CPP CPP Payment Networks & Card Scheme Rules 2

Question 1

What is the 'liability shift' that occurred with EMV chip card adoption in the US in 2015?

Accepted Answer

Fraud liability moves to whichever party (issuer or merchant) does not support EMV

Answer

The EMV liability shift means that if a counterfeit chip card is used at a non-chip terminal, the merchant (acquirer) is liable; if a mag-stripe card is used at a chip terminal, the issuer remains liable.

Question 2

Which term describes the difference between a card's authorization amount and the final settled amount?

Accepted Answer

Authorization hold

Answer

An authorization hold reserves funds on the cardholder's account; the final settlement may differ (e.g., tips at restaurants), and the difference is resolved during clearing.

Question 3

What is a 'floor limit' in card acceptance?

Accepted Answer

The maximum transaction amount a merchant can process without obtaining an authorization

Answer

A floor limit is a threshold below which some merchants (typically in specific offline environments) may complete a transaction without real-time authorization.

Question 4

Under Visa's dispute resolution process, what is the first step a cardholder must typically take before a chargeback is filed?

Accepted Answer

Contact the merchant directly to attempt resolution

Answer

Visa's dispute guidelines require cardholders to first attempt to resolve the issue with the merchant before the issuer can file a chargeback on their behalf.

Question 5

What does 'acquirer' mean in the card payment ecosystem?

Accepted Answer

The financial institution that processes transactions and holds the merchant's account

Answer

An acquirer (or acquiring bank) is the financial institution that contracts with merchants to process card transactions and deposit funds into the merchant's account.

CPP - Certified Payment Professional Practice Test

CPP - Certified Payment Professional Practice Test

CPP CPP Payment Networks & Card Scheme Rules 2