Payment Systems & Technology Flashcards
6 cards from real APRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Payment Systems & Technology flashcards as text
What is a payment gateway?
Answer: A technology service that authorizes and processes payment transactions between merchants and acquiring banks
A payment gateway securely transmits transaction data from the merchant to the payment processor, handles authorization requests, and returns approval or decline responses in real-time.
What is the difference between card-present and card-not-present transactions?
Answer: Card-present involves the physical card at the point of sale; card-not-present is remote (online, phone) without the physical card
Card-present transactions (in-store chip/swipe/tap) have lower fraud rates because the physical card is verified. Card-not-present transactions (online/phone) have higher risk because identity verification is harder.
What is 3D Secure (3DS) authentication?
Answer: An additional authentication layer for online card payments requiring cardholder verification through their issuing bank
3D Secure adds an authentication step during online checkout where the cardholder verifies their identity through their issuing bank (via password, biometric, or one-time code), reducing CNP fraud.
What is real-time payments (RTP) and how does it differ from traditional payment processing?
Answer: Payments that are initiated, cleared, and settled within seconds, available 24/7/365
Real-time payments are processed end-to-end within seconds, providing immediate funds availability, unlike traditional ACH or card payments that may take hours or days to settle.
What is open banking and its implications for payment security?
Answer: A framework allowing third-party access to banking data through APIs, requiring strong authentication and security controls
Open banking allows authorized third parties to access banking data and initiate payments through secure APIs, requiring robust authentication (Strong Customer Authentication) and data protection measures.
What is biometric authentication in payment systems?
Answer: Using unique biological characteristics (fingerprint, face, iris) to verify identity for payment transactions
Biometric authentication uses unique biological traits that are difficult to replicate, providing stronger identity verification than passwords or PINs for authorizing payment transactions.