MUMBAI, Oct 6: For a privileged few, the plastic revolution is definitely on in the country. For them, carrying cash is an inconvenient and unsophisticated way of life and status is partly a hostage of the number of cards in their wallet. So, you have credit cards, pre-paid cards for cellular phones and automatic vending machines, pay-phone cards, petrol cards, smart cards, corporate cards and the very latest of them all, the debit cards.

Maestro, the brand-name of MasterCard's global on-line debit card programme, is being introduced for the first time in India by Citibank. Set to hit the market by the middle of October, ``the bank in the pocket enables people to pay for goods and services at a merchant location of their choice with their ATM card, which directly debits from their Citibank account,'' says J Sannon, senior vice-president and general manager, South Asia, MasterCard International.

So, what are the advantages of the debit card? What sets it apart from the other cards? Explains Sannon, ``A credit card enables a customer to pay for goods and services at the end of the monthly cycle and avail of the revolving facility of paying a minimum amount, while the rest can be paid later with a nominal interest charge on the amount.

``A charge cardholder has to pay the due amount by a particular date and, usually, there is no revolving facility for the customer. A Smart Card has money loaded electronically in a chip, embedded in the card. The user is able to pay instantly with a Smart Card, as the due amount is reduced from the chip.''

Simply put, debit cards, or stored value cards as they are sometimes referred to, enable a cardholder to pay for goods and services by directly debiting his bank account at a time and place of his choice, without having to take the risk of carrying large amounts of cash. Launched worldwide nearly five years ago, debit cards have grown in popularity as they have emerged as a new way to access deposit accounts.

To use debit cards, consumers simply look for the Maestro logo at store entrances, ATMs or payment locations. After the card is `swiped' through a magnetic reader, consumers enter a personal identification number (PIN). Once the purchase is authorised, the consumer's financial institution immediately deducts the purchase amount from his deposit account. The transaction appears on the cardholder's next bank statement. The transaction approval process averages 4-10 seconds.

Sannon is optimistic about the prospects of debit cards in India and says, ``This is a brand new business in India and the challenge lies in determining how many people will use Maestro. We believe that by the turn of the century, 100 million customers will be able to use Maestro at 20,000 merchant locations across the country.''

Besides doing away with the need to carry cash, Maestro enables customers to access their bank accounts directly. Citibank's point-of-sale terminals will also shortly accept Maestro cards carried by foreign visitors to India, thereby further contributing to the foreign exchange earnings for India, avers Sannon.

The debit card is also a low risk instrument for banks, since the credit-worthiness of individuals need not be checked before issuing the card. But, at present, the reach of the card will be limited as MasterCard has tied up with Citibank, which has only 40,000 account holders. Sannon counters, ``We have plans to launch Maestro with other MasterCard member banks in India soon. We selected Citibank as it has been constantly at the forefront of providing new and convenient payment mechanisms to its customers.

Maestro is targeted at the burgeoning middle class in India to enable them to have access to their bank accounts directly from retail establishments.''

The launch of Maestro would also include upgrading or establishing new point-of-sale terminals in outlets as the payment procedure is based on Electronic Data Capture (EDC) machines which a regular ``swipe'' machine for credit cards does not have. The EDC terminal costs Rs 65,000.

Normally, in India, it is the banks or card providers who spend on the EDCs. Citibank plans to upgrade 250 EDC terminals with its merchants by October end, and plans an increase in EDC numbers to 1,000 by the year end.

Probably the biggest advantage of the new card is that the customer now has the option of having both credit and debit instruments in his pocket and this enhances the concept of convenience banking. It is up to the banks and retail outlets to set up the infrastructure (like EDC machines for the new cards) fast, to procure for customers the advantage of plastic money banking.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.