#1
Which of the following is NOT a common type of financial transaction?
Subtraction
ExplanationFinancial transactions involve addition or transfer, not subtraction.
#2
Which of the following is NOT typically involved in a credit card transaction?
ATM network
ExplanationATM networks are not directly involved in credit card transactions.
#3
Which of the following is NOT a common type of electronic funds transfer (EFT)?
Cash withdrawal
ExplanationCash withdrawals do not involve electronic transfers.
#4
What does the acronym POS stand for in the context of payment processing?
Point of Sale
ExplanationPOS refers to the location where transactions are completed.
#5
Which of the following is NOT a commonly used payment card network?
Bitcoin
ExplanationBitcoin is a cryptocurrency, not a payment card network.
#6
Which of the following is a common feature of P2P payment apps?
Immediate fund availability
ExplanationP2P apps offer instant transfer of funds between users.
#7
What does ACH stand for in the context of payment processing?
Automated Clearing House
ExplanationACH is the network for electronic funds transfers between banks.
#8
Which of the following is an example of a payment gateway?
PayPal
ExplanationPayPal acts as an intermediary between merchants and banks for online payments.
#9
What is the term used to describe the process of converting a physical check into an electronic payment?
Check truncation
ExplanationCheck truncation eliminates the need for physical check transportation.
#10
What is the main function of a payment processor?
To authorize credit card transactions
ExplanationPayment processors validate and authorize transactions for merchants.
#11
Which of the following is a characteristic of a chargeback?
It is initiated by the cardholder to dispute a transaction
ExplanationChargebacks allow cardholders to challenge unauthorized transactions.
#12
What is the purpose of a tokenization system in payment processing?
To secure sensitive payment data by replacing it with a unique identifier
ExplanationTokenization protects payment information by substituting it with tokens.
#13
What is the primary function of a SWIFT code?
To identify a bank or financial institution globally
ExplanationSWIFT codes ensure accurate routing of international transactions.
#14
What is the purpose of PCI DSS in the context of payment processing?
To ensure the security of credit card transactions
ExplanationPCI DSS sets standards for secure processing, storage, and transmission of card data.
#15
What does the term 'float' refer to in the context of financial transactions?
The delay between when a check is written and when it clears the account
ExplanationFloat represents the time gap in check processing.
#16
What is the primary purpose of KYC (Know Your Customer) regulations in banking?
To prevent money laundering and fraud
ExplanationKYC ensures customer identities are verified to prevent illicit activities.
#17
What does the term 'chargeback ratio' refer to in payment processing?
The ratio of chargebacks to total transactions
ExplanationChargeback ratio measures the frequency of disputed transactions.
#18
What is the purpose of a BIN (Bank Identification Number) in payment card processing?
To identify the issuing bank of a payment card
ExplanationBINs help route transactions and identify the card issuer.