Plastic money syndrome
Angel is heading out to university in the latest fashion, but without a taka in his pockets. Today, he will hang around campus all day with friends and go shopping. He'll worry about the bills later, because today he is carrying only plastic money the same kind of money that made US consumers spend well beyond their means. 'Plastic money' mainly represents debit and credit cards that allow cash to be drawn from an ATM booth or shopping to be done on credit. Both these modes eliminate the need to have actual cash at hand during purchase. The urban crowd, especially the young generation, considers the use of plastic money both smart and trendy. "When I go to a restaurant or shopping mall, I usually pay for these transactions through plastic money, because if I pay by cash, others will think of me as un-smart," says Ashiqur Rahman, a fresh graduate from Dhaka University. Bank employees, corporate executives, officials of multinational companies and businessmen are the main users of credit/debit cards. "If I don't have sufficient money, I can easily do my shopping through cards or I can instantly draw the cash from the nearest booth and make my payments," says Mostafizur Rahman, officer for the business development division of a multinational company. "I often go to branded shops or other shopping malls to shop. Sometimes it might be a sudden visit, but I can still buy my preferred items through my cards,' said Shaheen Kamal, user of the 'smart' card. "In situations where instant money is needed, it can be collected from the nearest ATM booth", he added "The main reason for the popularity of plastic money in Bangladesh is the lack of security. It is risky to carry large amounts of cash all the time. So usage of plastic money makes people feel relaxed and less at risk", said most users of the plastic money. "The use of plastic money is growing at a rate of around 10 percent as more and more banks come to the market with new products", says an industry insider. "We are providing unique features for the credit card holders, like global transaction facility, no requirement of security deposit, attractive gifts, and credit card cheques. So, an increasing number of customers are getting interested in using credit cards," says Shahadat Hossain Shohag, head of card division for the United Commercial Bank. The credit card was first introduced in Bangladesh in the year 1997-98 by Standard Chartered Bank (SCB). Currently there are about five lakh credit card users, of which SCB has the highest number. SCB has around 300,000 credit cards currently in the market and the number continues to grow as 3000 more cards, on average, are added to the list every month, according to an official. However, customers also blame the banks for not protecting their interests. They say that many shop owners charge extra on the use of credit cards, which is against the law. Jewellery and electronic shops are mainly to blame for such malpractice. The number of card users and the use of Automated Teller Machine (ATM) and debit cards have increased remarkably in recent years, bank officials said. A majority of the transactions take place in the capital city. Statistics indicate that credit and debit cards are slowly overtaking cash as a popular method of payment and receiving short-term loans. "Payment through credit card is increasing in departmental stores in Dhaka city as shoppers in especially posh areas prefer to shop through credit card to cash,' say sales persons of different chain stores. However, not everyone seems to fancy using the plastic money. Sometimes, glitches in software and networking of the ATM booths cause a tremendous hassle for the ATM card users. "I went to an ATM booth to draw money for an emergency need. But to my disappointment, when I inserted my card into the ATM machine, it did not work," said Samir Saha, marketing manager for a fabric company. "Banks charge a hidden amount with debit and credit cards. It ultimately discourages the usage of cards," said Dipanker Roy, a student of a private university. Another general criticism against credit cards is that an item bought on credit will cost more than the same item purchased by cash, as the customers will have to pay a certain amount of interest to the bank. However, bank officials say that their clients are usually informed about the charges associated with their accounts and cards.
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