"Plastic Cards Market Analysis in Pakistan" - A Research Report

Introduction

 The liberalization of the monetary sectors in Asia has resulted in the rapid propagation of credit card companies and financial companies providing other types of consumer credit. “In modern commerce, credit cards (along with debit cards) serve as a payment device in lieu of cash or checks for millions of routine purchases as well as for many transactions that would otherwise be inconvenient, or perhaps impossible”. (1970-2000; Durkin, Thomas A). The credit card market in overall world has expanded drastically that the issuers of foreign countries has introduced mobile phone credit cards for the convenience of their customers.(Amin, 2008) This, coupled with the entry of foreign banks, has greatly increased the number of credit cards available, and hence such spending in Pakistan.

Although credit card was introduced in Pakistan decades ago when Habib Bank, the largest bank in Pakistan, launched its gold card, but people had hardly know about this card because of its very limited issuance. Several years back, Master card was introduced by Allied Bank of Pakistan which also didn’t receive that much appreciation. In 1994, Citibank had introduced its VISA Card and that was the turning point in the history of Plastic Money in Pakistan. Citibank had done a tremendous job to edify people of Pakistan, as well as, financial industry about credit cards and its significance in today's world.

It was their aggressive marketing and heavy investment in technology, that made deserving Citibank to be called the industry leader of Pakistan's credit card business. After the success of Citibank card, Muslim Commercial Bank, Bank of America, and National Bank of Pakistan had launched their credit cards. In the very near future we are expecting more local and international banks to enter and have success on the horizon of Pakistan's credit card business. The plastic money industry in Pakistan is one of the undeveloped ones. At this time, there are a few people which are using them or even are aware of its services. The majority of people does not consider it fruitful and part their ways from it.

It may be pointed out that the misuse of debit/credit cards has opened new chapters of fraud and forgery. In most of the cases, the misuse of cardholders’ personal information has occupied a prominent place. Previously, Point of Sale (POS) terminals used to generate transaction slips visibly indicating the cardholder personal information such as name of the cardholder, 16-digit Card Number, date of expiry, etc., which can easily be used for fraudulent purposes. The State Bank of Pakistan has taken several measures to enhance security of plastic money transactions in the country with a view to effectively address customer complaints and to ensure continued growth in the fields of e-banking and e-commerce. (State Bank of Pakistan, August 23, 2008)

According to status report of Q2 fiscal year 07-08, total 6.7 million plastic payment cards were in circulation which showed 2.5% increase over the previous quarter. Total number of credit cards in transmission has increased from 1.62 million to 1.66 million for the same quarter, registering an increase of 2.5 % over the previous quarter.

The major portion of plastic payment cards is absorbed by debit cards which comprise of 4.8 million users all over Pakistan, as described in second quarter report of fiscal year 2007-08, issued by State Bank of Pakistan. So overall we can say there is growth in this field, but still some particular forces are acting as barriers that impede people to use credit cards and for the better growth of this industry these barriers must be immediately identified and cured.

This research report proceeds with explaining the problem statement, followed by findings of the previous researchers written under literature review and theoretical framework. Afterwards, model and methodology of the analysis will be explained. Methodology section includes sample selection, sampling techniques and analysis techniques employed to back the results of the findings. Further, findings section is established where the results of the research are elaborated. Lastly, some recommendations and implications are presented along with the limitations faced by the panel of researchers.

Data  Analysis

 

Customer Characteristics		Frequency	Percent
Age	Below 25	51	32%
	25-35	59	37%
	35-45	22	14%
	45 and above	27	17%
Gender	Female	64	40.3%
	Male	95	59.7%
Marital Status	Single	74	47%
	Married	85	53%
Occupation	Govt. Employee	45	28%
	Business	28	18%
	Pvt Employee	24	15%
	Student	36	23%
	Others	26	16%
Qualification	Intermediate or less	16	10%
	Bachelors	62	39%
	Masters	78	49%
	Others	3	2%
Income Level	Below 20,000	56	35%
	20,000 – 30,000	32	20%
	30,000 – 40,000	36	23%
	41,000 & above	35	22%

The study examined over 150 banking customers in Pakistan in terms of their demographic background, including gender, age, income and education. Of the 159 respondents, 95 respondents (59.7% percent) were male and 40.3% were females. The largest respondent group (37%) was from the age group of 25-35. Most of them were married (53.5%) while the single respondents were also of equal magnitude (46.5%). Out of 159 respondents, 28.3% were government employees. The mostly responded group belonged to the low income group i.e. Below Rs.20, 000 (35.2 percent). The majority of the respondents held Master’s degree (almost 50%). The people had more tendencies to have the personal account than business and around 89.3 percent had the personal account. As demographic factors are taken as independent variables, their impact can be felt on the dependent variable. Demographics have dual nature; they can be taken as independent or moderate variables. But for this study, we had considered it as independent variable, in order to find their association with previous findings.

Gan, Maysami and Koh (2008) proposed that females tend to use more credit cards, but our research found completely opposite results, as the most of the cardholder respondents were males. Income is a big barrier in adoption of credit cards. Most of the respondents were from a lower income group and they simply don’t have enough resources to have such plastic payment card. Worthngton, Stewart, and Lu (2007) identified the similar or complimentary results which showcased results almost similar to our research.

The above paragraph described demographic characteristics of the sample. Now the tested results of variable categories will be elaborated. In this paper t-test is used in testing the null hypothesis for equality of means of cardholders and non-cardholders. The t- test will indicate whether the means of the subject under study were significantly different, that is, the observed difference between the sample value and the hypothesized value is true and cannot be due to mere chance.

Tables provide the descriptive statistics and the t-test of the both segments i.e. cardholders and non-cardholders. To determine whether the differences in means were significant, the p-value must be less than the 0.05 or 5 percent level. The decision rule is “if the p-value is less than 0.05 the null hypothesis i.e. (no difference among the groups’ means) will be rejected”.

TABLE 1:              AWARENESS

	Card Holders			Non Card-Holders			P - Value
	Mean	S.D.		Mean	S.D.
Level of Information	3.15	0.82		2.30	0.77
Information Sources:
Friends & Family	1.96		0.76	1.76		0.70	0.090
TV Programs	1.83		0.70	1.49		0.55	0.001
Internet	1.85		0.80	1.56		0.75	0.018
Bank Staff	1.99		0.76	1.71		0.77	0.027
Bank Advertisement	1.85		0.67	1.68		0.64	0.096
Brochures	1.76		0.75	1.45		0.61	0.006

The first section of the research sought to identify the awareness level of people of Pakistan about credit cards. For this purpose two questions were asked from the respondents, purpose of which was to identify the level of awareness and source from which both the segments of the research i.e. cardholders and non- cardholders receive information about credit cards. The results showcased in the table 1 purports that majority of the respondents do know about credit cards but not enough detail. More than half percent respondents asserted that they don’t possess complete information about credit cards but they are also not ignorant about this

payment mechanism. In order to create awareness among the general audiences, issuing companies must provide information to people through different mediums.

Now the medium of information is also of utmost importance. Some people receive valuable information about things through advertisement or friends & family or all the way through most advanced method, internet.

The research survey found that for non- cardholders, most helpful source for receiving the information about credit cards is Friends & Family. This purports that; they receive information from their relatives or colleagues that are already using such payment procedures. So, companies that are keen to increase the awareness level of consumers should focus advertisement through various available channels like television programs, brochures company advertisements and bank staff cooperation.

When we talk about cardholders their main source of information is bank staff. They state that the employees of their bank provided information regarding credit cards and persuaded them to adopt it. Now if any new offer is launched or any charges are imposed they are duly informed by their bank managers. As far as level of awareness is concerned, it is quite obvious to observe that almost all of the respondents would have experience of using credit cards.

When we compare the results of cardholders with the results of non- cardholders, it is evident that the main source of information is different for both. On one side cardholders receive extensive information from bank staff, while non-cardholders have a little bit knowledge from the colleagues and Perceived Barriers in the Adoption & Usage of Credit Cards family members. This difference is statistically proved by the use of t-test, where t-value depicts that brochures or leaflet is that information resource which has the statistically different mean for both groups. Other variables are close to each other and mean difference between the two segments may be due to sampling error.

TABLE 2:              PERCEPTION

	Card Holders		Non Card-Holders		P - Value
	Mean	S.D.	Mean	S.D.
Overspending	3.64	1.05	3.30	1.22	0.059
Overspending Fault	3.76	1.01	3.89	1.13	0.438
Interest on Loan	3.36	1.07	3.17	1.48	0.344
Islamic Values	3.43	1.08	3.20	1.51	0.280
Debt	3.32	1.02	3.48	1.16	0.369
Security Risk	3.15	1.09	3.42	1.14	0.130
Adopting new technology	3.56	0.90	1.45	0.61	0.006
Online Payments	3.89	1.09	4.26	0.81	0.016
Payment Outlets	3.64	0.92	3.77	1.11	0.414

Table 2 presents some of the perceptions or perceptual problems of Pakistan people, regarding credit cards.

The results generated by applying SPSS techniques reveal the mean value of 3.30 with standard deviation of 1.220, which implies that a large proportion of audience agree or somewhat agree that credit card usage may lead to overspending. The research survey found that there is a general perception among the people that credit card ownership generally motivates people to spend out of their pockets. When we compare this result with the cardholder one, it is evident that its intensity is quite strong there with the mean value of 3.64 and relatively less variance. In addition, both users and non-users of credit cards agree that this overspending is the fault of consumers and not the issuer’s. So it is consumer’s responsibility to manage and control its spending and it does not create as such barrier in adopting or impeding the use of credit cards. However, statistical tool t-test reveals contrary results. The p-value for the data is greater than the significance level 0.05 which means null hypothesis (no difference among the means) is accepted. Any difference occurring may be due to chance.

Our results comply with the findings of previous researchers like (Worthington, Stewart, & Lu, 2007) where they identified the general perception of the people of China which was same as of Pakistani’s. They concluded

the revolving credit card users tend to shop more than their budget as they are more aware about the risks and cost of overspending. Previous researches conducted in different Islamic states like Saudi Arabia, Turkey and Uzbekistan have found that people often feel credit cards as against Islamic laws because of the inclusion of interest (which is purely against Islamic values, denoted as Riba). Our research, conducted in Pakistan, has found analogous type of results. The mean calculated for non- users implies that people of Pakistan generally perceive it as against Islamic values. But a serious fact to be noted here is that the variance in the results is on the higher side i.e. 1.511. This explains that people are not sure about it which is mainly due to lack of information. This wrong perception is generated because of less information regarding its working. So, companies must generate awareness among the people and educate them how it is free from interest. On the other hand users of credit cards also feel that it is against Islamic values, so they are trying to avert its usage. The issuers must address this issue as this is turning out to be the bigger barricade in the development of plastic payment system in this country of southern Asia. However p-value results provide differing results. It states that, there is no statistically significant difference between the two means as p-value is greater than the significance level.

A research question was quoted to know the people’s perception of debt creation as a result of using credit cards. The research survey found that non- cardholders perceive that issuer’s of credit cards make it hard for people to pay off their debt by imposing additional interest expenses and charges. This perception acts as a barrier in the adoption of credit cards among the people of Pakistan. But, the other segment that consists of users of credit cards not intensely agrees with it. The results generated show somewhat agreement by the users, so we can conclude that Pakistani users of credit cards don’t think debt burden as a barrier in their less frequent use of credit cards. They mostly use it for installment purpose i.e. to clear off their bills and pay later. So, they themselves dig into debt and know several ways to get out of it. Previous researchers including Devlin, Worthington, and Gerrard (2007) found that credit cardholders are of two types, first one is convenience users and second type is installment users. Whereas Worthington, Stewart, and Lu (2007) divided the type of users into two groups, that was of transactor and revolver. They have proposed the concept to distinct type of users and this vary concept can also be applied in Pakistan where both type of users exists. To find out is this difference in the means of cardholders and non- cardholders statistically significant, t-test was executed. The results found that there is no significant change between the two means and any difference occurring is due to sampling error.

Security of the payment mechanism is one of the key concerns for the people of Pakistan. When, a research question relating to judging the perception of users and non-users about the security of credit card or loss of money in case card is lost or stolen, the responses were obvious. Majority of the people perceive that credit card is most likely to be lost or stolen. The people which are not using it perceives this security issue as a obstruction in their adoption process while its intensity is quite weak in terms of responses generated by the current users of credit cards. They claimed that there is no issue of losing money in case credit card is lost or stolen, so they are not avoiding using it just because of the security issue, there must be some other reasons. Security doesn’t affect the users may be because they are more aware about its features and understands the importance of pin code without which nobody can utilize the card even if the owner forgets the pin code, he may not able to use also. However statistical significance analysis revealed that there is no considerable difference among the means and any disparity occurring is due to chance or sampling error. Worthington, Stewart, & Lu, (2007) addressed same security issue in relativly different population setting of China found contrary results where respondents highlighted certain security issues which are to be resolved in an attempt to increase adoption of plastic payment mechanism.

People of Pakistan are considered to be backward and those kind of inhabitants who do not want to acclimatize to changes. So we considered this issue to find out whether this change resistant nature leads people for not adopting or using the newly developed state of the art payment contrivance i.e. credit cards. A research question was quoted to know whether the people of Pakistan are change defiant or not. The survey found surprising results which declares that people are open to any kind of change or happy to adopt newly developed products which may endow with benefits. This has resulted in infringement of erroneous perception about Pakistani people. Although this mean value is generated through a sample profile but because of the vary nature of research this can be generalized to whole population. The mean value of 3.64 for non-users has clear meaning that people welcome new technological products if they are provided with certain beneficial features for the users. The intensity of agreement is almost same for cardholder as for non-cardholders, which can be interpreted as advancement in the credit card features is not the cause of their impeded use of it. Conversely t-test results provide different results. It states that there is no significant difference between the means of cardholders and non-cardholders and any discrepancy occurring is due to chance or sampling error.

TABLE 3:              COST

	Card Holders		Non Card-Holders		P - Value
	Mean	S.D.	Mean	S.D.
Interest Rates	3.13	0.98	3.10	1.17	0.825
Credit Card Limits	3.48	0.83	3.18	0.88	0.028
Information about Charges	2.79	1.31	3.06	1.10	0.155
Repayment Period	3.41	0.95	3.26	1.04	0.341
Clearing Full Balance	2.97	1.31
Security Features	3.15	0.94
Application Approval Time	-	-	3.13	1.17

Up till now, we were addressing some perception errors by the general public with respect to using or not using credit cards. But there are certain monetary and non-monetary costs are also present which are to be borne by the person in using or adopting a new thing. If these costs match the benefits it provides than people move toward it otherwise rejects it. As mentioned in Table3, the first of the monetary costs is interest rates. When the respondents were asked to tell whether the interest rates charged on credit cards comply with the benefits it provides the responses were ambiguous. The respondents, who haven’t applied for credit cards were indifferent in replying to it as they had no information regarding interest rates being charged today. But the respondents who had applied for it but didn’t proceed disagreed with the statement. They claimed current interest rates are very high and benefits that can be accrued from the use of it are not equivalent. So, this acts as a barrier in their adoption of credit cards. On the other side, cardholders, either revolvers or convenient users’ responses resulted in almost equal mean but relatively less variance. It means the current users are also limiting their use because of inequality among the interest rate charged and benefits received. Similar results found when t-test was used to identify the mean difference. It resulted in same less significant divergence among the two means which is ignorable. There are numerous studies identifying the impact of interest rates on the adoption and using of either credit or debit cards. Some valuable researches were conducted by (Gan, Maysami, & Koh, 2008), Brito & Hartley (1995), Chirapanda and Yoopetch (2008) and Lunt (1992) identified same results but in different settings. They found that increasing rate of interest affects the adoption of credit cards negatively in countries like China, Thailand, Greece and Egypt which comply with our results generated

through a research conducted in Pakistan.

In order to find whether the people are satisfied with the current credit limits offered by issuers, a research question was quoted to find its significance among the population. The survey found that cardholders are generally satisfied with the current prevailing limits, but non-cardholders perceive it as a barrier as they consider it low. This difference in the mean values is statistically proven fact as p-value of data is below than the prescribed level of 0.05 which ultimately shows that the means of the two groups is significantly different. So we can conclude that this credit limit enhancement can act as a motivator for the non-users and it has no or less significance for cardholders. Similar results were found by various researchers like Chirapanda and Yoopetch (2008), Chan (1997) and Gan, Maysami, and Koh (2008).

It is perceived that banks or financial institutions do not provide complete information about the charges or fees being charged on credit cards. A research question was quoted to know its effect in Pakistan. The research findings concluded that mean value is low in responses generated by the cardholders as compared to those which are non-cardholders. The mean value of 2.79 for users clearly explains that complete information is not provided regarding charges as they had suffered from certain hidden charges once they had adopted it. When we compare it with the results of non-cardholder ones, the change is not noteworthy but degree of agreement is relatively high. The reason behind this maybe they don’t have experience and enough awareness. When the means of the two compared to know whether there is any significant difference, this resulted in a simple answer “No”. The proposed difference may be due to sampling error or some other reason. So, we can conclude that insufficient information provided by issuers is creating equal amount of barricade for cardholders as well as for non-cardholders.

The acceptability is one of the key issues in determining the increased rate of adoption and usage of credit cards. It may act as a barrier depending on the geographical location of the concerned person. If we talk from the point of view of Pakistan, people living in Karachi, Lahore or Islamabad may have greater opportunities for using credit cards as they have more outlets. But people of smaller cities like Bahawalpur, Hyderabad etc have less of those. Our research finds that non users generally agrees that there are less outlets accepting credit cards both domestically and internationally and this low acceptability results in perceived barrier in their adoption of credit cards. The other segment of respondents that consists of cardholders sees the outlets as satisfactory. This change may be due to change in geographical surroundings, as data is collected on convenience basis and a larger proportion of cardholders is from the bigger cities of Pakistan, that have more opportunities for using it especially at petrol pumps and retail stores.

For further authentication of the results, t-test for two sample means was run which resulted in the rejection of null hypothesis. This means the differences between the mean value of two data sets is significantly different. Our study comply with the results found by previous researchers like Chirapanda and Yoopetch (2008), Chan (1997), Yiing Jia Loke (2007), Chirapanda and Yoopetch (2008) which also concluded that lack of acceptability abroad may result in less usage and adoption rate. In order to find whether shorten repayment period acts as an obstruction in adoption and usage of credit cards, the results depicted that both users and non-users perceive it as barrier. But the percentage of barricade is stronger in existing cardholders. Chan also simplified this sort of result and explains it as the more the interest free repayment period, the more the rate of adoption and usage of credit cards in countries like Hong Kong and China. As the table suggests, there is no such difference found in the means of the two segments as p-value is greater than the alpha. Normally application approval time is 6 to 8 weeks for allowing the applicant to properly use credit card. Although this period is not very much high but a passable proportion of respondents considers it as long enough that eventually stops them from obtaining the credit cards. This result is supported by findings of previous researchers that include Chan (1997) and Brito & Hartley (2001).

As the focus of the research is also on the current users and finding the problems they are facing which eventually turns out to be barrier in their usage or encumbers them to evade using credit cards. A set of three questions was asked by the existing users to know the obstruction factor. The first one is to check whether the users had missed their payment of outstanding balances which caused their less frequent use of this payment mechanism.  The result compiled through it concludes that majority of the respondents admitted that they had cleared their balance in full always and they pay it completely not partially. The second question was to measure difference, if any, in the sizes of transactions. Normally it has been seen (as described by previous researchers like Amin H., 2008 Devlin, Worthington, and Gerrard (2007)) that merchants feel hesitate to accept payment through credit card when payment is above than the certain level (100RMB in China). But the situation in Pakistan is different. A larger number of respondents have admitted that their merchant accepts payment through credit card irrespective of the size of transaction. The third question was related with the security concerns of the users. The responses to the question reveal an awareness of some of the security issues which still bedevil the credit card product. The responses were ambiguous which can be interpreted as the cardholders are not so much satisfies with the security features provided by the issuers. According to them the issuers must include some superfluous security features that might help them to overcome their perceived security concern and hence increase their usage. On the basis of research findings we can conclude that security is one of those factors which are affecting the cardholders massively and causing the circumstances which result in low usage among the Pakistani community.

The third section of the findings portion deals with explaining the variables or factors those are important for both users and non-users in their decision of adopting or using a credit card. This research found their intensity i.e. how important each of the variables is for the person thinking to adopt or use plastic payment system and absence of which may eventually act as a barrier in the process. These 12 variables and their means for both cardholders and non- cardholders is given below and for the sake of simple understanding these are categorized in descending order where we can easily identify the variable or factor that has more importance in the eyes of users and non-users. We will first explain the variable for non- cardholders and than for cardholders

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TABLE 4:              BARRIERS

	Non - Cardholders
	Mean	S.D.
Lack of information	3.95	0.98
High Interest Rates	3.92	1.31
Hidden Charges	3.92	1.27
Short Repayment Period	3.80	1.06
Strict Legal Requirements	3.73	1.25
Complexity of Information	3.71	1.09
Application Approval Time	3.57	1.31

The non-cardholders have a distinct tidy of these 7 variables as compared to cardholders which is quite obvious as the two sections of the audiences have different priorities and curious feelings toward certain factors. The most important reason for not adopting the credit card is Lack of information. The respondents agreed that paucity of information provided by issuers is most important than the other listed variable which they consider before making the decision about having a credit card or which maneuver as a barrier in their decision. The similar type of results were found by Delener and Katzenstein (1994) and Gan, Maysami, and Koh (2008) which also highlighted that Asian and Hispanic consumers generally not enthused to have a credit card because of minimal information.

The second important listed barrier is high interest rates and heavy additional charges with the equal mean value but the variance is more in interest rates. These two variables are interrelated and respondents with no credit card said that these two high costs are major reason for their not espousing the credit card. The issuer’s are increasing the interest rates and additional charges like annual fee, transaction cost etc. which create a big gap for low or middle income people in their desire of adopting a credit card.

The fourth most mentioned reason was short repayment period. The survey results revealed that respondents put importance to short repayment period as compared to other listed reason but not more than the already mentioned factors. A large number of respondents agreed that they put importance to repayment period when they are considering having a credit card and its short life ultimately impedes them from adopting it. 

The fifth listed reason is strict legal requirement. The research survey found that people are wretched with legal complications attached with credit card ownership and application form and they have jabbed their decision for adopting it because of these legal complications. Here we can conclude that legal requirements are working as an obstacle for those persons who want to adopt this payment mechanism and companies should slant their requirements for better growth of the credit card industry. 

Complexity of information was mentioned sixth important barrier with the mean value of 3.71. This implies that the information provided with the credit card brochures and other helping materials is so complex that is not easy to understand by a common man. The large number of respondents put this complex information as a barrier in their adoption process.

Problem statement

Few years back, it has been estimated that there are likely to be around half million potential card users in Pakistan, in the near future (http://www.instecdigital.com/1/plastic.htm).

According to SBP report, the tendency of number of cardholders is increasing. But the major portions of people are attracted toward debit cards. Acceptance of credit cards among the general audience has been quite low in comparison to debit cards and ATM cards.

Still major proportion of population is not having credit card or avoid to use it even they have sufficient resources and affordability of credit cards. There is a need to explore the reasons of such problems in Pakistan as:

• What is the relationship between customer’s spending & credit & debit card usage?

• Why people are not attracted towards credit card.

• Why cardholders are using there credit cards less frequently.

• How important monetary factors are for current and potential credit card users.

Recommendations

In Pakistan capital market, causing low usage and adoption rate of credit cards. Although these variables are difficult to remove but their impact can be reduced as most of the variables are wrongly perceived by the general public. In this context, panel of researchers provides some recommendations for both issuing companies and consumers, which, if considered, may encourage the climbing usage and adoption rate.

•        Issuer’s are required to offer discounts, gifts or bonuses if the cardholders pay their outstanding balance within time limit. This will create psychological impression in the minds of consumers and will motivate them to pay their bills on time.

•        It was found in the study that information level of respondents regarding credit cards and its features is quite low. The issuer companies must ensure the proper flow of information to both cardholders and non-cardholders. The provision of information should be through advertisement using different promotional channels that are close to the potential consumers.

•        It was found in the results that information attached with credit cards is of complex nature even cardholders doesn’t exactly know about credit card terms and payoff times. To reduce its complexity, issuing companies must provide detailed leaflets/brochures. They should appoint authorized officers that will provide guidance regarding features of the credit cards. Currently, Habib Bank Limited is following this strategy and appointed new staff members just to handle applications of credit and debit cards.

•        Cardholders are to think rationally and should pay outstanding balance within predetermined time period to avoid interest that is against Islamic values.

•        It is found in the results of the research that most of the Pakistani people avoid using credit cards as they consider it against Islam because of inclusion of interest. To avert this perception, companies should introduce the concept of Islamic credit card provided by author (Bakshi, 2006) currently eminent in UK. The other option could be to charge penalty instead of interest if some cardholders become habitual of not paying balances on time.

•        Longer and flexible payback period of making  finance payment with installment plans encourages the adoption and use of credit cards.

•        One of the major problems is the unavailability of paying centers and Pos machines in different outlets in Pakistan. To remove this issuer’s are required to contract with other businesses like petrol pumps, domestic stores and financial institutions that will provide credit card services to customers in broader

way.

For increased acceptability among the people of Pakistan, banks and other issuing companies must reduce their annual fees and additional charges.