CES Payment Processing & Security 2 — Questions and Answers
Question 1: What is the primary advantage of using a payment gateway over directly processing credit cards?
- It securely transmits payment data between the customer, merchant, and bank (Correct answer)
- It eliminates all transaction fees
- It removes the need for merchant accounts
- It automatically converts currencies without fees
Correct 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.
Question 2: What does AVS (Address Verification System) check during an ecommerce transaction?
- The numeric portions of the billing address against the card issuer's records (Correct answer)
- The customer's email address against a fraud database
- The shipping address against a USPS database
- The customer's phone number against billing records
Correct 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.
Question 3: Which payment method allows customers to buy now and pay in installments without a credit card?
- Buy Now Pay Later (BNPL) (Correct answer)
- ACH transfer
- Wire transfer
- Prepaid debit card
Correct 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.
Question 4: What is a merchant account in ecommerce payment processing?
- A bank account that allows businesses to accept card payments (Correct answer)
- A loyalty rewards account for frequent customers
- A business account for managing refunds only
- An account for storing cryptocurrency payments
Correct 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.
Question 5: What is the purpose of SSL/TLS certificates on an ecommerce website?
- To encrypt data transmitted between the customer's browser and the web server (Correct answer)
- To verify the merchant's business registration
- To optimize page load speed for mobile devices
- To prevent bots from scraping product prices
Correct 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.
Question 6: Which metric measures the percentage of payment transactions that are successfully authorized?
- Authorization rate (Correct answer)
- Conversion rate
- Chargeback ratio
- Settlement rate
Correct answer: Authorization rate
Authorization rate is the percentage of submitted card transactions that are approved by the issuing bank, directly impacting revenue.
CES Payment Processing & Security 2
What is the primary advantage of using a payment gateway over directly processing credit cards?