Payment Processing & Security Flashcards

What is the primary advantage of using a payment gateway over directly processing credit cards?

Answer: It securely transmits payment data between the customer, merchant, and bank

A payment gateway securely encrypts and transmits card data between the customer, merchant, and acquiring bank, reducing the merchant's security burden.

What does AVS (Address Verification System) check during an ecommerce transaction?

Answer: The numeric portions of the billing address against the card issuer's records

AVS compares the numeric parts of the billing address (street number and ZIP code) provided by the customer against the information on file with the card issuer.

Which payment method allows customers to buy now and pay in installments without a credit card?

Answer: Buy Now Pay Later (BNPL)

Buy Now Pay Later (BNPL) services like Afterpay and Klarna allow customers to receive goods immediately and repay in installments, often interest-free.

What is a merchant account in ecommerce payment processing?

Answer: A bank account that allows businesses to accept card payments

A merchant account is a type of bank account that enables a business to accept and process electronic payment card transactions.

What is the purpose of SSL/TLS certificates on an ecommerce website?

Answer: To encrypt data transmitted between the customer's browser and the web server

SSL/TLS certificates encrypt the data exchanged between a customer's browser and the ecommerce server, protecting sensitive information like card numbers from interception.

Which metric measures the percentage of payment transactions that are successfully authorized?

Answer: Authorization rate

Authorization rate is the percentage of submitted card transactions that are approved by the issuing bank, directly impacting revenue.