#1
Which of the following is an example of a traditional payment method?
Cash
ExplanationCash is a physical form of currency widely accepted for transactions.
#2
Which of the following payment methods is commonly used for recurring bills and subscriptions?
Direct debit
ExplanationDirect debit allows automatic deductions for recurring payments like bills and subscriptions.
#3
What is the primary function of a routing number in the United States banking system?
Identifying the bank branch
ExplanationRouting numbers identify specific bank branches in the U.S. for electronic transactions.
#4
Which of the following is a characteristic of a contactless payment?
Involves tapping the card or device against a reader
ExplanationContactless payments involve tapping the card/device against a reader for convenience.
#5
Which of the following is a characteristic of a wire transfer?
It is irreversible once initiated
ExplanationWire transfers are typically irreversible once initiated, ensuring a secure and final transaction.
#6
What does the acronym 'ACH' stand for in the context of financial transactions?
Automated Clearing House
ExplanationACH stands for Automated Clearing House, a system for electronic funds transfer.
#7
Which of the following is NOT a characteristic of blockchain technology?
Reversibility
ExplanationBlockchain transactions are typically irreversible, ensuring security and immutability.
#8
What is the term used for a transaction that occurs without the involvement of a traditional financial institution?
Peer-to-peer (P2P) transaction
ExplanationA peer-to-peer transaction happens directly between parties without intermediaries like banks.
#9
What is the primary function of a SWIFT code in international transactions?
Identifying the recipient's bank
ExplanationSWIFT codes help identify specific banks in international transactions.
#10
Which of the following is NOT a type of credit card transaction?
Debit transaction
ExplanationDebit transactions involve using funds directly from the account, not credit.
#11
What is the purpose of a CVV (Card Verification Value) code on a credit or debit card?
To verify the cardholder's identity
ExplanationCVV codes add an extra layer of security by verifying the cardholder's identity.
#12
Which of the following payment methods is typically associated with the highest level of anonymity?
Cash
ExplanationCash transactions offer a high level of anonymity, as they leave no digital trail.
#13
What does the term 'chargeback' refer to in the context of credit card transactions?
A refund requested by the cardholder
ExplanationA chargeback is a process where a cardholder requests a refund from a credit card transaction.
#14
What is the primary purpose of an IBAN (International Bank Account Number)?
Facilitating international transactions
ExplanationIBANs facilitate smooth international transactions by providing a standardized account identifier.
#15
What is the purpose of a 'merchant category code' (MCC) in credit card transactions?
To categorize the type of business
ExplanationMCCs categorize businesses for tracking and analyzing credit card transaction data.
#16
What does the term 'ACH' stand for in the context of financial transactions?
Automated Clearing House
ExplanationACH stands for Automated Clearing House, a system for electronic funds transfer.