special electronic terminals. There are electronic cards that are intended only for receiving cash from ATMs, for example, in the Master Card system, the Cirrus card.
According to the list of additional services, bank cards are divided into classes: - “standard”: regular cards that do not offer benefits and bonuses (VISA Electron, Cirrus/Maestro);
Business cards, “silver”: the moderate price of the card and its service is combined with certain bonuses and benefits (VISA Classic, Master Card Business);
- “gold”, “platinum” (VISA Gold): the high cost of service provides a full range of benefits and additional opportunities.
Bonuses and benefits are additional opportunities that you receive in exchange for more expensive servicing of your card by the bank and only if the bank trusts you! Such additional features include a higher percentage accrued on card account balances; possibility of booking hotel rooms, air tickets, car rentals, etc.
The VISA company, for example, offers VISA Gold cardholders the following services:
global support service around the world (Visa Global Customer Assistance service): blocking lost or stolen cards; emergency cash withdrawal; emergency card replacement;
emergency assistance during travel: 24-hour telephone advice; support for medical issues; medical insurance from the international insurance company International SOS; providing background information on legal issues;
discounts and special offers around the world when paying for goods and services under the Visa World Best Offers program.
Thus, a bank plastic card is a payment instrument that provides access to a bank account and making non-cash payments for goods and services, receiving cash and carrying out other transactions. There are a large number of characteristics by which plastic cards can be classified, among the main ones we can highlight: by the payment mechanism, by the owner of the card; by scope; by the method of recording information; by payment system; according to the list of additional services, etc.
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Chapter I. THEORETICAL FOUNDATIONS OF THE RESEARCH
AND USE OF PLASTIC CARDS.
1.1. The concept of a plastic card, its essence, role and place in the modern money circulation system.
1.2. Classification of plastic cards and mechanisms of their use.
1.3. Economic aspects of using plastic cards.
1.4. The evolution of plastic cards using the example of international payment systems.
Chapter II. MARKET OF PLASTIC CARDS IN RUSSIA.
2.1. Stages of formation of the plastic card market in Russia.
2.2. Characteristics of the current state of the plastic card market in Russia.
Chapter III. MARKET DEVELOPMENT PROSPECTS
PLASTIC CARDS IN RUSSIA.
3.1. Problems of development of the plastic card market in Russia.
3.2. Prospects for the development and improvement of the plastic card market in Russia.
Recommended list of dissertations
Non-cash payment systems using payment cards: global experience and Russia 2004, Candidate of Economic Sciences Krylova, Olga Vladimirovna
Economic conditions for the use of plastic cards in the system of non-cash payments and lending in the Russian Federation 1999, Candidate of Economic Sciences Cherednichenko, Oleg Valerievich
Bank plastic cards as a stage in the evolution of electronic money 2006, Candidate of Economic Sciences Vasiliev, Dmitry Yurievich
Plastic cards as a tool for international payment systems 2003, Candidate of Economic Sciences Kosova, Yulia Vladimirovna
Increasing the efficiency of banking non-cash payment systems: using the example of plastic cards 2008, Candidate of Economic Sciences Kostyuchenko, Alesya Sergeevna
Introduction of the dissertation (part of the abstract) on the topic “Plastic card as a tool for non-cash payments in Russia”
Relevance of the research topic
In the context of the development of world economic relations, there is a process of integration of the economies of individual states and the development of payment systems, in particular, in the direction of the development of non-cash forms of payment, which, in turn, are widely used throughout the world. One of the tools for non-cash payments is a plastic card, which appeared as a result of the evolution of monetary forms. In most economically developed countries, a plastic card is an integral attribute of trade and services. Thus, at the beginning of this century, payments made by plastic cards, as a percentage of the total number of non-cash payments, amounted to 38.3% in the USA, 39% in the UK, and 58.2% in Japan. [ www, bis, from - Bank of International Settlements, Statistics on payment and settlement systems in selected countries - Figures for 2001, April 2003, P. 190-191] In Russia, this figure is currently relatively small - 5.6 % [internal document of the Department of Payment Systems and Settlements of the Bank of Russia “Overview of the Payment System of the Russian Federation”, 2003, Kya2, p. 35].
In turn, characterizing the monetary system of Russia and, in particular, the state of the country’s payment system, it is necessary to note the following current problems: payments for consumed goods and services made in cash create a breeding ground for the flourishing of shadow money circulation, which in general reflected by a low monetization ratio; a significant amount of cash, largely due to the instability of the financial system and, as a consequence, distrust of banks, is directly “in the hands” of the population, and in foreign currencies; significant regional imbalances in the placement of banking capital and assets lead in most regions to the growing destruction of payment relations, a shortage of money supply and financial and credit resources. These and other problems negatively affect payment turnover in Russia, and given the territorial scale of the country, they become relevant and require timely resolution.
In these conditions, the development of automated non-cash payment systems, including payment systems based on plastic cards, becomes an instrument of monetary policy that directly and (or) indirectly contributes to solving the above problems. Despite the economic crisis that the country experienced in the last decade of the last century, and the associated series of financial crises, today, during a period of relative economic stabilization, the Russian plastic card market is characterized as one of the most dynamically developing sectors of the country’s financial market. At the same time, far from the full potential of the positive impact of using plastic cards has been realized.
At the same time, it is worth noting that insufficient attention is paid in the economic literature to the theoretical study of the essence and problems of using a plastic card as one of the payment instruments. Accordingly, there is an underdevelopment of the conceptual apparatus of the field of financial payments using plastic cards. This also affects the practice of using plastic cards in the country.
Therefore, the study of the problems of using a plastic card as a tool for non-cash payments seems especially relevant, and the study of the world practice of using plastic cards and determining the prospects for their development in Russia is currently acquiring specific significance.
Goals and objectives of the study
The purpose of the dissertation is to develop theoretical and methodological approaches to the study of plastic cards as a tool for non-cash payments, as well as to determine the prospects and ways of their development in Russia.
To achieve this goal, the following tasks were solved in the dissertation:
Study of the conceptual apparatus of the field of financial payments with plastic cards, clarification of the definition of the concept of a plastic card and their classification;
Studying the deposit form of money, as well as the mechanism for using various types of plastic cards, in order to reveal the characteristic features of a plastic card as a payment instrument;
Conducting a comparative analysis of a plastic card and other means of payment and instruments to determine the place of a plastic card in the modern money circulation system;
Generalization of world experience in the use of plastic cards in order to determine the boundaries of their use, the socio-economic effect emerging at the micro and macro levels, as well as their impact on the development of the monetary system;
Study of the current state of the field of financial payments using plastic cards, highlighting global trends;
Justification of the need to develop the Russian plastic card market, identifying its main problems that require solutions.
The object of the study is the area of financial payments using plastic cards.
The subject of the study is a plastic card as a tool for non-cash payments and the process of its use.
The theoretical basis of the study is the works of domestic and foreign scientists and practitioners who touched upon in their works the field of finance, money circulation, loans, taxes and payments, including financial payments using plastic cards, including: Avdokushin A.E., Antonov N.G., Gerchikova I.N., Zhukov E.F., Krasheninnikov V.M., Lavrushin O.I., Naumov V.V., McConnell K., Bru S., Miller P.JL, Van- Khuz D.D., Usoskin V.M., Rudakova O.S., Andreev A.A., Ivanov N.V., Sterlyagov A.A., Kulagin V.G., Rubinshtein T.B., Miroshkina O .V., Yurov A.V., Berezina M.P., Kochergin D.A., Egiazaryan Sh.P., Builov M., et al.
The information base of the study is presented by: banking and civil legislation of the Russian Federation; regulations, statistical and reporting materials of the Bank of Russia, other Russian commercial banks, as well as Russian and international payment systems based on plastic cards; periodical printed and electronic publications. The study of experience in using plastic cards was conducted on the basis of data provided by commercial banks, as well as Russian and international payment systems.
The methodological basis of the study was dialectics, logical and historical methods, the provisions of systemic, comprehensive, functional approaches to solving problems. During the research process, other general scientific methods were used, as well as methods of analysis and synthesis, grouping and comparison.
The scientific novelty of the study lies in the development of theoretical and methodological approaches to organizing non-cash payments using plastic cards, as well as in justifying the use of plastic cards in the modern money circulation system as a progressive payment instrument.
The most significant results obtained personally by the applicant:
The conceptual apparatus of the field of financial payments with plastic cards has been studied, which has made it possible to clarify the definition of the concept of a plastic card, as well as to reveal its features as a payment instrument;
The general credit nature of a plastic card and a check has been identified and theoretically substantiated, reflecting the ability to manage deposit money using these payment instruments;
The features of the appearance of plastic cards as a result of the development of the monetary system and the improvement of credit and payment and settlement operations are highlighted;
International and domestic experience in the use of plastic cards has been studied, systematized and generalized, which has made it possible to clarify the classification of plastic cards in accordance with the current state of the field of card payments, as well as to highlight both the boundaries of their application and the socio-economic effect developing at the micro- and macro-level;
The need for state regulation of the Russian plastic card market is substantiated in terms of ensuring the development of domestic payment systems in order to improve the country's monetary system as a whole, as well as establishing transparency and order in the money circulation system.
The theoretical significance of the study lies in the fact that, within the framework of the theory of money and monetary circulation, a substantiated economic characteristic of the plastic card as an instrument of non-cash payments is given, and the necessity and possibility of widespread use of this payment instrument in the modern money circulation system is substantiated.
The practical significance of the study lies in the possibility of using the results obtained, in terms of identified and disclosed problems in the development of the Russian plastic card market, for planning and organizing card projects, as well as in the work of commercial banks operating in this market, to determine the prospects for the development of the field of plastic card payments . A number of provisions of the dissertation can be used to develop lecture courses within the framework of studying the theory of money and monetary circulation, and the study itself, rich in factual and analytical material, can be used as a teaching aid for teachers and students of economic universities.
Approbation of research results
The main theoretical provisions of the dissertation were presented by the author at the annual scientific readings of the Moscow State Social University, as well as the Moscow Financial and Legal Academy. The results of the study are used in the educational process by the Department of “Finance and Credit” of MGSU when teaching the discipline “Money, Credit, Banks”.
The most significant results of the study were used in the activities of the Russian payment system based on STB plastic cards.
Logic and structure of the study
The set goals and objectives of the study predetermined the logic of presentation and structure of the work. The dissertation consists of an introduction, three chapters, a conclusion, a list of references and applications. The work is presented on 178 pages of typewritten text, includes 8 tables, 7 diagrams, 13 appendices. The list of used literature includes 153 titles.
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Conclusion of the dissertation on the topic “Finance, money circulation and credit”, Dolgikh, Mikhail Sergeevich
results of work on creating payment products based on smart cards, by the end of 2001, leading international payment systems made the final decision on a widespread and gradual transition to the use of smart cards of the “EMU” standard.
From that moment on, payment associations stopped funding projects related to improving the technology of using magnetic cards. Incentivizing their members to switch to payments using smart cards, the associations announced providing them with various benefits. Taking into account that the infrastructure for servicing smart cards, unlike magnetic cards, is practically absent in the world, the Visa and MasterCard associations have introduced measures to encourage the adaptation of acquiring networks to accept smart cards. In particular, they reduced the commission rate for acquirers who accept smart cards at ATMs and through point-of-sale terminals. The deadline for the adoption of the EMV standard was announced at the beginning of 2005, when the declaration of transfer of liability for fraudulent transactions should come into force, according to which in the event of a payment transaction using a smart card in an unadapted terminal, the acquirer will be held liable.
Characterizing the use of plastic cards at the beginning of the new century in comparison with other instruments and forms of non-cash payments, it is worth turning to data for the 7 leading economically developed countries (Appendices 1-10). Thus, as of 2001, payments made by plastic cards accounted for more than 35% of the total number of non-cash payments (see Appendix 3) on average per country. At the same time, the minimum level of card payments was 11.3% in Germany, the maximum - 60.4% in Japan. In the vast majority of countries, throughout the last decade of the last century, there was a steady upward trend in this indicator. Only for five years - from 1997 to 2001. the increase in the number of card payments amounted to 37% on average per country. Across all countries, on average there are more than 51 transactions per inhabitant per year (see Appendix 2). The maximum number of transactions per capita is 114 in Canada, the minimum is 15 in Japan.
Considering the distribution of plastic cards with certain functions (see Appendix 5), it is worth explaining that if a card performs several of the functions presented, then it is taken into account for each of them. The number of cards per capita is highest in the United States, with an average of more than five cards per resident. In other countries, on average, there is more than one card per resident. The use of cards to pay for goods (services) occurs more often in France, less often in Germany.
The domestic markets of plastic cards in economically developed countries have acquired a high degree of saturation both in the number of cards themselves and in the variety of card products, the differences between which have often become difficult to determine for consumers. For this reason, leading international payment systems are actively exploring promising markets in developing countries, attracting new banks to the ranks of their participants. For example, due to the acquisition by Western European and American financial institutions of the largest banks in the leading countries of Central and Eastern Europe, the markets for plastic cards in countries such as Poland, the Czech Republic, Slovakia, Hungary, Slovenia and Croatia have undergone radical changes: along with a sharp increase in emission, changes have occurred and in the structure of issued cards, local cards were replaced by debit cards of leading international payment systems.
In general, due to the development of promising markets, including the Russian one, which will be discussed below, the activities of international payment systems are characterized by a stable increase in key indicators: emission volumes, number of transactions, as well as turnover on card transactions. If we compare the share of international payment systems in the market by the cost of purchased goods and services using their own cards, the situation is as follows (see Table 2).
Share of leading international payment systems in the global plastic card market
System name Market share (%)
3 American Express 14
4 Diners Club 1.5
Source: , ,
Engaged in issuing the entire range of plastic cards, from the most affordable mass ones to exclusive ones, the Visa and MasterCard systems respectively occupy a leading position. In turn, the AshEx and Diners Club systems, which specialize in exclusively exclusive cards for wealthy clients, are significantly losing market share.
The scale of activity of the leading systems can be compared using the data in Tables 2 and 3. Moreover, “Visa”, “MasterCard”, “ArmenEx”, and “Diners Club” are approximately equally geographically distributed throughout the world. JCB cards, except in Japan, are accepted in few places.
CONCLUSION
1. In the process of studying the evolution of monetary forms, highlighting its characteristic stages, the author came to the conclusion that the emergence of the plastic card was a manifestation of the progress of credit money, consisting in the emergence and development of its derivative forms, in this case, derivative payment instruments. Their use opens up new opportunities for the development of the monetary system and the improvement of credit and payment and settlement operations. The author believes that one of the main factors that contributed to the emergence of the plastic card was scientific and technological progress, which ensured the improvement of non-cash payments with the help of new technical means and technologies.
2. As a result of a study of the process of development of credit money, a plastic card is classified as a payment instrument used in the field of money circulation and allows one to operate one of the forms of credit money - deposit money. In turn, the study of the features of the mechanism of functioning of deposit money in non-cash circulation made it possible to specify the plastic card as a tool for non-cash payments.
The conceptual apparatus of the field of financial payments with plastic cards has been clarified in terms of eliminating incorrectly used definitions in relation to the card itself, including: “means of payment”, “form of credit money”, “plastic money”, “electronic money”. The use of the latter, according to the author, occurs due to the identification of derivative forms of money with money itself, which is essentially incorrect.
The author has formulated and justified the following definition of a plastic card, which clarifies and complements other existing ones: “A plastic card is a personalized payment instrument used in the field of money circulation through its repeated use to carry out non-cash transfer transactions and (if provided) converting them into cash - monetary form."
3. Based on a comparative analysis of a plastic card and a check, the general credit nature of these payment instruments is theoretically substantiated, which is reflected in the following provisions: like a check, a plastic card has become a payment instrument that emerged as a result of the development and improvement of the deposit form of money; like a check, a plastic card allows you to use deposit money in demand accounts; When using a plastic card, like a check, the principle of orders is used, through which deposit money is set in motion.
4. In determining the place of plastic cards in the modern money circulation system, an analysis of their influence on the development of the monetary system throughout the entire period of the cards’ existence was carried out. As a result, the author came to the following conclusions.
Firstly, the emergence and further use of plastic cards at one time contributed to solving the problem of increasing labor costs associated with the implementation of growing payment, including check, turnover. In other words, the use of cards helped reduce transaction costs.
Secondly, the process of development of plastic cards became part of the natural process of ousting cash from the sphere of circulation, which took place especially expressively over the past century. As a consequence, the dominant position of non-cash turnover in the structure of modern money turnover was achieved and, accordingly, the dominance of deposit money in the total mass of money.
Thirdly, based on a functional approach to considering deposit money when using a plastic card, it is shown that the emergence and subsequent use of plastic cards contributed to the process of development of the function of money as a means of payment.
5. The work reflects that in the process of evolution of plastic cards, their classification changed. Thus, over time, the use of cards was not limited to banking issues, but, on the contrary, became possible for enterprises and organizations in other areas, in whose activities cards replaced and supplemented cash and checks as a payment instrument. As a result, in the process of development of banking and non-banking payment systems, there was a mutual expansion of service infrastructures, as a result of which the bulk of trade and service enterprises began to simultaneously accept cards of different payment systems for payment, which resulted in the erasure of classification differences between these cards.
Thus, in our opinion, the existing classification by issuer, according to which cards are divided into bank and private cards, or into bank cards and tourism and entertainment cards, becomes either insignificant, that is, of an explanatory nature, or does not correspond to the current situation in the field of card payments . In this case, it becomes sufficient to classify cards depending on the organizational scheme of the payment system, according to which cards of bilateral systems and cards of multilateral systems are distinguished.
Taking into account the growing use of prepaid cards - a relatively new type of plastic cards, the author clarified their classification depending on the type of payment scheme, regulated by the nature of the relationship between payment participants. According to it, prepaid cards have been added to the existing types of plastic cards - credit, debit, payment. Their main difference from other types of cards is that the basis for issuance is an agreement that does not provide for the opening of a bank account for the future holder of a prepaid card or the provision of a loan, but imposes on the issuer the obligation to fulfill monetary obligations in favor of the holders of these cards or third parties, retailing goods (providing services) using prepaid cards, at the request of the latter.
6. Taking into account the relatively small experience of using plastic cards in Russian practice, the work analyzes foreign experience in the field of card payments, characterized by the activities of both leading international payment systems and smaller-scale payment systems in certain economically developed countries. This made it possible to systematize and generalize the experience of using plastic cards, as a result, the boundaries of their use were determined, as well as the possible result from certain options for using plastic cards, which develops separately for each of the main participants in settlements.
It is also clearly shown that, unlike other means of payment and instruments, the plastic card arose and developed due to the conscious actions of commercial institutions. As a result, to date, due to active issuance for more than forty years, the plastic card has become a payment instrument, indispensable in the everyday life of the majority of the economically active population of developed countries of the world, while being part of the consumer culture and lifestyle. Due to certain advantages in their use, plastic cards have complemented cash and checks in the field of consumer payments, occupying a certain niche in the modern money circulation system.
7. In turn, the Russian practice of using plastic cards is conditionally divided into three periods: before 1990 - the period of service and single issue of cards of international payment systems; from 1990 to August 1998 - the period of Russian banks’ entry into international payment systems and the creation of Russian payment systems; since 1999 - the post-crisis period of formation of the plastic card market. It was noted that, since the issue and servicing of plastic cards is one of the areas of banking activity, and to date, banks have been mainly involved in the introduction of plastic cards in Russia, the general state of the plastic card market is inextricably linked with the state of the country’s banking system as a whole .
8. An analysis of the current state of the plastic card market in Russia revealed the following features. The basis of the market is made up of cards issued as part of salary projects: their share in the total issuance is on average about 80%, in industrial and mining regions this figure reaches 98%. Both before the 1998 crisis and after it, Russian banks actively pursued a policy of attracting large enterprises and organizations to participate in salary projects, which are less costly and organizationally simpler for banks. At the same time, in most salary projects, mass debit cards of international payment systems have been and are currently used. This determines the predominant position of international payment systems in the Russian market at the moment.
At the same time, holders of these cards are offered the most minimal set of services, in the form of using an ATM and paying for goods (services) at the relevant trade and service enterprises. And since in the whole country the network of trade and service enterprises that accept these cards for payment is poorly developed, concentrating mainly in especially large cities, their holders are forced to withdraw cash through ATMs. This explains the overwhelming share of cash issuance transactions - 92% of the total volume of transactions carried out in the country over the year using plastic cards from Russian banks.
9. In this regard, the question arises about the reasons for the decision of the majority of Russian banks to introduce technologies of international payment systems, created initially to service international payments, and not to exclusively receive cash, as is the case in Russia. Taking this into account, the author highlights the fact that, in comparison with international payment systems, membership in Russian payment systems (due to lower transaction costs, lower membership fees, no need to divert funds as insurance deposits, lower cost of necessary equipment and plastic cards themselves) cards) ultimately costs banks less. On the other hand, the author noted the fact that international payment systems, for which the Russian market is especially attractive, in every possible way stimulate the issuance of their cards, sometimes directly subsidizing them. Among the reasons why Russian banks enter international payment systems, the following are highlighted: following a proven scheme for project implementation; creation of a certain image of the issuer; no need to independently introduce novelty when implementing the project; the desire to provide cards with the ability to be serviced outside the infrastructure of the salary project.
The author has found that future issuers do not pay attention to the analysis of local conditions, as well as to the analysis of the economic efficiency of the card project as a whole. Therefore, the economic efficiency of most projects using cards of international payment systems is very low, largely due to the need to service the mass of cash and the impossibility of servicing non-cash trade turnover. This is shown in comparison with more successful local projects based on cards of Russian payment systems. Thus, the conclusion is justified that the technology often used is not adapted or simply does not suit the conditions of both individual areas of implementation of salary projects and the majority of the Russian plastic card market.
10. Assessing this problem on a national scale, the author established that a picture is emerging of the development of the Russian plastic card market, which has been rapidly developing over the past three years and has significant potential capacity, under the influence and in the interests of leading international payment systems, among which the “system” is particularly active. Visa". The latter, largely due to its financial resources, occupies a leading position in the Russian market. Such a development of events, in the absence of a unified national payment system, instead of which Russian payment systems act as direct competitors, at a minimum, does not meet the interests of the majority of the main participants in settlements - primarily cardholders. This also gives grounds to talk about a certain external control over internal payments in the country, which, in turn, does not meet state interests, specifically the requirements of economic and state security in general.
11. The author believes that in Russia, in a situation of huge illegal circulation of cash, and at the same time a shortage of cash, especially affecting geographically remote regions, which directly affects the socio-economic situation of these regions, the development of the plastic card market should be included in a number of priority objectives of monetary policy. Moreover, if in Western countries the development of plastic cards took place in a situation of a high level of financial services to the population and against the backdrop of a stable economic situation, then in Russia, taking into account the problems of the monetary system, plastic cards, as reflected in the dissertation, can help solve them . However, the current legislative framework does not stimulate the development of the plastic card market, and also creates an opinion among payment participants that the state is not interested in establishing transparency and order in the field of retail money turnover.
The author notes the growing relevance of the problem of ensuring the security of payments with plastic cards from year to year, which requires, due to this, special attention in advance. At the same time, the trend observed today throughout the world to switch to the use of plastic cards with a microprocessor in payment systems certainly helps to increase the degree of security of payments in general.
12. Taking into account the current situation, priority directions for the development of the plastic card market have been identified, among which are its untapped areas in the form of payments made by the majority of the population on a regular basis for consumed services: rent, telephone payments, electricity and gas, other utilities, cellular communications and Internet.
Among the market development factors noted: the potential of Russian development companies offering modern technical and technological solutions for payment systems and providing the necessary support for card projects (including those using smart cards); the situation developing in the country's financial markets, which encourages banks to attract private clients for the purpose of providing them with comprehensive services, including transactions with plastic cards; the imminent creation of a credit bureau, among other things, will simplify the procedure for issuing credit cards, which in the future will help reduce the cost of loans provided.
List of references for dissertation research Candidate of Economic Sciences Dolgikh, Mikhail Sergeevich, 2004
1. Regulatory documents
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8. Letter of the Ministry of Finance of the Russian Federation “Standard rules for the operation of cash registers when making cash settlements with the population” dated August 30, 1993 No. 104.
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10. Regulations of the Bank of Russia “On the procedure for issuing bank cards by credit institutions and making settlements on transactions carried out using them” dated April 9, 1998 No. 23-P
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Introduction
1. International payment systems
1.1 The emergence of bank plastic cards
1.2 The concept of plastic cards
1.3 Issuers and acquirers
1.4 Payment system and types of cards
2. Market of bank plastic cards in the Russian Federation
2.1 Russian bank card market in numbers using the example of the Central Bank of the Russian Federation
2.2 State regulation of bank plastic cards in the Russian Federation
2.3 The problem of underdevelopment of bank cards in the Russian Federation
Conclusion
Applications
Introduction
The topic I have chosen, “Bank plastic cards as a modern tool for non-cash payments,” is important at the present stage of development of banking systems.
In modern society, on the initiative of participants in the economic process, many transactions are concluded daily for the acquisition of goods and services, including financial instruments. Transactions are paid for using money either in circulation or in the form of deposits in bank accounts, and credit may also be used. In addition, the budget is replenished through contributions from business entities and individuals, as well as financing of government programs and budgetary institutions and organizations. All arising monetary obligations are regulated either by transferring cash (cash payments) or by transferring funds from accounts to accounts opened in banks (non-cash payments).
The relevance of the research topic in modern conditions of development of world economic relations is the process of integration of the economies of individual states and changes in the operating conditions of payment systems, which is manifested, first of all, in the development of non-cash forms of payment. One of the instruments of non-cash payments, the rapid development of which has been observed in recent years, is a bank card; its widespread use simultaneously characterizes the degree of integration of the banking system and society, the development of banking operations and payment turnover.
The subject of study is the topic "Bank plastic cards as a modern tool for non-cash payments."
The object of study of this work is the latest data from the Central Bank of the Russian Federation on the development of bank plastic cards.
The purpose of this work is to establish the importance of bank cards in the modern world, consider the development of bank plastic cards in the Russian Federation, identify shortcomings and, after analyzing, find ways to improve.
To achieve this goal, the following tasks should be studied:
The emergence of bank cards
2. The concept of plastic cards
Issuers and acquirers
Payment system and types of cards
Market of bank payment cards in the Russian Federation
1. International payment systems
1.1 The emergence of bank plastic cards
It is believed that the idea of credit cards was put forward by the Boston journalist E. Bellamy in the 80s of the last century, describing them in his futurological story “Look Back to the World of the Year 2000.”
The time of appearance of bank plastic cards is to some extent a controversial issue. It all depends on what cards we are talking about. In the CIS, even many bank employees, when talking about cards, confuse different concepts. Some people talk about credit cards, some call them bank cards, some call them plastic cards. Although these concepts overlap, they are not precise. In fact, when we talk about plastic cards, we only mean the material from which they are made. By calling them banking, we clarify who issues them. When we talk about credit cards, we mean a payment scheme between card holders and the issuer, which may not be a bank, but, for example, a store or an insurance company.
As strange as it may seem, the first to appear were credit cards, which were not yet bank or plastic cards. Their purpose was to confirm the client’s creditworthiness outside his bank. Naturally, such a means of lending could appear no other than in the United States, where consumer credit for private individuals has been rapidly developing since the end of the 19th century.
As early as 1914, some retailers and oil companies began issuing special cards to their wealthiest regular customers in order to “stick” these customers to themselves. In 1928, the Boston company Farrington Manufakturing produced the first metal plates, and then plastic ones, on the surface of which information about the card holder and its expiration date were applied. The process of applying embossed alphanumeric and special characters to a card was called embossing. The seller put such a plate into a special machine called an imprinter, and the letters embossed on it were imprinted on the sales receipt. After that, all that was left was to enter the purchase amount and send the check to the bank for redemption. In subsequent years, such elements of a financial credit scheme were invented as minimum monthly debt repayment, a deferment period, that is, interest-free lending, and many others.
Most experts believe that the beginning of bank credit cards was laid by John S. Biggins, a consumer loan officer at Flatbush National Bank in Brooklyn, New York. In 1946, Biggins set up a credit scheme called Charge-it. This scheme involved receipts that were accepted from customers by local stores for small purchases. After the purchase took place, the store handed over the receipts to the bank, and the bank paid them from the customers’ accounts.
The first American Express card was issued on October 1, 1958. A year later, this company numbered 32 thousand enterprises and more than 475 thousand card holders. The main reason was the existing extensive international network of servicing American Express traveler's checks and the huge financial resources that made it possible to provide loans to customers.
In the 1950s, over 100 American commercial banks began their credit card programs. But, perhaps, a fundamentally new period in the development of the card business began when the first and second largest commercial banks entered it: Bank of America and Chase Manhattan Bank. This happened in 1958.
As card programs grew, most banks faced the main obstacle - the local network for servicing their cards. In 1966, Bank of America began licensing BankAmericard cards to other banks. In response to this, several large competing banks of Bank of America created their own Interbank Card Association - ICA (Interbank Card Association). In 1969, the association bought the rights to Master Charge cards, issued by the Western States Bank Card Association, and most ICA member banks switched to Master Charge cards. In turn, the banks that issued BankAmericard insisted that the card program be removed from the control of Bank of America. So in July 1970, National BankAmericard Incorporated - NBI was created.
In parallel with the development of the American market, there was also an internationalization of card transactions. It dates back to 1951, when Diners Club was granted the first license to use its name and scheme in the UK.
Around the same time, the British Hotel and Restaurant Association began issuing the BHR credit card, which, although not a bank card, was still a universal card. In 1965, this system merged with its Swedish competitor Rikskort, owned by the Wallenberg family, to establish Eurocard International, headquartered in Sweden.
The competition of American association cards in Europe continued. In 1974, MCA made a significant breakthrough in the competitive race with BankAmericard by signing an agreement with the British ExpressCard system, which was part of the Eurocard Association. This is how the cooperation between Eurocard and the American Interbank Card Association, which issues Master Charge, began.
This was one of the reasons why in 1976 the NBI renamed its BankAmericard card to the now known VISA. MCA took a similar step in 1980, giving its card a new name - MasterCard. It also did not stand still. Expanding its cooperation with Mastercard, this association, as new technologies emerged, entered into agreements with Cirrus/Maestro, which made it possible to expand the range of services offered to customers through cards for receiving cash from ATMs. At the end of 1992, Eurocard International merged with the Eurocheque payment system. The new organization began to be called Europay International.
The competitive struggle unfolded between payment systems not only in Europe. In Japan, for example, despite active attempts by Visa and MasterCard to conquer this market, they lost to JCB cards. The total number of holders of these cards in 1980 was almost 2 times more than Visa and MasterCard issued in Japan combined.
1.2 The concept of plastic cards
A plastic card is a personalized payment instrument that provides the person using the card with the opportunity to make cashless payments for goods and/or services, as well as receive cash at bank branches (branches) and automated teller machines (ATMs). Trade/service enterprises and bank branches that accept the card form a network of card service points (or receiving network).
The peculiarity of sales and cash withdrawals by cards is that these operations are carried out by stores and, accordingly, banks “on credit” - goods and cash are provided to customers immediately, and funds for their reimbursement are credited to the accounts of service companies most often after some time (no more than several days). The guarantor of fulfillment of payment obligations arising in the process of servicing plastic cards is the issuing bank. Therefore, the cards remain the property of the bank throughout their entire validity period, and clients (card holders) receive them only for use. The nature of the issuing bank's guarantees depends on the payment authority granted to the client and recorded by the class of the card.
.3 Issuers and acquirers
The issuing bank, issuing cards and guaranteeing the fulfillment of financial obligations associated with the use of the plastic card issued by it as a means of payment, does not itself engage in activities that ensure its acceptance by trade and service enterprises. These tasks are solved by the acquiring bank, which carries out the full range of operations for interaction with card service points: processing requests for authorization, transferring funds for goods and services provided with cards to the points’ settlement accounts, receiving, sorting and forwarding documents (paper and electronic), recording transactions using cards, distribution of stop lists (lists of cards for which transactions for one reason or another are currently suspended), etc. In addition, the acquiring bank can issue cash using cards both in its branches and through its ATMs. The bank can also combine the functions of acquirer and issuer. It should be noted that the main, integral functions of the acquiring bank are financial, related to the execution of settlements and payments to service points. As for the technical attributes of its activities listed above, they can be delegated by the acquirer to specialized service organizations - processing centers.
The fulfillment of their functions by acquirers entails settlements with issuers. Each acquiring bank transfers funds to service points for payments from card holders of issuing banks included in this payment system. Therefore, the appropriate funds (and possibly any cash refunds) must then be remitted to the acquirer by these issuers. The prompt execution of mutual settlements between acquirers and issuers is ensured by the presence in the payment system of a settlement bank (one or more), in which member banks of the system open correspondent accounts.
.4 Payment system and types of cards
We will call a payment system a set of methods and the entities implementing them that provide, within the system, the conditions for the use of bank plastic cards of the agreed standard as a means of payment. One of the main tasks solved when creating a payment system is to develop and comply with general rules for servicing cards of issuers included in the system, conducting mutual settlements and payments. These rules cover both purely technical aspects of card transactions - data standards, authorization procedures, specifications for the equipment used, etc., and financial aspects of card servicing - settlement procedures with trade and service enterprises that are part of the receiving network, rules for mutual settlements between banks , tariffs, etc.
Thus, from an organizational point of view, the core of the payment system is the contractual association of banks. The payment system also includes trade and service enterprises, forming a network of service points. For the successful functioning of the payment system, specialized non-financial organizations are also needed to provide technical support for card servicing: processing and communication centers, technical service centers, etc.
The processing center - a specialized service organization - ensures the processing of requests for authorization and/or transaction protocols received from acquirers (or directly from service points) and/or transaction protocols - recorded data on payments made through cards and cash withdrawals. For this purpose, the center maintains a database, which, in particular, contains data on banks - members of the payment system and cardholders. The center stores information about cardholder limits and fulfills requests for authorization if the issuing bank does not maintain its own database (off-line bank). Otherwise (on-line bank) the processing center forwards the received request to the issuing bank of the authorized card. Obviously, the center also ensures that the response is forwarded to the acquiring bank. In addition, based on the transaction protocols accumulated during the day, the processing center prepares and sends final data for mutual settlements between banks participating in the payment system, and also generates and sends stop lists to acquiring banks (and, possibly, directly to service points). The processing center can also meet the needs of issuing banks for new cards, ordering them at factories and subsequent personalization. It should be noted that an extensive payment system may have several processing centers, the role of which at the regional level can also be played by acquiring banks.
Communication centers provide payment system entities with access to data networks. The use of special high-performance communication lines is due to the need to transfer large volumes of data between geographically distributed participants in the payment system when authorizing cards in trading terminals, when servicing cards at ATMs, when conducting mutual settlements between system participants and in other cases.
During the development of card systems, different types of plastic cards emerged, differing in purpose, functional and technical characteristics.
According to the payment mechanism:
1 Double-sided cards
· arose on the basis of bilateral agreements between settlement participants;
· cardholders can use them to purchase goods in closed networks.
2.1 Multi-sided cards
· head national bank card associations;
· provide the cardholder with the opportunity to purchase goods on credit from various merchants and service organizations;
· receive cash advances;
· use machines to withdraw cash from a bank account, etc.
2. According to their functional purpose, the following types of cards are distinguished:
· credit cards used in credit payment systems;
· debit cards - used in debit payment systems;
· cards with overdraft.
3. By functional purpose:
1 Credit cards:
· payment for various services and goods using a loan provided by a bank or a specialized service company, without having either cash or money in a bank account;
· it is necessary to have an agreement with the bank in which the client undertakes to repay the debt incurred as a result of payment to the bank within a certain period of time.
3.2 Debit cards:
· used to pay for goods and services, obtain cash from banks by directly debiting money from the payer’s account;
· the client manages only the amount from his bank account;
· card processing in on mode.
· the ability to make payments in excess of the amount credited to the cardholder’s account;
· this relatively small amount is interpreted as an automatic provision of a loan without a special loan agreement.
4. Based on the material from which the card is made:
· paper;
· plastic;
· metal.
Currently, plastic cards have become almost ubiquitous. However, paper (cardboard) cards sealed or pressed into plastic film are often used to identify the card holder. This is card lamination. If the card is used for payments, then in order to increase security against counterfeiting, more advanced and complex technology for manufacturing cards from plastic is used. At the same time, unlike metal cards, plastic is easily heat-treated and pressure-treated, which is very important for personalizing the card before issuing it to the client.
Plastic cards are also classified according to the method of recording information (see Table 1) and by issuer (see Table 2).
The main advantages of bank cards (especially international payment systems) are their versatility. Payment systems are interested in their widest possible distribution. For example, bank cards can be used in shops, cafes, restaurants, museums, cinemas, casinos, gas stations, train stations, airports - the list goes on for quite a long time.
Unlike bank plastic cards, private commercial or club cards are used only in the company's PTS, i.e. cards for paying for restaurant services, no matter how wide the network of points around the world, are limited by the limits of such a system. These cards cannot be used to pay for goods in stores or receive other services.
Bank and other cards used for payments:
stand-alone "electronic wallet";
“electronic wallet” with duplicate account with the issuer;
“account key” is a means of identifying the owner of an account maintained with the issuer.
It should be noted that the vast majority of bank cards are an identifier, not a wallet. These include all Visa, Eurocard/MasterCard, American Express cards. Typically, smart cards are used as “electronic wallets”, and cards with a magnetic stripe are very rarely used as a “wallet”, since the magnetic stripe does not provide an acceptable level of protection for the information recorded on it by the issuer.
However, it should be noted that, according to experts, in the foreseeable future the share of smart cards in the global plastic services market will become dominant.
2. Market of bank plastic cards in the Russian Federation
2.1 Russian bank card market in numbers using the example of the Central Bank of the Russian Federation
According to the Bank of Russia, in the first half of 2011, Russian banks issued 157.7 million cards. The increase for the first half of the year amounted to 13.3 million cards. Compared to 2010, the number of issuing and acquiring banks increased from 688 at the end of 2010 to 692 at the end of the first half of 2011. This is 69.2% of the total number of credit institutions.
The number of card transactions in the first half of the year increased to 1.9 billion transactions, and the volume of card transactions, including cash withdrawal transactions, increased to RUB 7,774.9 billion. Moreover, for the entire 2010 this figure amounted to 12,849 billion rubles. The number of receiving devices also increased significantly and at the end of the first half of 2011 amounted to 788 thousand units, an increase of 95 thousand.
The dominant position among payment systems on the Russian market is occupied by international payment systems. They account for 137.2 million cards out of 157.7 million cards in circulation in Russia. This is 87% of the total emission. It should be noted that according to the Central Bank of the Russian Federation, the share of “active” cards in the card issue of international payment systems is quite low - only 52%, while for Russian payment systems it is 85%. This is explained by the fact that a significant share of the issue was carried out within the framework of salary projects, i.e. cardholders did not open them themselves, and, therefore, use them reluctantly or do not use them at all.
For cards of international payment systems, the share of transactions to receive cash is higher than for cards of Russian payment systems - 61% and 51%, respectively; and the share of the volume of cash receipt transactions is also significantly higher - 83% and 54%, respectively. This also suggests that holders are much more likely to use cards from Russian payment systems to pay for goods and services (see Table 3, Table 4).
The structure of cards issued is still dominated by debit cards, which account for 71.6% of the issue. However, the shares of credit and prepaid cards are growing year by year. At the end of the first half of 2011, the share of pure credit cards in the total issue was already 7.6%, debit cards with overdraft - 15.2%. Thus, the share of cards with a credit function (in one form or another) was 22.8%. The share of prepaid cards is 5.6%. The development of the card industry in different regions of Russia is traditionally not uniform. The highest rate of cards per capita - 1.6 - is in the Central Federal District. This is higher than the average for the Russian Federation (1.1 cards). It also has the highest number of ATMs and electronic terminals per million inhabitants - 1033 and 4955 devices, respectively. Two more districts - Northwestern and Ural - also exceed the national average for cards per capita and for ATMs and electronic terminals per capita. (see diagrams 1,2,3,4)
However, the highest average transaction was noted in the Ural Federal District - 6179 rubles, while in the Central Federal District - 5341 rubles. The center was also surpassed in this indicator by the Siberian and North Caucasus districts. At the same time, it should be noted that despite the fairly high development of ATM networks on the territory of the Russian Federation, the population uses them mainly to withdraw cash. And the low level of provision of trade and service enterprises with POS terminals restrains the growth of non-cash retail payments (see diagram 4).
2.2 State regulation of bank plastic cards in the Russian Federation
In accordance with the Regulations on the issue of bank cards and on transactions performed using bank cards dated December 24, 2004. No. 266-P, a credit institution has the right to issue bank cards of the following types: payment (debit) cards, credit cards and prepaid cards.
A prepaid card is intended for its holder, an individual, to carry out transactions, settlements for which are carried out by the issuing credit institution on its own behalf at the expense of funds provided by the holder, an individual, or funds received by the issuing credit institution in favor of the holder, an individual , if the possibility of using funds received from third parties is provided for in an agreement between the holder - an individual and the credit institution - issuer. A prepaid card certifies the right of its holder - an individual - to claim against the credit institution - issuer for payment for goods (work, services, results of intellectual activity) or for the issuance of cash.
A credit organization has the right to engage bank payment agents to distribute payment cards issued by this credit organization, as well as distribute payment cards issued by other credit organizations and foreign legal entities that are not foreign banks on the territory of the Russian Federation.
Specific conditions for the provision of funds for settlements on transactions made using payment (debit) cards, credit cards, the procedure for returning funds provided, the procedure for documentary confirmation of the provision and return of funds may be determined in an agreement with the client.
On the territory of the Russian Federation, credit organizations carry out settlements with trade (service) organizations for transactions performed using payment cards, and issue cash to payment card holders who are not clients of these credit organizations.
A credit institution has the right to simultaneously issue bank cards, acquire payment cards, and distribute payment cards. The issuance of bank cards, acquiring of payment cards, as well as the distribution of payment cards is carried out by credit institutions on the basis of internal bank rules developed by the credit institution in accordance with the legislation of the Russian Federation, including these Regulations, other regulations of the Bank of Russia, and the rules of settlement participants containing them rights, obligations and procedure for settlements between them.
A bank account agreement (bank deposit agreement) for performing transactions using a prepaid card is not concluded.
Specific conditions for the calculation and payment of interest (interest rate, payment terms and other conditions) on the loan provided for settlements on transactions made using payment (debit) cards, credit cards, and on the client’s cash balances in his bank account, may be determined in the agreement with the client.
Payment by a credit institution of interest accrued on the balances of funds in the client's bank account is carried out on the basis of settlement documents in a non-cash manner by crediting funds to the client's bank account.
The Legislative documents of the Russian Federation contain the following definitions of terms:
ATM is an electronic software and hardware complex designed to perform, without the participation of an authorized employee of a credit institution, operations of issuing (receiving) cash, including using payment cards, and transmitting orders to a credit institution to transfer funds from a bank account (deposit account) client, as well as for drawing up documents confirming the relevant transactions;
Personalization is the procedure for applying information provided for by the rules of settlement participants to a payment card and recording it in the microprocessor memory and on the magnetic strip of a payment card;
Register of payments for transactions using payment cards - a document or a set of documents containing information about transactions performed using payment cards for a certain period of time, compiled by a legal entity or its structural unit that collects, processes and distributes information to payment participants - credit institutions transactions with payment cards (processing center), and provided in electronic form and (or) on paper;
Electronic journal - a document or a set of documents in electronic form, generated (generated) by an ATM and (or) electronic terminal for a certain period of time when performing transactions using these devices.
The issuing credit institution is obliged to determine the maximum amount within which it assumes obligations on one prepaid card (hereinafter referred to as the prepaid card limit). The prepaid card limit established by the issuing credit institution must not exceed 100,000 rubles or an amount in foreign currency equivalent to 100,000 rubles at the official exchange rate of the Bank of Russia in effect on the date of issue of the prepaid card. (see Appendix 2)
2.3 The problem of underdevelopment of bank cards in the Russian Federation
Now in our country there are about 25 million bank cards of various systems in payment circulation. Approximately 15 million are international bank cards VISA, EuroCard / MasterCard, more than 8 million cards of private payment systems. Since 2002, 50 Russian banks have established their own production of plastic cards.
As for servicing plastic bank cards, there are serious problems with this in our country. In total, about 3 million trade and service enterprises are equipped with electronic terminals and can accept cards for payment. If we talk about ATMs, there are now only 1.5 million of them in the country. There are also just under 489 thousand cash issuing points in the country. It should be noted that today the network of ATMs and terminals is developed only in Moscow and regional centers.
The underdevelopment of the technical infrastructure for servicing bank cards is one of the reasons for the small number of cardholders in our country.
Thus, in order to improve the operation of payment systems and increase the number of bank card holders in the Russian Federation, in my opinion, trading enterprises should be equipped with electronic terminals (which can accept cards for payment) as much as possible.
Conclusion
Thus, in the process of studying the topic “Bank plastic cards as a modern tool for non-cash payments” I made the following conclusions:
Bank plastic cards are of no small importance in payment methods, since in the context of increased competition in the retail services market, banks and payment systems began to pay more attention to improving the quality characteristics of their products, stimulating customers to make purchases using cards, including by providing an overdraft for accounts for settlements using payment cards. And banks are looking for new ways to conquer the market, they are trying to interest the client so that he uses the card as often as possible. At the same time, the essence of a payment card is not a piece of plastic at all, but the organization of a well-functioning system of non-cash payments within the payment system. As part of the study of the card payment system, the issue related to the influence of the payment instruments used on monetary policy, which is the most interesting and controversial;
2. In the Russian Federation, there is an underdeveloped technical infrastructure for servicing bank cards due to the fact that today the network of ATMs and terminals is developed only in Moscow and regional centers;
To improve the operation of payment systems and increase the number of bank card holders in the Russian Federation, in my opinion, trading enterprises should be equipped with electronic terminals (which can accept cards for payment) as much as possible.
Thus, the goal of my work has been achieved.
bank plastic card non-cash
List of used literature
1. Antonovich O. A, Ignatov A. A. Bank cards: concept, types, features // Banking Bulletin. - 2008-No. 32 - P.53-55.
Antonovich O. A, Ignatov A. B Bank cards: past, present, future. // Banking Bulletin. - 2004 - No. 33 - P.2-5.
Batyukov A.D., Sotin D.V. Plastic money: from innovation to system // Bulletin of the Association of Belarusian Banks. - 2009 - . No. 31. - P.48-52.
Guchko A.A. Payments with bank plastic cards // Banking Bulletin. - 2005 - No. 2/259. - P.5-52.
Korolenok V.K. BelKart system // Banking Bulletin. - 2007 - No. 9/266. - P.40-52.
Vorobiev I.I. Card business is not a house of cards // Business. - 2006 - No. 9. - P.8-13.
Gusarov V.V. Strategic directions for the development of the plastic cards market // Banking Bulletin. - 2007 - No. 4. - P.9-13.
Zubarev G.A. Processing center as an integral part of the non-cash payment system // Banking Bulletin. - 2005 - No. 7. - P.32-33.
Material from the report of the Retail Banking Research company "By 2007, the number of ATMs in the world will reach 1.5 million." // World of cards. - 2006 - No. 9. - P.28-30.
Olekhnovich A.E. Assessing the effectiveness of electronic payments. - 2006 - No. 2. - P.49-54.
Plastic cards: Practical encyclopedia / A.A. Andreev, E.L. Bystrova and others; Edited by A. A. Andreeva. - M.: Publishing group "BDTS-Press", 2006. - 576 p.
Pishchik I.A. By the beginning of 2006 the volume of plastic cards issued should exceed 2.5 million pieces // Banking Technologies. - 2005 - No. 7. - P.12-13.
Pishchik I.A. State and prospects for the development of the payment system and non-cash payments // Banking Bulletin. - 2000 - No. 17. - P.12-16.
REGULATIONS ON THE ISSUANCE OF BANK CARDS AND ON OPERATIONS PERFORMED USING PAYMENT CARDS dated December 24, 2004 No. 266-P
Applications
Annex 1
Table 1.
BY METHOD OF RECORDING INFORMATION Graphic Embossing magnetic stripe laser recording the earliest and simplest form of recording information allows you to process a card payment transaction much faster by imprinting a slip on it used before the invention of magnetic stripe one of the most common methods of putting information on a map today Very expensive technology Even more expensive cards than chip cards until now time is used in all maps low privacy very popular in payment systems The most reliable storage of information The recording technology on them is similar to recording on laser discs last name, first name, sample signature and information about the issuer are entered not distributed in payment systems not widespread in banking technologies Table 2.
Table 3. Summary statistics of the Russian payment card market
I half of 2011 Number of cards issued, million units. Number of issuing banks and acquirers (% of the total number of credit institutions 700 KOs (66.2%) 688 KOs (68.0%) 692 KOs (69.2%) Number of payment systems Number of transactions with cards, billion units. Volume of transactions with cards, billion rubles. Number of devices accepting cards, thousand units. Table 4. Payment card market statistics for the first half of 2011, distribution by payment systems
International PS Russian PS Number of “active” cards, million units. (for the second quarter of 2011) Number of transactions with bank cards, billion units. Receiving cash Non-cash transactions Volume of transactions with bank cards, billion rubles. Receiving cash Non-cash transactions Diagram 1. Diagram 2. Diagram 3. Diagram 4. Diagram 5. Appendix 2.
CENTRAL BANK OF THE RUSSIAN FEDERATION December 2004 N 266-P REGULATIONS ON THE ISSUANCE OF BANK CARDS AND ON OPERATIONS PERFORMED USING PAYMENT CARDS Chapter 1. General provisions 1 This Regulation applies to credit organizations, with the exception of non-bank credit organizations carrying out deposit and credit operations. 2 The requirements of these Regulations do not apply to cards issued by issuers that are not credit institutions, intended for individuals, legal entities and individual entrepreneurs to receive prepaid goods (works, services, results of intellectual activity). 3 The following terms are used in these Regulations: ATM - an electronic software and hardware complex designed to perform, without the participation of an authorized employee of a credit institution, operations of issuing (receiving) cash, including using payment cards, and transmitting orders to a credit institution to transfer funds from a bank account (deposit account) client, as well as for drawing up documents confirming the relevant transactions; personalization - the procedure for applying information provided for by the rules of payment participants to a payment card and (or) recording in the microprocessor memory, on the magnetic strip of a payment card; register of payments for transactions using payment cards (hereinafter referred to as the register of payments) - a document or set of documents containing information about transactions performed using payment cards for a certain period of time, compiled by a legal entity or its structural unit that collects, processes and distributes to participants settlements - to credit institutions information on transactions with payment cards (processing center), and provided in electronic form and (or) on paper; electronic journal - a document or a set of documents in electronic form, generated (generated) by an ATM and (or) electronic terminal for a certain period of time when performing transactions using these devices. 4 On the territory of the Russian Federation, credit institutions - issuers issue bank cards, which are a type of payment cards as a non-cash payment instrument intended for individuals, including authorized legal entities (hereinafter - holders), to carry out transactions with funds held by the issuer, in accordance with the legislation of the Russian Federation and the agreement with the issuer. This Regulation does not establish requirements for the characteristics of a bank card (card with a magnetic stripe, card with a microprocessor, scratch card, card in electronic form, etc.). 5 A credit organization has the right to issue bank cards of the following types: payment (debit) cards, credit cards and prepaid cards. A settlement (debit) card is intended for transactions by its holder within the limits of the amount of funds (spending limit) established by the credit institution - issuer, settlements for which are carried out at the expense of the client’s funds in his bank account, or a loan provided by the credit institution - issuer to the client in accordance with the bank account agreement in the event of insufficient or absent funds in the bank account (overdraft). A credit card is intended for its holder to carry out transactions, settlements for which are carried out at the expense of funds provided by the issuing credit institution to the client within the established limit in accordance with the terms of the loan agreement. A prepaid card is intended for its holder, an individual, to carry out transactions, settlements for which are carried out by the issuing credit institution on its own behalf at the expense of funds provided by the holder, an individual, or funds received by the issuing credit institution in favor of the holder, an individual , if the possibility of using funds received from third parties is provided for in an agreement between the holder - an individual and the credit institution - issuer. A prepaid card certifies the right of its holder - an individual - to claim against the credit institution - issuer for payment for goods (work, services, results of intellectual activity) or for the issuance of cash. The issuing credit institution is obliged to determine the maximum amount within which it assumes obligations on one prepaid card (hereinafter referred to as the prepaid card limit). The prepaid card limit established by the issuing credit institution must not exceed 100,000 rubles or an amount in foreign currency equivalent to 100,000 rubles at the official exchange rate of the Bank of Russia in effect on the date of issue of the prepaid card. Additional provision (transfer) of funds to the credit organization - issuer to increase the amount of obligations of the credit organization - issuer on a prepaid card can be carried out within the limit of the prepaid card (if the possibility of additional provision (transfer) of funds to the credit organization - issuer to increase the amount of obligations of the credit organization - issuer on a prepaid card is provided for by an agreement between the holder - an individual and the credit institution - issuer). The total amount of additional provision (transfer) of funds to the credit organization - issuer to increase the amount of obligations of the credit organization - issuer on a prepaid card, the identification of the holder - an individual of which was not carried out, should not exceed 40,000 rubles during a calendar month. 6. A credit organization (except for a settlement non-bank credit organization) issues settlement (debit) cards and credit cards for individuals, legal entities and individual entrepreneurs, and prepaid cards for individuals. A settlement non-bank credit organization issues payment (debit) cards for legal entities and individual entrepreneurs, and prepaid cards for individuals. The issue of bank cards for individuals, individual entrepreneurs, and legal entities is carried out by a credit organization on the basis of an agreement providing for transactions using bank cards. The issue of settlement (debit) cards intended for performing transactions related to the credit organization's own economic activities is carried out on the basis of an order of the sole executive body of the credit organization. The issuing credit organization carries out settlements for transactions with payment (debit) cards, credit cards, prepaid cards, taking into account the requirements of the currency legislation of the Russian Federation and these Regulations. 7 A credit organization has the right to engage bank payment agents to distribute payment cards issued by this credit organization, as well as to distribute payment cards issued by other credit organizations and foreign legal entities that are not foreign banks on the territory of the Russian Federation (hereinafter referred to as the distribution of payment cards). When a credit organization - issuer engages bank payment agents for the distribution of prepaid cards, the credit institution is not allowed to incur monetary obligations on prepaid cards to bank payment agents - legal entities, including through prepayment of prepaid cards. 8 Specific conditions for the provision of funds for settlements on transactions made using payment (debit) cards, credit cards, the procedure for returning the provided funds, the procedure for documentary confirmation of the provision and return of funds may be determined in the agreement with the client. The provision of funds by a credit institution to clients for settlements on transactions performed using payment (debit) cards is carried out by crediting the specified funds to their bank accounts. The provision of funds by a credit organization to clients for settlements on transactions made using credit cards is carried out by crediting the specified funds to their bank accounts, as well as without using the client’s bank account, if this is provided for in the loan agreement when providing funds in the currency of the Russian Federation to individuals persons, and in foreign currency - to non-resident individuals. Documentary evidence of the provision of a loan without using the client’s bank account is the payment register received by the credit institution, unless otherwise provided by the loan agreement. Repayment (return) of a loan provided for settlements on transactions made using payment (debit) cards, credit cards is carried out in a manner similar to the procedure established by paragraph 3.1 of Bank of Russia Regulations dated August 31, 1998 N 54-P “On the procedure for providing (placement) by credit institutions of funds and their return (repayment)", registered by the Ministry of Justice of the Russian Federation on September 29, 1998 N 1619, on September 11, 2001 N 2934 ("Bulletin of the Bank of Russia" dated October 8, 1998 N 70-71, dated September 19, 2001 N 57-58) (hereinafter referred to as Bank of Russia Regulation N 54-P). Individuals can repay loans in cash using ATMs. 9 On the territory of the Russian Federation, credit organizations (hereinafter referred to as credit organizations - acquirers) carry out settlements with trade (service) organizations for transactions performed using payment cards, and (or) issue cash to payment card holders who are not clients of these credit organizations (hereinafter referred to as acquiring)<*>. 10 A credit organization has the right to simultaneously issue bank cards, acquire payment cards, and distribute payment cards. The issuance of bank cards, acquiring of payment cards, as well as the distribution of payment cards is carried out by credit institutions on the basis of internal bank rules developed by the credit institution in accordance with the legislation of the Russian Federation, including these Regulations, other regulations of the Bank of Russia, and the rules of settlement participants containing them rights, obligations and procedure for settlements between them. 11 Internal bank rules are approved by the management body of the credit organization, authorized to do so by its charter, and must be mandatory for all employees of the credit organization. Internal bank rules, depending on the specifics of the credit institution’s activities, must contain: the procedure for the activities of a credit organization related to the issuance of bank cards; the procedure for the activities of a credit organization related to the acquiring of payment cards; the procedure for the activities of a credit organization related to the distribution of payment cards; the procedure for the activities of a credit institution when making settlements for transactions performed using payment cards; a risk management system when carrying out transactions using payment cards, including the procedure for assessing credit risk, as well as preventing risks when using codes and passwords as an analogue of a handwritten signature (hereinafter referred to as HSA), including when processing and recording the results of verification of such codes and passwords ; the procedure for the credit institution to act in the event of the holder’s loss of payment cards; description of document flow and technology for processing accounting information on transactions performed using payment cards; the procedure for storing payment cards before the personalization procedure (hereinafter referred to as non-personalized payment cards) purchased by a credit institution and containing details (name of the issuer, etc.), payment cards after the personalization procedure, as well as an approved list of officials responsible for their storage; the procedure for moving non-personalized payment cards within a credit institution and transferring them for personalization; the procedure for providing funds to the client in the currency of the Russian Federation and in foreign currency for settlements on transactions performed using payment (debit) cards, credit cards, and the procedure for returning these funds, as well as the procedure for calculating interest on the amounts of funds provided and the procedure for payment their client in accordance with the legislation of the Russian Federation, including regulations of the Bank of Russia and these Regulations; 12 The client makes transactions using settlement (debit) cards, credit cards on a bank account (hereinafter - the account of an individual, individual entrepreneur, legal entity, respectively) opened on the basis of a bank account agreement providing for transactions using settlement (debit) cards, credit cards, concluded in accordance with the requirements of the legislation of the Russian Federation (hereinafter referred to as the bank account agreement). The provisions of this paragraph do not apply to transactions made using credit cards when providing funds to a client without using a bank account in accordance with paragraph 1.8 of these Regulations. 13. A bank account agreement (bank deposit agreement) for performing transactions using a prepaid card is not concluded. Funds received by a credit institution from a legal entity or individual entrepreneur upon a return of payment (for returned goods, refusal of work, services, results of intellectual activity) made using a prepaid card increase the amount of the credit institution's liability for the same prepaid card, with using which the specified payment was made, within its limit, unless the agreement between the holder - an individual and the credit institution - issuer provides for a different procedure for paying the refunded payment. 14. When issuing a payment card or performing transactions using a payment card, a credit institution is obliged to identify its holder in accordance with Article 7 of Federal Law No. 115-FZ of August 7, 2001 “On Combating Legalization (Laundering) of Proceeds from Crime and Financing terrorism" (Collected Legislation of the Russian Federation, 2001, No. 33, Art. 3418; 2002, No. 30, Art. 3029; No. 44, Art. 4296; 2004, No. 31, Art. 3224; 2005, No. 47, Art. 4828 ; 2006, N 31, Art. 3446, Art. 3452; 2007, N 16, Art. 1831; N 31, Art. 3993, Art. 4011; N 49, Art. 6036; 2009, N 23, Art. 2776; N 29, Art. 3600; 2010, N 28, Art. 3553; N 30, Art. 4007; N 31, Art. 4166; 2011, N 27, Art. 3873). 15. Specific conditions for the calculation and payment of interest (interest rate, payment terms and other conditions) on the loan provided for settlements on transactions made using payment (debit) cards, credit cards, and on the client’s cash balances held in his bank account account may be determined in the agreement with the client. Interest accrual on the loan provided for settlements on transactions made using payment (debit) cards, credit cards, and on cash balances in the client’s bank account is carried out in a manner similar to the procedure established by the Regulations of the Bank of Russia dated June 26, 1998 N 39-P "On the procedure for calculating interest on transactions related to the attraction and placement of funds by banks", registered by the Ministry of Justice of the Russian Federation on July 23, 1998 N 1565, on January 26, 1999 N 1688, on December 11, 2007 N 10675 ("Bulletin Bank of Russia" dated August 6, 1998 N 53-54, dated August 28, 1998 N 61, dated February 4, 1999 N 7, dated December 17, 2007 N 69). Payment by clients of interest on the loan provided for settlements on transactions performed using payment (debit) cards, credit cards is carried out in a manner similar to the procedure established by clause 3.1 of Bank of Russia Regulation No. 54-P. Individuals can pay interest on a loan in cash using ATMs. Payment by a credit institution of interest accrued on the balances of funds in the client's bank account is carried out on the basis of settlement documents in a non-cash manner by crediting funds to the client's bank account. Plastic card is a general term that denotes all types of cards that differ in purpose, in the range of services provided with their help, in technical capabilities and in the organizations that issue them. The most important feature of all plastic cards is that they store information used in various application programs of automated banking systems. The first bank cards appeared in America. These were credit cards, but they were not bank cards and only confirmed the creditworthiness of the owner outside his bank. They were made from cardboard. In 1914, some stores and restaurants began issuing such cards to wealthy customers for use as a document when completing a transaction. Thus, the stores sought to “bind” the client to themselves, which was later called a customer loyalty program. In the 1920s, cards moved from "clean" stores and restaurants to "dirty" gas stations (hence the name "gasoline cards"). It was necessary to change the material, and in 1928 the Boston company Farrington Manufacturing produced the first metal cards. Identification data was extruded (embossed) onto them, which made it possible to automate the card acceptance procedure to some extent. When making a purchase, the seller used a special press (imprinter) to make an imprint of this data on the sales receipt - receipt (slip). This technology for accepting cards, despite impressive modern technical achievements in this area, has survived to this day. Bank credit cards were started by John S. Biggins, one of the consumer loan specialists at Flatbush National Bank in Brooklyn. In 1946, he launched the Charge-it credit scheme, which involved receipts that local stores accepted from customers for small purchases. After making a purchase, the store handed over these receipts to the bank, which paid them from the customers' accounts. The first mass payment card system was the Diners Club company created in 1949. Its main difference from previous systems was that between clients and commercial companies there was an intermediary who took care of the settlements. This is what allowed Diners Club to become the first and very widespread universal card. The idea to create such a map was born in the center of Manhattan, namely at the Major’s Cabin Grill restaurant. There they met Alfred Bloomingdale, the grandson of the founder of one of the largest American department stores, his longtime friend Francis McNamara, who at that time headed the financial company Hamilton Credit Corp., and Francis' lawyer, Ralph Snyder. During lunch, the conversation turned to one of McNamara's clients in the Bronx. This entrepreneur allowed his neighbors to use his bank account for interest. Store clerks called him on the phone and, having received permission, wrote down the cost of purchases to his account. In such a transaction, the innovation was the presence of an intermediary who, using his creditworthiness, provided a loan to people who could not get it in any other way. They really liked this financial scheme. They saw a flaw only in lending to people who did not have a credit line in the store. After all, most often it is with them that problems arise. Therefore, the restaurant seemed to them the most successful place to develop a new business. The co-founders decided to use embossed plates as customer identification, which by that time were already quite common and used in many stores and gasoline companies. 10–12 nearby restaurants in the city were involved in the program. In the first month, the turnover amounted to 2 thousand dollars, but after four months - 250 thousand. Within a year, 285 trade and service organizations served 35 thousand company cardholders. Diners Club regularly charged its customers a $3 annual fee for the card. By the end of 1951, the company brought owners a profit of $61,222 from a turnover of 6.2 million cards. Further, along with the development of the United States market, card transactions began to be introduced everywhere. In 1951, Diners Club gave the first license to use its schemes and its name in the UK. And after this, such well-known payment systems as Visa, MasterCard and American Express appeared. The first credit cards entered our country with foreign tourists and businessmen in the late 60s. Work with them was entrusted to a special department of the USSR State Committee for Tourism. Like almost any operation related to currency, work with cards was strictly regulated and was under the watchful eye of the state. Cards were not issued within the country - all work with them was limited to organizing payments with cards of international systems, which were accepted in some currency stores and hotels. It should be noted that the cards of most payment systems, including international ones, at that time had a magnetic stripe. The introduction of cards with a microchip, that is, chip cards, by international payment systems was uncertain, because the development of a unified EMV standard was also required. The same applied to the situation in Russia. In the mid-90s, several development companies simultaneously proposed solutions for organizing payment systems based on chip cards. Russian banks began implementing such local payment systems, and even issued tens of thousands of cards, but due to the lack of a uniform standard of service, such cards were accepted for payment only in these same payment systems. The most successful payment systems using chip cards include Sbercard (a Sberbank project) and Zolotaya Korona. Only these two systems were able to develop to an all-Russian size. Unfortunately, the situation in Russian politics and economics made its own adjustments, and the 1998 crisis caused the loss of the leading positions first by STB Card, and then by Union Card. However, there is serious competition in the card market between international and Russian payment systems. Let us pay attention to some historical aspects of the development of the card business of Russian banks. Initially, Russian banks set fairly strict conditions for issuing cards from international payment systems, and they also chose clients carefully. In the mid-90s, tariffs for issuing and servicing plastic cards of international systems of any bank necessarily contained a clause on the presence of a “security deposit” or “guarantee coverage” - an amount inaccessible to the client, which was, however, in his separate account. They used this deposit as a guarantee against an overdraft on a special card account, although in fact these funds constituted account balances that the bank freely used. The amounts of the security deposit were decent, and the interest accrued on it was minimal. At the same time, the commission for withdrawing funds was quite high - 2-3% in the ATM network of your bank and even higher when withdrawing from ATMs of other banks. In addition, a fairly large annual maintenance fee was charged. By 2005, the situation in the card industry had changed significantly. More than a ten-year period of development of this area of business in Russian banks has led to a reduction in tariffs. For example, Electron class cards began to be issued free of charge as part of salary projects and others. There was also a significant expansion of the product range, for example, full-fledged credit cards appeared and became very popular - the dream of any potential borrower. In addition, the scope of application of payment cards has become wider, as banks have begun to implement card issuance programs jointly with non-banking companies. Cards were issued for chains of retail stores, airlines, restaurants, etc. And finally, the card business itself in Russian banks has reached a certain level, becoming efficient, unified and friendly not only towards clients - card holders, but also towards “customers on the street”. The result of the rapid development of consumer lending, observed in 2000–2004, was the appearance in many large stores of small banking offices that could issue a credit card to a store buyer within 15–20 minutes. Today, independent commercial banks in Russia, having complete freedom of action in relation to plastic cards, offer their clients both international and Russian cards. Many banks prefer to diversify their activities and combine the issuance of international cards with membership in Russian payment systems. Cards of international payment systems still have an undeniable advantage over Russian ones, since they are accepted all over the world. There is no doubt that in Russia such cards have stable consumers among organizations and citizens who often travel abroad.
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