Omar Khalid
Plastic cards are a type of payment card made from plastic that are often used for financial transactions. They are usually equipped with an electronic chip and come in a variety of colours and finishes. Plastic cards are used for identity verification and authentication, and are linked to a bank account to allow users to make purchases, withdraw money, and pay bills. Examples of plastic cards include debit cards, credit cards, prepaid cards, and Forex cards. These cards offer convenience, security, and rewards or benefits such as cashback, discounts, and exclusive deals.
| Characteristics | Values |
|---|---|
| Purpose | Identity documents, authentication, authorization, financial transactions |
| Types | Debit cards, credit cards, prepaid cards, forex cards |
| Benefits | Global acceptance, emergency access to funds, rewards and benefits, instant blocking in case of loss/theft, high daily transaction limits, purchase protection, access to funds in a bank account, monthly account statements, exclusive discounts and privileges, high withdrawal limits, protection from currency rate fluctuations |
| Features | Magnetic stripe, near-field communication, RFID, PIN numbers, photographs, security holograms, guillochés, electronic chip |
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What You'll Learn
Plastic cards as identity documents
Plastic cards are commonly used as identity documents, providing authentication and verification of an individual's identity. These cards, often referred to as ID cards, typically contain essential personal information, such as the bearer's full name, birth date, address, identification number, card number, gender, and citizenship.
The use of plastic cards as identity documents offers several advantages. Firstly, they are durable and flexible, making them convenient for individuals to carry and store. Secondly, plastic cards can incorporate advanced security features that deter counterfeiting and tampering. These security features may include holograms, UV printing, luster ribbons, and electronic chips.
In many countries, plastic cards are used as compulsory identity documents. For example, citizens of South Korea aged 17 and above are issued a plastic ID card called Jumindeungrokjeung, which includes their photo and a 15-digit ID number. Similarly, Malaysia has introduced the MyKad, a compulsory identity document for citizens aged 12 and above, which combines photo identification with fingerprint biometric data on an embedded computer chip.
The versatility of plastic cards as identity documents is also evident in their application for various purposes. For instance, the South African government is considering using smart cards not only for identification but also for licences, National Health Insurance, and social grants. Additionally, plastic cards can serve as driver's licenses, health insurance cards, and more.
The evolution of plastic cards as identity documents showcases the ongoing efforts to enhance security, convenience, and functionality. With the integration of electronic chips and advanced security features, plastic cards play a crucial role in authenticating individuals' identities and facilitating various aspects of daily life, including financial transactions and access to services.
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Types of plastic cards: debit, credit, prepaid, forex
Plastic cards are payment methods executed through cards made of plastic with metal components. They allow users to make transactions quickly and securely. The term 'plastic money' refers to credit cards, debit cards, prepaid cards, and forex cards.
Debit Cards
Debit cards are linked to the cardholder's bank account and can be used for everyday transactions and ATM withdrawals. They are a safe and convenient way to make transactions, with some offering the added benefit of no processing fees.
Credit Cards
Credit cards allow users to borrow money from the card-issuing bank up to a pre-defined limit. The user must repay the borrowed amount within a specified period. Credit cards offer benefits such as reward points, complimentary experiences, and travel privileges.
Prepaid Cards
Prepaid cards are loaded with a specific amount of money, allowing users to set a budget and spend only up to that limit. They can be reloaded with funds online, providing control and flexibility in managing money. Prepaid cards are a convenient option for individuals and businesses, offering security and cashback rewards.
Forex Cards
Forex cards are a type of prepaid card used for international travel. They are loaded with foreign currencies, eliminating the need for exchanging cash in different countries. Forex cards are universally accepted, safe, and cost-effective, offering protection against fluctuating exchange rates and lower transaction fees.
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Plastic cards' global acceptance
Plastic cards are used globally for a variety of applications, including membership, access control, and financial services. They are commonly used for authentication and identification purposes, providing individuals with authorised access to secure premises and enabling them to conduct financial transactions securely.
The plastic cards market is expected to witness significant growth, with a projected CAGR of 8.2% from 2021 to 2028. This growth is driven by several factors, including the increasing global population, the rise in cashless payment options, and the high adoption of modern banking and commercial transactions worldwide.
The acceptance of plastic cards as a form of payment is becoming more widespread, particularly in the context of post-COVID-19 cashless societies. For example, in Mauritius, there has been an overwhelming increase in the usage of plastic money among citizens and firms, driven by factors such as the rapid internationalisation of businesses, the growth of e-commerce, and the perceived hygienic benefits of contactless payments.
The International Card Manufacturers Association's (ICMA) January 2020 report indicated a production increase to a record high of 37.1 billion cards and $27 billion in revenue in 2019. The report also forecasted market growth at a rate of 8.2% from 2021 to 2028, although it is important to note that this forecast did not account for potential losses due to the COVID-19 pandemic.
The plastic cards market is analysed by country, with coverage including North America, Europe, Asia-Pacific, and the Middle East and Africa. Asia-Pacific is expected to witness high growth during the forecast period due to the economic growth in the region.
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Emergency fund access
Plastic cards, such as credit or debit cards, are commonly used for financial transactions and banking. However, relying on credit cards for emergency funds is not advisable due to the associated risks of accumulating high-interest debt.
It is essential to distinguish between credit cards and emergency funds. Credit cards should not be the primary source of emergency funding due to the potential for high-interest debt and negative impacts on credit scores. Instead, focus on building a dedicated emergency savings fund that is easily accessible when needed.
- Dedicated Savings Account: Set up a separate, high-yield savings account specifically for emergency funds. This ensures your money is easily accessible when needed and accumulates interest over time.
- Regular Contributions: Make regular, monthly deposits into your emergency savings account. Even small contributions can add up over time and provide a financial cushion for unexpected expenses.
- Alternative Funding Options: Consider alternative funding sources, such as personal loans or specialised credit card offerings like My Chase Loan, which may provide cheaper access to credit.
- Accessibility and Temptation: If you're concerned about the temptation of an easily accessible account, explore options like hiding the savings from your online view or opening an account with a different bank.
- Emergency Fund Amount: Aim to save enough to cover three to six months' worth of expenses. This provides a financial buffer for unforeseen circumstances, such as income loss, medical bills, or home repairs.
- Avoid Credit Card Dependence: While credit cards can be used as a last resort, avoid making them your default payment method for emergencies. The convenience of plastic cards can lead to a cycle of debt and hinder your ability to build a robust emergency fund.
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Plastic cards' security features
Plastic cards are used for a variety of purposes, including identification, authentication, and authorization. They are commonly used as debit or credit cards, driver's licenses, health insurance cards, and more. With the increasing sophistication of fraudsters, it is important to have security features in place to prevent counterfeiting and protect sensitive information. Here are some security features that can be found on plastic cards:
- Holograms: Holograms are one of the most common security features on plastic cards. They are difficult to replicate and can be used to verify the authenticity of the card. Holograms are often combined with overlay varnishes or laminates to enhance their durability and security.
- Magnetic Stripes: Magnetic stripes allow for the storage of personal data and can be used for secure transactions. They are commonly used in contact cards, where they must be inserted into a suitable reading device to access the information.
- RFID Chips: Radio-frequency identification (RFID) chips enable contactless communication, allowing cardholders to make transactions or access information without physically inserting the card. These chips offer enhanced security and convenience.
- Encryption: Smart cards utilize encryption to convert data into a coded format, making it extremely difficult for unauthorized individuals to access the information. Strong encryption methods ensure that only authorized users with the correct decryption key can decipher the data.
- Unique Serial Numbers: Each smart card is assigned a unique serial number, making it easier to track and identify cards in the event of loss or theft.
- Guilloché Patterns: The guilloche pattern consists of interwoven and overlapping lines that form cord-like, often asymmetrical ellipses. This intricate pattern is challenging to reproduce, making it a useful security feature against counterfeiting.
- Microprinting: Micro-typefaces or microprinting is a security feature where tiny text is printed on the card and can only be read with the help of a magnifying glass. This makes it difficult for counterfeiters to reproduce.
- UV-Color: UV-color printing is another effective security feature. The imprint made with UV-color ink is invisible under normal light but becomes visible only under special black light lamps, making it harder for fraudsters to replicate.
- Iriodin Colors: Iriodin colors are tilt-effect colors that change depending on the viewing angle. This makes it more challenging for counterfeiters to accurately reproduce the colors, enhancing the security of the card.
- Barcode: Barcodes are used on some plastic cards to store information securely and enable quick scanning and data retrieval.
These security features are constantly evolving as technology advances, with new techniques such as blockchain and quantum encryption being explored to further enhance the security of plastic cards.
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Frequently asked questions
A plastic card, also known as a debit card, is a payment card that allows you to access your bank account electronically. This means you don't have to carry cash with you, offering convenience and security.
Plastic cards offer a range of benefits, including the ability to shop, pay bills, and withdraw cash from ATMs. They also often come with rewards and discounts, as well as exclusive privileges tailored to your lifestyle and spending habits.
Plastic cards are usually equipped with an electronic chip (storage or RFID), which allows them to serve as high-security active electronic documents. They may also feature security measures such as a hard-to-imitate integrated photograph, security holograms, or a magnetic stripe for storing personal data.
There are several types of plastic cards, including debit cards, credit cards, prepaid cards, and Forex cards for international travellers. Each type of card has unique features and benefits, such as the ability to set spending limits or make purchases in foreign currencies.
