CFP Digital Payments & Financial Services 3

Question 1

Which technology allows a mobile device to emulate a physical payment card by storing credentials in a secure element or cloud?

Accepted Answer

Host Card Emulation (HCE)

Answer

Host Card Emulation (HCE) lets Android devices emulate NFC payment cards without a hardware secure element, using cloud-based credentials.

Question 2

A BNPL (Buy Now Pay Later) provider must be most cautious about which regulatory risk when offering credit to consumers?

Accepted Answer

Truth in Lending Act (TILA) / Regulation Z disclosure requirements

Answer

BNPL products may qualify as credit under TILA/Reg Z, requiring clear APR disclosures; regulators have increased scrutiny on BNPL for compliance gaps.

Question 3

In the context of payment fraud, what is 'synthetic identity fraud'?

Accepted Answer

Combining real and fictitious information to create a new identity

Answer

Synthetic identity fraud involves blending real data (like an SSN) with fabricated details to create a fake but plausible identity used to obtain credit.

Question 4

What is the primary purpose of a payment orchestration layer in a merchant's technology stack?

Accepted Answer

To route transactions across multiple PSPs and acquirers for optimization

Answer

Payment orchestration platforms sit above PSPs, intelligently routing transactions to optimize for authorization rates, cost, and redundancy across multiple processors.

Question 5

Which financial crime typology is most directly countered by transaction monitoring systems in digital payment platforms?

Accepted Answer

Money laundering via structuring (smurfing)

Answer

Transaction monitoring systems are designed to detect structuring (breaking large cash amounts into smaller transactions to evade BSA reporting thresholds).

(CFP) Certified Fintech Practitioner Practice Test

(CFP) Certified Fintech Practitioner Practice Test

CFP Digital Payments & Financial Services 3