Ecommerce Ecommerce Payment & Security 2 — Questions and Answers
Question 1: What is tokenization in the context of ecommerce payment security?
- Replacing sensitive card data with a non-sensitive placeholder token (Correct answer)
- Splitting a payment into multiple installments
- Encrypting the checkout page URL
- Verifying the merchant's business license
Correct answer: Replacing sensitive card data with a non-sensitive placeholder token
Tokenization substitutes actual card numbers with randomly generated tokens so that stored data is worthless if breached.
Question 2: Which US regulation requires websites to disclose data collection practices to consumers?
- California Consumer Privacy Act (CCPA) (Correct answer)
- CAN-SPAM Act
- DMCA
- FTC Act Section 5 only
Correct answer: California Consumer Privacy Act (CCPA)
The CCPA grants California residents rights over their personal data and requires businesses to disclose how they collect, use, and sell that data.
Question 3: What does CVV/CVC stand for and why does ecommerce use it?
- Card Verification Value/Code — proves the buyer physically has the card (Correct answer)
- Customer Verification Visit — tracks return customers
- Cart Volume Value — measures basket size
- Content Validity Check — validates product listings
Correct answer: Card Verification Value/Code — proves the buyer physically has the card
CVV/CVC is the 3- or 4-digit security code on a card that confirms the purchaser has the physical card, reducing card-not-present fraud.
Question 4: What is the primary advantage of using a hosted payment page instead of an on-site form?
- Card data never touches the merchant's servers, reducing PCI scope (Correct answer)
- It improves product page load speed
- It enables one-click upsells
- It automatically generates tax invoices
Correct answer: Card data never touches the merchant's servers, reducing PCI scope
A hosted payment page processes card data entirely on the payment provider's servers, so the merchant is largely removed from PCI DSS compliance scope.
Question 5: Which alternative payment method has grown rapidly in US ecommerce by letting shoppers split purchases into interest-free installments?
- Buy Now Pay Later (BNPL) (Correct answer)
- ACH bank transfer
- Prepaid gift cards
- Wire transfer
Correct answer: Buy Now Pay Later (BNPL)
BNPL services like Afterpay, Klarna, and Affirm allow customers to split a purchase into several installments, boosting conversion and average order value.
Question 6: What is 'friendly fraud' in ecommerce?
- A customer filing a chargeback for a legitimate purchase they actually received (Correct answer)
- A hacker using stolen credentials to buy goods
- A merchant overcharging customers by a small amount
- An employee stealing store credit
Correct answer: A customer filing a chargeback for a legitimate purchase they actually received
Friendly fraud occurs when a customer intentionally disputes a valid charge with their bank after receiving the item, effectively getting goods for free.
Ecommerce Ecommerce Payment & Security 2
What is tokenization in the context of ecommerce payment security?