Transaction and Payment Processing Flashcards
6 cards from real CRCT practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Transaction and Payment Processing flashcards as text
A retail merchant processes approximately 2 million credit card transactions annually. According to the Payment Card Industry Data Security Standard (PCI DSS), which of the following is the primary requirement for this merchant to validate their compliance?
Answer: Completing an annual Self-Assessment Questionnaire (SAQ).
Merchants are categorized into levels based on their transaction volume. A merchant processing 1 to 6 million transactions annually is classified as a Level 2 merchant. The primary requirement for Level 2 merchants is to complete an annual Self-Assessment Questionnaire (SAQ) to self-evaluate their PCI DSS compliance. While quarterly scans and other measures are also required, the SAQ is the core validation method for this level.
A customer service representative at a mid-sized company receives a call from a customer disputing a charge on their credit card statement, claiming they never received the merchandise. This initiates a chargeback process. What is the company's first course of action upon receiving the chargeback notification?
Answer: Review the transaction details and gather evidence to dispute the chargeback if it's deemed legitimate.
When a merchant receives a chargeback, the first step is to investigate the claim. This involves reviewing transaction records, shipping confirmations, and any communication with the customer. If the merchant has compelling evidence that the transaction was valid and the merchandise was delivered, they can dispute the chargeback. Immediately refunding without investigation can lead to unnecessary losses, especially in cases of 'friendly fraud'.
To ensure strong internal controls over cash receipts and prevent fraud, which of the following practices is most effective?
Answer: Segregating duties so that different individuals are responsible for receiving, recording, and reconciling cash.
Segregation of duties is a fundamental principle of internal control. By dividing the responsibilities for cash handling (receiving payments), record-keeping (applying payments), and reconciliation (comparing deposits to records), a company creates a system of checks and balances that significantly reduces the risk of fraud and error. Assigning all tasks to one person creates a significant opportunity for misappropriation.
A revenue control technician is performing a daily reconciliation of credit card transactions. They notice that the total amount deposited into the company's bank account from the payment processor is less than the total sales recorded in the point-of-sale (POS) system for that day. Which of the following is the most likely reason for this discrepancy?
Answer: The deduction of processing fees by the payment processor.
Payment processors charge fees for their services, which are typically deducted from the batch of transactions before the net amount is deposited into the merchant's account. This is a very common reason for differences between gross sales and net deposits during reconciliation. While the other options are possible, processing fees are an expected and regular part of the process.
Which of the following describes 'Card-Not-Present' (CNP) fraud?
Answer: A criminal using stolen credit card information to make purchases online or over the phone.
Card-Not-Present (CNP) fraud occurs when a transaction is made without the physical card being present, such as in e-commerce or telephone orders. Criminals use stolen card numbers, expiration dates, and security codes to make unauthorized purchases.
A company is implementing a new system for processing customer payments received by mail. To strengthen internal controls, they decide to use a lockbox system. How does a lockbox system improve control over cash receipts?
Answer: It directs customer payments to a post office box controlled by the bank, which reduces employee access to cash.
A lockbox system is an internal control where customers mail their payments directly to a post office box that is managed by the company's bank. The bank then collects and deposits the payments directly into the company's account. This system significantly improves security by preventing company employees from having direct access to the cash and checks, thereby reducing the risk of theft or misappropriation.