Term
| 1) What data elements are MOST critical to the payments professional when comparing a merchant’s current statement to the new offer proposed by the payments professional? A) Cancellation fee, monthly minimum fee, and application fee B) PCI fee, non-compliance fee, and downgrade fee C) Statement fee, on file fee, and chargeback fee D) Volume, average ticket, rate, and transaction fee |
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Definition
| D) Volume, average ticket, rate, and transtion fee |
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Term
2) Using the interchange plus model, which of the following costs can be adjusted during negotiations with the merchant?
A) Acquirer Markup
B) Card Brand fees
C) Discover interchange rates
D) Visa interchange rates |
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Definition
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Term
3) For most credit card transitions, what is the MAXIMUM number of days between sale and when a dispute request can be challenged?
A) 45 days
B) 75 days
C) 120 days
D) 365 days |
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Definition
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Term
4) Which one of the following Merchants is considered the highest risk?
A) auto parts
B) buy here/pay here furniture
C) taxi/limo service
D) Time sharing advertisting |
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Definition
| D) Time sharing advertisting |
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Term
5) In a blended pricing method (three tiers, enhanced bill-back), a merchant manually enters a Visa card transaction, but forgets to enter the AVS. What is the appropriate interchange category for this transaction?
A) CPS/retail
B) EIRF
C) Key entered
D) Standard |
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Definition
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Term
6) What information should be discussed at the time of sale in order to BEST establish a credible relationship between the payment profession and the merchant?
A) Discount rates, chargeback fees and programming fees
B) Discount rates, transaction fees and settlement fees
C) On-file fees, chargeback fees and NSF fees
D) On-file fees, transaction fees and statment fees |
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Definition
| B) Discount rates, transaction fees and settlement fees |
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Term
7) MasterCard's Convenience Purchases Interchange qualifications applies to which of the following transitions?
A) Online Bill Pay Services
B) Payment at autmated car washes
C) Payment for Taxi services
D) Transactions with a convience fee applied |
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Definition
| C) Payment for Taxi services |
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Term
8) When proposing check processing services to be included in a merchant’s existing terminal, what steps should be taken to ensure the ability to process transactions?
A) Verify check services are activated and the proper merchant TID number information has been added to the terminal.
B) Verify connectivity and complete a series of sample check processing transactions on the terminal.
C) Verify that the account can be approved based on merchant demographics and check limits.
D) Verify the terminal and check reader/imager compatibility with the processor. |
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Definition
| D) Verify the terminal and check reader/imager compatibility with the processor |
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Term
9) A payments professional believes that a prospective client with a large customer base would benefit from the use of a PCI-compliant credit card storage module. However, prior to offering the solution, the payments professional needs to identify the merchant's key pain points and goals. As part of the discovery process, which of the following questions would BEST elicit the merchant's need to implement the solution?
A) "Are you concerned about the security risks associated with storing customer data?"
B) "Do you process recurring or repeat transactions? If so, how do you obtain and maintain the data?"
C) "How do you measure the business reputation risk of a possible data breach?"
D) "How would the option of removing data from your system improve business risk and PCI compliance efforts?" |
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Definition
| D) "How would the option of removing data from your system improve business risk and PCI compliance efforts?" |
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Term
10) A payments professional meets with a merchant who discloses that it has subprime credit. What additional materials may be required?
A) Application fee, 20% rolling reserve, and background check
B) Cash deposit, bank statements, and personal guarantee
C) Personal guarantee, copy of Social Security card, and proof of automobile insurance
D) Profit and loss statement, previous processing statements, and bank statements |
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Definition
| D) Profit and loss statement, previous processing statements, and bank statements |
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Term
11) When submitting documents for a new or existing merchant, which of the following merchant types can be boarded for American Express OptBlue?
A) A company selling timeshares that processes $550,000 in annual American Express charge volume?
B) A company selling vaccumms door-to-door that processes $250,000 in annual American Express charge volume?
C) A resturant that processes $900,000 in annual American Express charge volume?
D) A resturant that processes $1.5 Million in annual American Express charge volume? |
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Definition
| C) A resturant that processes $900,000 in annual American Express charge volume? |
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Term
12) How is the effective rate calculated?
A) Total dollars spent divided by the sales dollar volume
B) Total dollars spent minus statement or minimiun fees
C) Total sales dollar volume divided by total dollars spent
D) Transaction fees plus rate divided by sales dollar volume |
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Definition
| A) Total dollars spent divided by the sales dollar volume |
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Term
13) A Merchant has contact a payments professional to inquired about the number of increases in returned checks. How should the payments professional respond to the Merchant inquiry?
A) Evaluate the Merchant need for an improved terminal
B) Offer the ability to accept other payment card types
C) Recommend a check guarantee service
D) Try to sell the Merchant gift card program |
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Definition
| C) Recommend a check guarantee service |
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Term
14) A Merchant has an IP-facing device. Which action MUST be completed to ensure PCI compliance?
A) Avoid storing any card holder date
B) Complete IP scanning quarterly and complete an SAQ annually
C) Follow best practices for reading, transmitting and storing cardholder data
D) Hire a qualified security assessor |
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Definition
| B) Complete IP scanning quarterly and complete an SAQ annually |
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Term
15) Which of the following describes a valid reason for a Merchant to be removed from the MATCH file?
A) The merchant has implemented a chargeback reduction plan and has reduced its chargebacks
B) The merchant has paid a fine and has become compliant
C) The merchant was erroneously placed on the MATCH list, or the listing is for reason 12
D) The merchant's credit report has had a bankruptcy removed. |
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Definition
| C) The merchant was erroeoudsly placed on the MATCH list, or the listing is for reason 12 |
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Term
16) During review of a potential e-commerce merchant's website, which of the following information MUST be present for approval of a merchant account?
A) Delivery policy, currency conversion, and export restrictions
B) Details regarding when credit cards are charged
C) Order fulfillment information and privacy statements
D) Terms and conditions, prices, and delivery policy |
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Definition
| A) Delivery policy, currency conversion, and export restrictions |
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Term
17) A merchant does not accept credit card transactions for amounts under $20. What possible repercussions issued by the card brands could stem from this process?
A) The merchant may be fined and required to enroll in an education program.
B) The merchant may be prohibited from running debit sales.
C) The merchant may receive an increase in its interchange rates.
D) The merchant may be warned, fined, or terminated. |
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Definition
| D) The merchant maybe warned, fined and terminated. |
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Term
Upon entering a merchant's store, a payments professional notices signs at the storefront as well as next to the register stating, “We impose a surcharge of 5% on the total amount on all credit card transactions, which is not greater than our cost of acceptance. We do not surcharge debit cards.”
18) Which of the following statements would be MOST appropriate for the payments professional to make to the merchant regarding surcharges allowed by the card brands?
A) "Five percent is more than the maximum surcharge amount allowed of 4%."
B) "If you surcharge credit card transactions, you must do the same to debit card transactions."
C) "Surcharging is allowed by the card brands as long as you register with your acquirer."
D) "Surcharging is not allowed by the card brands." |
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Definition
| A) "5% is more than the maximuim surcharge amount allowed of 4%" |
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Term
19) A merchant is complaining about complicated processing activity statements and asks for something "simpler" and "easier to understand." Which of the following solutions should the payments professional offer to BEST satisfy the merchant's request?
A) Bundled pricing
B) Cost-plus pricing
C) Enhanced cost pricing
D) Four-tier pricing |
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Definition
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Term
20) If a merchant contacts the payments professional and inquires about any early termination fees (ETF), to what should the payments professional be alerted?
A) The merchant may be inquiring about additional services soon.
B) The merchant may be performing annual reviews of contracts.
C) The merchant may want to upgrade their equipment.
D) The merchant may be thinking of closing their account. |
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Definition
| D) The merchant may be thinking of closing their account. |
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Term
21) Which of the following information typically would be found on a merchant's monthly billing statement received from the merchant acquirer?
A) Contract terms
B) Discount rates
C) Gateway fees
D) Terminal lease details |
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Definition
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Term
22) During the review of a leads list, what action should a payments professional take FIRST to maximize lead approval potential?
A) Ensure the leads comply with the company’s underwriting guidelines.
B) Ensure the leads comply with specific card brand guidelines.
C) Request previous processing statements from each lead.
D) Review the length of operation for each lead. |
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Definition
| A) Ensure the leads comply with the company’s underwriting guidelines. |
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Term
A small business is unhappy with its current service provider’s lack of transparency in pricing, and the merchant is frustrated with the requirement to include Level III enhanced data to obtain a qualified commercial card discount rate because the burden of keying the additional data is cumbersome to staff. While the business has an even mix of consumer and commercial cards, the merchant reveals that over 90% of the commercial card volume comes from a single client who utilizes a Visa Business card. The merchant notes, however, that the business would like to take on clients in the future with a comparable commercial card volume.
23) Based on the information shared by the merchant, which of the following recommendations should the payments professional make to the merchant in order to resolve current frustrations and keep the business positioned to accept future clients?
A) Keep the current virtual terminal, and continue to pass through Level III data.
B) Keep the current virtual terminal, but recommend that the merchant pass through Level II data only.
C) Purchase a stand-alone terminal to replace the current virtual terminal, and continue to pass through Level III data.
D) Transition to an interactive voice response (IVR) authorization and capture solution. |
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Definition
| B) Keep the current virtual terminal, but recommend that the merchant pass through Level II data only. |
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Term
24) Which of the following represents the BEST justification for using a payments gateway?
A) Provides a merchant with a single access point for mobile and stationary devices
B) Provides a merchant with access to faster transactions for all customers
C) Provides a merchant with Internet access in order to support an online shopping cart
D) Bypasses the costly PCI compliance process |
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Definition
| A) Provides a merchant with a single access point for mobile and stationary devices |
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Term
25) What should a payments professional collect from a merchant to submit with the merchant application for a public corporation?
A) Business license
B) Executive salary details
C) Financials
D) Personal guarantor signature |
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Definition
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Term
26) Why is it important that all data points on the application are accurate?
A) To ensure compliance with federal regulations
B) To ensure proper billing and accounting services
C) To build a rapport with the merchant
D) To build a reliable merchant database |
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Definition
| B) To ensure proper billing and accounting services |
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Term
27) A payments professional submits an application for a large e-commerce merchant, but is declined by the processor due to pricing concerns. What could the payments professional have done prior to submitting the application in order to better foresee the processor’s decision?
A) Contact the processor and document the time spent obtaining the application.
B) Contact the processor and request that the merchant be approved at any cost.
C) Evaluate the risk versus reward tolerance ratio acceptable to the processor.
D) Write and submit several merchant applications so that one will be accepted. |
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Definition
| C) Evaluate the risk versus reward tolerance ratio acceptable to the processor. |
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Term
28) A prospective high-volume retail merchant with an average ticket of an $8.00 transaction pays a $0.20 transaction fee. What is the BEST interchange category for this merchant?
A) CPS small ticket credit
B) CPS retail credit
C) EIRF credit
D) EIRF debit |
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Definition
| A) CPS small ticket credit |
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Term
29) Which of the following groups of associations would be MOST helpful to consult when trying to identify and cultivate new national business?
A) American Association of Franchisees and Dealers (AAFD), National Small Business Association (NSBA), National Retail Federation (NRF), and eCommerce Merchants Trade Association (ECMTA)
B) Federation of European Motorcycling Associations (FEMA), The American Psychological Association (APA), and North American Retail Hardware Association (NRHA)
C) Merchant Account Lead Association (MALA), Natural Products Association (NPA), Community Banks and Credit Unions Association (CBCA), and Merchant Level Sales Association (MLS)
D) World Federation of Direct Selling Associations (WFDSA), National Automated Clearing House Association (NACHA), and National Merchant Association (NMA) |
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Definition
| A) American Association of Franchisees and Dealers (AAFD), National Small Business Association (NSBA), National Retail Federation (NRF), and eCommerce Merchants Trade Association (ECMTA) |
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Term
30) Which peripheral device reads magnetic ink character recognition (MICR) information on checks?
A) Check imager
B) Computer scanner
C) Contactless reader
D) PIN pad |
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Definition
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Term
31) Which of the following groupings MOST closely constitutes the "payment channels" currently defined within the electronic payments industry?
A) ACH, checks, credit cards, and debit cards
B) Acquirer, gateway, processor, and direct connect
C) Face-to-face/card present, e-commerce, mail order/telephone order, and mobile
D) Gift cards, credit cards, debit cards, and prepaid cards |
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Definition
| C) Face-to-face/card present, e-commerce, mail order/telephone order, and mobile |
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Term
32) What is the MOST appropriate software application for a credit card terminal used by a retail merchant who wants an automatic batch at the end of a business day?
A) Back-end capture
B) Front-end capture
C) Host capture
D) Terminal capture |
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Definition
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Term
33) Which technique is MOST likely to increase a payments professional's success rates?
A) Ask for referrals from existing merchants.
B) Disclose all pricing and terms prior to contract execution.
C) Ensure the merchant has up-to-date terminals and PIN pads.
D) Provide the merchant with a portion of the monthly residual. |
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Definition
| B) Disclose all pricing and terms prior to contract execution. |
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Term
34) Which of the following is MOST useful as a source for lead generation?
A) Outgoing mailers and printed advertisements
B) Phonebook listings
C) Referral partnerships
D) Walk-in traffic to the agent's location |
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Definition
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Term
35) When using the gross discount method, what are discount fees charged on?
A) All refund volume
B) All sales volume
C) Sales volume minus refund volume
D) Sales volume plus refund volume |
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Definition
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Term
36) Beginning with the card swipe, which of the following represents the basic movement of a transaction authorization from a credit card terminal?
A) Card reader → communications network → card brand → issuer → card brand → merchant
B) Card reader → communications network → settlement bank → card brand → settlement bank → merchant
C) Card reader → communications network → sponsor bank → card brand → issuer → card brand → sponsor bank → merchant
D) Card reader → communications network → front-end processor → card brand → issuer → card brand → front-end processor → merchant |
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Definition
| D) Card reader → communications network → front-end processor → card brand → issuer → card brand → front-end processor → merchant |
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Term
37) Which entity has the responsibility of querying the TMF/MATCH?
A) Acquirer
B) Card brand
C) Issuer
D) Merchant |
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Definition
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Term
38) While prospecting in a retail area, a payments professional notices that most of the merchants use the same service provider. How should the payments professional approach these merchants?
A) Advise the merchants that better pricing and new payment terminals are available with a change in providers.
B) Advise the merchants to report any issues with their current providers to the Better Business Bureau.
C) Ask the merchants to complete applications and submit the applications for same-day approval to offer a change.
D) Ask the merchants what they like about their current providers and what they would change. |
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Definition
| D) Ask the merchants what they like about their current providers and what they would change. |
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Term
39) Which requirement must ALL merchants complete in order to be PCI-compliant?
A) Complete quarterly scans.
B) Have a secure socket layer (SSL) certificate.
C) Store cardholder receipts electronically.
D) Submit a self-assessment questionnaire (SAQ). |
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Definition
| D) Submit a self-assessment questionnaire (SAQ). |
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Term
40) A payments professional encounters merchants who have competitive pricing that cannot be matched or beaten. What is the BEST course of action to make the processor aware of the market competition?
A) Call the sales manager and advise them to provide lower fees.
B) Contact customer support at the processor and advise them of the competition rates.
C) Obtain copies of merchant processing statements or the competing written offer to share with the employer or corporate office.
D) Write an email to the sales pricing department and find out why the competition has a better rate plan. |
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Definition
| C) Obtain copies of merchant processing statements or the competing written offer to share with the employer or corporate office. |
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Term
41) What is the MAIN factor in determining which SAQ a merchant needs to complete for PCI compliance?
A) Number of sales and chargebacks to the merchant in the past 12 months
B) Number of years of operation of the merchant
C) Type of product/service offered by the merchant
D) Type of device/system used for payments processing by the merchant |
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Definition
| D) Type of device/system used for payments processing by the merchant |
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Term
42) A merchant has an existing paper-based gift card program. Which of the following are the MOST important benefits of the merchant converting to an electronic gift card program?
A) Reconciliation, increased cash flow, and branding
B) Reloadable, cash advances, and universal acceptance
C) Reloadable, reward points, and branding
D) Cash advances, reward points, and reduced fraud |
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Definition
| A) Reconciliation, increased cash flow, and branding |
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Term
43) A payments professional notices an extremely large number of EIRF transactions for a client who uses a POS for monthly recurring billing (monthly dues). What is MOST likely causing this to happen?
A) Recurring transactions are automatically downgraded
B) The merchant does not have the AVS feature turned on.
C) The merchant is key entering most of the transactions.
D) The merchant is not EMV compliant. |
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Definition
| B) The merchant does not have the AVS feature turned on. |
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Term
44) During a meeting with a potential merchant, the merchant mentions to the payments profession that, on occasion, credit cards are used to get cash out of the till. How should the payments professional proceed with the conversation?
A) Inform the merchant that if a call is received from the risk area to explain that a product was purchased during the transactions.
B) Inform the merchant that this action is a violation of the card brand terms and that the processor would have to act accordingly if they identified the activity.
C) Tell the merchant that their business is no longer wanted and the actions will be immediately reported to the law enforcement.
D) Tell the merchant to use an odd dollar amount for the transactions so that the risk area cannot recognize the actions. |
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Definition
| B) Inform the merchant that this action is a violation of the card brand terms and that the processor would have to act accordingly if they identified the activity. |
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Term
45) Which entity is responsible for merchant payment system acceptance of card network products?
A) Agent
B) Cardholder
C) Issuer
D) Member |
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Definition
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Term
46) A merchant is processing under a retail account SIC/MCC code that was assigned during the application underwriting process, but the merchant has since switched the type of business and the method of transaction processing it provides to e-commerce. Which of the following repercussions might the merchant incur if this change is undocumented?
A) Additional annual fees from the processor/acquirer
B) Greater interchange fees and higher chargeback ratios
C) Lower interchange fees and lower chargeback ratios
D) Penalty fees from the card brands |
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Definition
| B) Greater interchange fees and higher chargeback ratios |
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Term
47) Which of the following is defined by the term front-end?
A) Authorization network
B) Ancillary product provider
C) Payment card association
D) Payments professional |
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Definition
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Term
48) What does a merchant service provider (MSP) offer?
A) Credit cards to merchants
B) Insurance to merchants and their businesses
C) Service on equipment that merchants own
D) Transaction processing solutions to merchants |
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Definition
| D) Transaction processing solutions to merchants |
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Term
49) AVS is recommended to be used on which of the following types of transactions?
A) Card-not-present and card-present keyed transactions only
B) Card-not-present, recurring, and card-present keyed transactions
C) Online, mail order, and foreign transactions
D) Online, recurring, and foreign transactions |
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Definition
| B) Card-not-present, recurring, and card-present keyed transactions |
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Term
50) A merchant is looking for software that can help manage customer data, customer interaction, sales, marketing, affiliate tracking, and advertising campaigns. Which type of solution should a payments professional recommend?
A) CRM system
B) Online gateway with a shopping cart
C) Online shopping cart
D) POS stand-alone terminal |
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Definition
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Term
51) Which of the following is a requirement for a transaction to qualify as a CPS/E-Commerce Basic interchange?
A) A card-not-present indicator is reported.
B) A magnetic card swipe must be passed in the authorization request.
C) The transaction date must be within seven days of the authorization date.
D) The transaction must be a maximum of $75. |
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Definition
| C) The transaction date must be within seven days of the authorization date. |
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Term
52) What is the allowed percentage of variance between an authorized amount and a settled amount for hospitality merchants?
A) 20%
B) 25%
C) 35%
D) 40% |
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Definition
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Term
53) Whose website provides the most relevant and reliable information for research about the information that is required to be displayed on a transaction receipt?
A) A qualified security assessor's
B) The card brand's
C) The issuing bank's
D) The PCI Security Standards Council's |
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Definition
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Term
54) How should a payments professional react if a potential merchant does not want to provide information required on the W-9 form?
A) Advise the merchant that following the 1099 reporting requirement gives them a financial benefit.
B) Create the info to complete the form to get the merchant boarded immediately.
C) Explain that all processors now have this requirement in place.
D) Explain the 1099K IRS regulations that require acquirers and payment entities to report gross sales. |
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Definition
| D) Explain the 1099K IRS regulations that require acquirers and payment entities to report gross sales. |
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Term
55) Upon analyzing a potential merchant's current processing statement, the payments professional discovers that the majority of transactions are in a non-qualified tier due to a large number of business-rate cards. The payments professional should contact the merchant and offer which of the following?
A) A billing plan that does not place business-rate cards in the non-qualified tier
B) A lower transaction fee for additional savings
C) A new point of sale device that will save the merchant on discount fees
D) Information regarding the amount of money that the payments professional could save the merchant |
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Definition
| A) A billing plan that does not place business-rate cards in the non-qualified tier |
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Term
56) How should a merchant react if a check that is over the approved check amount needs to be accepted?
A) Accept the check, manually deposit it at the customer's bank, and then notify the processor of deposit.
B) Accept the check, manually deposit it at the merchant's bank, and then notify the processor of deposit.
C) Contact the check processor/merchant processor, and provide information about the transaction and the check amount needed to complete the sale.
D) Contact the processor or payments professional, and request a new merchant application for an increased check limit. |
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Definition
| C) Contact the check processor/merchant processor, and provide information about the transaction and the check amount needed to complete the sale. |
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Term
57) In addition to interchange fees, what transaction-related costs can a merchant most likely expect to pay when accepting credit and debit cards?
A) Acquiring costs
B) Assessment fees
C) Gateway fees
D) Terminal fees |
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Definition
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Term
58) Which of following could result if a merchant's chargebacks are out of compliance?
A) A reserve being required, higher discount fees, and law enforcement intervention
B) Calls from card brands, letters from the card issuing bank, and visits from government authorities
C) Higher chargeback fees, an account review, and possible termination
D) Letters from the card issuing bank, cardholder complaints, and bank closing the merchant’s checking account |
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Definition
| C) Higher chargeback fees, an account review, and possible termination |
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Term
59) How can a payments professional protect merchants from higher transaction fees due to AVS mismatches?
A) Advise the merchant to discontinue card-not-present transactions.
B) Educate the merchant on the need to input correct address data.
C) Reprogram the merchant’s devices to turn off AVS data prompts.
D) Suggest the merchant raise merchandise pricing to compensate for higher transaction fees. |
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Definition
| B) Educate the merchant on the need to input correct address data. |
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Term
60) A parts manufacturer with a tiered-pricing setup (two buckets) keys a Visa Business credit card transaction that qualifies for Visa's business-to-business interchange qualification. What rate will the merchant pay on this transaction?
A) Commercial electronic
B) Mid-qualified
C) Non-qualified
D) Visa Business B2B |
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Definition
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Term
61) How can a payments professional BEST stay current with price changes and card brand updates and mandates?
A) Ask merchants what they know regarding recent changes within the industry.
B) Remain active on social media websites to receive industry updates.
C) Research the merchant industry on the Internet.
D) Self-educate by reading approved industry publications, websites, and materials. |
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Definition
| D) Self-educate by reading approved industry publications, websites, and materials. |
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Term
62) In a blended pricing plan known as "bill back," a merchant has a target rate of CPS Retail and accepts Reward I transactions. In what category will the merchant get billed?
A) Difference in interchange
B) Difference in interchange plus surcharge
C) Mid-qualified
D) Non-qualified |
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Definition
| A) Difference in interchange |
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Term
63) Which of the following materials would be MOST beneficial for the payments professional to take to an INITIAL face-to-face meeting with a prospective merchant?
A) Business card, lease documents, and merchant terms and conditions
B) Business card, required paperwork, product descriptions, and supporting sales materials
C) Merchant paperwork and PCI compliant materials required to be reviewed with the merchant
D) Merchant paperwork with merchant’s rights and responsibilities and site inspection information worksheet |
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Definition
| B) Business card, required paperwork, product descriptions, and supporting sales materials |
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Term
64) Which of the following merchant requests is a strong indicator that the merchant is considering transitioning to another processor?
A) Asking about additional products/services the company provides
B) Asking about the financial health and future prospects of the company
C) Asking for a copy of the merchant agreement or requesting a rate review
D) Asking the payments professional for a personal visit |
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Definition
| C) Asking for a copy of the merchant agreement or requesting a rate review |
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Term
65) Which is a reason for a merchant to add mobile payments to existing payment options?
A) To allow for reduced interchange rates
B) To expand in-store payment options
C) To increase customer spending
D) To reduce merchant funding times |
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Definition
| B) To expand in-store payment options |
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Term
CHB - 1. Which of the following are included in the file build parameters for a merchant?
A. Credit cards accepted, type of processing equipment, and any special conditions.
B. Monthly volumes, average ticket per transaction, and hours of operation.
C. Personal guarantee, network, and driver’s license.
D. Three months of merchant statements, auto-batch, and a competitive processing quote. |
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Definition
| A. Credit cards accepted, type of processing equipment, and any special conditions. |
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Term
CHB - 2. When a merchant processes a mail order/telephone order or e-commerce transaction, what action
should be implemented to combat fraud?
A. Contact the cardholder’s processing provider and ask for validation of transaction, and then force the transaction through the machine with the approval code provided.
B. Fax the purchase receipt printed at the terminal to the cardholder and have him/her approve, sign, and fax the information back to the merchant. Deliver the products to the address provided by the cardholder.
C. Obtain a signed authorization from the cardholder stating that he/she permits the transaction. Process the transaction normally and deliver to address listed by cardholder.
D. Obtain authorization form with cardholder information, address, and security code verification completed at terminal level and deliver the product to the same matching address with a shipping company who provides tracking and proof of delivery. |
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Definition
| D. Obtain authorization form with cardholder information, address, and security code verification completed at terminal level and deliver the product to the same matching address with a shipping company who provides tracking and proof of delivery. |
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Term
CHB - 3. How many requirements are included in the data security standard for PCI compliance?
A. 4
B. 8
C. 10
D. 12 |
|
Definition
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|
Term
CHB - 4. Merchant A contacts its sales agent because the merchant received a dispute letter from the acquiring bank and wants clarification. How should the payments professional advise the merchant to proceed?
A. Ask the merchant what occurred and provide possible scenarios for dispute reversal.
B. Call the cardholder’s issuing bank and demand a reversal.
C. Call the customer and local authorities to file a claim of theft by dispute.
D. Call the processor/acquirer listed on the letter and ask for further information. |
|
Definition
| D. Call the processor/acquirer listed on the letter and ask for further information. |
|
|
Term
CHB - 5. How does a payments professional determine the optimal product solution for a merchant?
A. Ask the merchant which products would be preferred.
B. Identify the merchant’s needs and offer compatible products.
C. Look at the merchant’s current processing equipment and reprogram.
D. Offer the merchant the most lucrative product line. |
|
Definition
| B. Identify the merchant’s needs and offer compatible products. |
|
|
Term
CHB - 6. In a blended pricing solution (three tiers, enhanced bill-back), a merchant batches out transactions once a week. Into which of the following categories do these transactions fall?
A. Mid-qualified
B. Non-qualified
C. Pass-through
D. Qualified |
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Definition
|
|
Term
CHB - 7. A banking institution is set up to process cash advances. The institution would like to run the cash advances as keyed/manual transactions. The payments professional should explain that manually entered cash advances:
A. are less likely to be disputed than swiped sales.
B. are more likely to be disputed than swiped sales.
C. are prohibited by the card brands.
D. cost more money than swiped sales. |
|
Definition
| C. are prohibited by the card brands. |
|
|
Term
CHB - 8. What types of questions should the payments professional ask during the information gathering phase to better qualify and or understand a merchant’s payment needs?
A. Ask the merchant about current payment services offered, business type, demographics, client base, pain points and overall inefficiencies.
B. Ask the merchant for credit card statements and begin to calculate the savings the merchant would receive if switching providers.
C. Ask the merchant what type of equipment they have and offer a low cost or free terminal option.
D. Interview the merchant’s employees to determine which services would allow them to better perform their jobs. |
|
Definition
| A. Ask the merchant about current payment services offered, business type, demographics, client base, pain points and overall inefficiencies. |
|
|
Term
CHB - 9. What is the BEST way to ensure a fast approval process for a new merchant application?
A. Check with the underwriting department on pre-approval procedures before submitting the application.
B. Check with the underwriting department on the application status to determine what information is required.
C. Submit a completed application including required information and supporting documentation.
D. Submit the application immediately and send supporting documentation when it becomes available. |
|
Definition
| C. Submit a completed application including required information and supporting documentation. |
|
|
Term
CHB - 10. A retail merchant has been contacted via email by a cardholder in Nigeria. The merchant contacts the payments professional for advice before accepting the sale. The payments professional should advise the merchant to:
A. accept the transaction and contact the cardholder for confirmation.
B. accept the transaction and ship the purchased materials via COD.
C. accept the transaction, as more volume benefits everyone.
D. delay the transaction and contact the processor’s risk department immediately. |
|
Definition
| D. delay the transaction and contact the processor’s risk department immediately. |
|
|
Term
CHB - 11. An established merchant that processes $25,000 in bank card transactions per month has no marketing budget, but has been offered a sponsorship opportunity. What product / solution should the payments professional recommend?
A. Bank loan
B. Gift cards
C. Merchant funding
D. POS software |
|
Definition
|
|
Term
CHB - 12. What is the BEST way to calculate a merchant’s effective rate?
A. Determine by the qualified rate.
B. Average the current rates.
C. Divide the total fees billed by the total monthly processing volume.
D. Divide the total monthly processing volume by the total fees. |
|
Definition
| C. Divide the total fees billed by the total monthly processing volume. |
|
|
Term
|
Definition
|
|
Term
| 1. Which of the following is a standard method to group prospective leads? a. Square footage of business b. Number of items for sale on their website c. Geographic location d. Political affiliation |
|
Definition
|
|
Term
| 2. Which of the following is the LEAST effective method of developing a list of prospects? a. Research the industry b. Talk to local influencers c. Consider the product set of their business d. Cold call on initial prospects of interest |
|
Definition
| d. Cold call on initial prospects of interest |
|
|
Term
| 3. Which of the following is NOT a part of the consultative sales approach? a. Aggressive telephone calls b. Active listening c. Understanding closing techniques d. Effective closing strategies |
|
Definition
| a. Aggressive telephone calls |
|
|
Term
4. In addition to features and advantages, traditional product
positioning includes which of the following?
a. Cost
b. Units deployed
c. Benefits
d. Competition |
|
Definition
|
|
Term
5. When first meeting a prospect, which of these activities
might a sales professional engage in to ease tension?
a. Purchasing their product
b. Presenting the proposal
c. Open ended questions
d. Closed ended questions |
|
Definition
|
|
Term
6. Active listening is best supported by which of the following
activities when on a sales call?
a. Follow up questions
b. Advancing the sale
c. Problem resolution
d. Objection handling |
|
Definition
|
|
Term
7. Which of the following is the most appropriate response
when a merchant objects to a particular solution being offered?
a. Stop and listen
b. Immediately offer another solution
c. Lower the price
d. Quickly explain the benefits |
|
Definition
|
|
Term
8. Excellent sales people best prepare for objections by doing
which of the following?
a. Offering your best price first
b. Anticipating objections prior to the call
c. Continually closing
d. Moving the conversation or presentation faster |
|
Definition
| b. Anticipating objections prior to the call |
|
|
Term
9. Which of the following is the largest negotiation element in
any sales call?
a. Price
b. Value
c. Service
d. Length of term |
|
Definition
|
|
Term
10. Which of the following is the BEST method of selling value
over price?
a. The return on investment of the product or service beingsold to the customer
b. The detailed plan for implementation of the product or
services being sold to the customer
c. The price being paid by the merchant today
d. Understanding the competition’s product in place at the
customer |
|
Definition
a. The return on investment of the product or service being
sold to the customer |
|
|
Term
11. Which of the following methods is NOT appropriate for
contract execution?
a. Actual signature from the owner in ink on the application
b. An electronic signature by the owner
c. A signed letter of acceptance from the owner, on
letterhead
d. A signed and faxed application from the owner |
|
Definition
c. A signed letter of acceptance from the owner, on
letterhead |
|
|
Term
12. Which of the following is NOT part of the ongoing sales support function?
a. Timely response
b. Accurate record keeping
c. Basic technical understanding
d. Detailed technical knowledge |
|
Definition
| d. Detailed technical knowledge |
|
|
Term
13. Which of the following is NOT an accurate source for
industry knowledge?
a. V ISA, MasterCard, American Express and Discover
websites
b. Electronic Transactions Association website
c. Wikipedia
d. Federal Trade Commission website |
|
Definition
|
|
Term
14. In the United States, which organization is responsible for
creation and administration of the merchant contract?
a. The card brands
b. The acquiring bank
c. The ISO
d. The sales agent |
|
Definition
|
|
Term
15. In the United States, a merchant services contract is
between a merchant and which of the following?
a. The card brands
b. The ISO
c. The acquiring bank
d. The sales agent |
|
Definition
|
|
Term
1. What data elements are required for a merchant’s commercial card transactions to qualify for Level 1, Level 2
and Level 3 Interchange programs?
a. Account #, address and zip code
b. Item #, date and AVS Info
c. Customer #, order #, CVV #
d. Customer #, sales tax and invoice # |
|
Definition
| b. Item #, date and AVS Info |
|
|
Term
2. What types of transactions and which banks were regulated by the Durbin amendment to the Dodd-Frank Wall Street
Reform and Consumer Protection Act?
a. Swiped transactions from foreign banks
b. Corporate card transactions from issuing banks
c. Regulated debit card transactions from large issuing
banks
d. MOTO check cards from domestic banks |
|
Definition
| c. Regulated debit card transactions from large issuing banks |
|
|
Term
3. What constitutes a small ticket transaction?
a. Sales less than $25. 00
b. Internet transactions under $10.00
c. Recurring billing transactions under $50.00
d. Swiped sales under $15.00 |
|
Definition
| d. Swiped sales under $15.00 |
|
|
Term
4. What does EIRF stand for?
a. Transactions captured electronically
b. Electronic transactions captured and settled within 2
days of authorization
c. Transactions captured and settled within 29 days of
authorization
d. Transactions captured on a corporate or international
card |
|
Definition
b. Electronic transactions captured and settled within 2
days of authorization |
|
|
Term
5. What is the Interchange rate charged for transactions that
clear for EIRF?
a. 1.54%
b. 2.70%
c. 2.30%
d. 1.85% |
|
Definition
|
|
Term
6. How is a merchant’s effective rate calculated?
a. Discount rate x average ticket
b. Sum of Qualified, Mid- and Non-Qualified fees
c. Total fees divided by total sales
d. N number of transactions x transaction fee |
|
Definition
| c. Total fees divided by total sales |
|
|
Term
7. What does surcharge/ bill back mean on a merchant’s statement?
a. Mid and Non-Qualified fees
b. Total sales
c. Monthly processing fee
d. Discount rate |
|
Definition
| a. Mid and Non-Qualified fees |
|
|
Term
8. On a merchant statement, how would you determine if the
merchant is being billed on Interchange Plus, tiered pricing
or a bundled rate program?
a. Look at the discount rates section
b. Add up all transaction fees
c. Calculate non-qualified fees
d. Look at all monthly fees |
|
Definition
| a. Look at the discount rates section |
|
|
Term
9. How can a merchant’s charge per authorization be
determined when the amount appearing on the statement
is the total for all authorizations?
a. Add up all the fees and divide by sales volume
b. Total sales divided by average ticket
c. Authorization fees divided by number of transactions for each card type
d. Discount fees divided by average ticket |
|
Definition
| c. Authorization fees divided by number of transactions for each card type |
|
|
Term
10. How would a $79 annual fee get converted into basis
points (bps), for a merchant that processes $10,000 a month
in sales volume?
a. Divide 79 by 10,000 x 12
b. Divide 79 by 12 and divide by monthly sales
c. Multiply 79 by 12 months, then divide by 10,000
d. Multiply 79 by the discount rate |
|
Definition
| b. Divide 79 by 12 and divide by monthly sales |
|
|
Term
11. Which of the following is a benefit to pricing a merchant on
an Interchange Plus program verses a tiered rate program?
a. Full cost disclosure
b. More detailed volume reporting
c. Mid and Non-Qualified fees are detailed
d. Flat rate for all fees |
|
Definition
|
|
Term
12. What is tiered pricing?
a. Processing fees charged at different volume tiers
b. Interchange rates grouped into major categories for
simpler pricing
c. Swiped, non-swiped and debit fee totals
d. Processing fees charged by card type |
|
Definition
b. Interchange rates grouped into major categories for
simpler pricing |
|
|
Term
13. Which one of the following would use a Micros terminal?
a. An e-commerce merchant
b. A wireless merchant
c. An international merchant
d. A restaurant merchant |
|
Definition
|
|
Term
14. What is host capture?
a. Authorized transactions are captured on approval and
settled on processors system
b. The definition for an Internet gateway used by
e-commerce merchants
c. How ATM debit and EBT transactions are processed
d. Terminal stores approved transaction in batch for
settlement at day’s end |
|
Definition
a. Authorized transactions are captured on approval and
settled on processors system |
|
|
Term
15. What is terminal capture?
a. POS device authorizes each card type and sends
approval to merchant
b. Transaction approved by processor then captured in
memory in terminal for batch settlement
c. Terminal is downloaded for all merchant processing
parameters
d. POS transaction is swiped and authorized electronically |
|
Definition
b. Transaction approved by processor then captured in
memory in terminal for batch settlement |
|
|
Term
16. What is a gateway?
a. Software needed to connect POS devices and peripherals
together
b. The connection between the host processor and terminal
at the merchant site
c. A web-based virtual terminal that connects to major processors for browser based and e-commerce transactions
d. Name for merchant’s front end processing platform |
|
Definition
| c. A web-based virtual terminal that connects to major processors for browser based and e-commerce transactions |
|
|
Term
17. What purpose does a gateway serve for a merchant?
a. To process transactions originating from a website or
shopping cart
b. To use a POS terminal over the Internet or WIFI network
c. To connect to a new processor network and control
fraud
d. To convert from a dialup to an internet based terminal |
|
Definition
a. To process transactions originating from a website or
shopping cart |
|
|
Term
1. What type of agreement makes an entity liable for the entity’s own obligations and signifies that the lender can lay
claim to the borrower’s assets in case of default?
a. Merchant agreement
b. Personal guarantee agreement
c. Sales partner agreement
d. Acquirer agreement |
|
Definition
| b. Personal guarantee agreement |
|
|
Term
2. What is the correct term for a number used to identify the
merchant during processing of daily transactions, rejects,
adjustments, chargebacks, and end-of-month processing
fees?
a. Terminal Identification Number
b. Automated Clearing House Number
c. Merchant Identification Number
d. Demand Deposit Account Number |
|
Definition
| c. Merchant Identification Number |
|
|
Term
3. What is the most efficient way for a merchant to process
other than via a phone line?
a. A laptop
b. IP or ethernet processing
c. Fax
d. V voice authorization |
|
Definition
| b. IP or ethernet processing |
|
|
Term
4. What is the best method to communicate with a merchant?
a. Text
b. Facebook
c. Leave a note on their account
d. Email |
|
Definition
|
|
Term
5. Which one of the following relationships is NOT important
to the success of retaining a merchant account?
a. Customer service
b. Mail carrier
c. Risk management
d. Technical support |
|
Definition
|
|
Term
6. Which of the following is NOT an important component of a
merchant processing statement?
a. Header information
b. Deposit summary
c. Surcharges
d. Tips on how to save money |
|
Definition
| d. Tips on how to save money |
|
|
Term
7. Which of the following methods of processing uses a secure
web server that provides an interface for merchant websites
and shopping carts that require real-time transaction
processing?
a. Mobile solutions
b. Landline terminal
c. Wireless terminal
d. Internet solutions |
|
Definition
|
|
Term
8. Which of the following peripheral devices reads pocket-sized
cards with embedded integrated circuits that can
process and store data, and communicate with a terminal
via radio waves?
a. Landline terminal
b. Pin pad
c. Contactless reader
d. Check reader |
|
Definition
|
|
Term
9. What term best describes the accumulation of captured
credit card transactions in the merchant’s terminal or POS
system awaiting settlement?
a. Batch
b. Credit
c. Deposit
d. Processing |
|
Definition
|
|
Term
10. Which entity typically initiates a chargeback?
a. Acquirer
b. Card issuer
c. Card holder
d. Merchant bank |
|
Definition
|
|
Term
1. What type of questions should you ask a merchant to have
them provide a detailed explanation of their business
objectives and needs for credit/debit card processing?
a. What payment types and ancillary services are needed?
b. What advertisers do you use?
c. How do you price your products?
d. How many student employees do you have? |
|
Definition
| a. What payment types and ancillary services are needed? |
|
|
Term
2. What is the one ‘key’ question to ask, when considering the
impact of a potential payments solution for a merchant that
has 90% face-to-face transactions, and 10% MOTO transactions
with one stand-alone dial terminal currently in place?
a. Do you have in-house IT staff available?
b. Do you accept checks as a form of payment?
c. How many face-to-face credit card transactions do you
process per hour?
d. What percentage of credit card transactions are taken
over the telephone versus taken via email? |
|
Definition
c. How many face-to-face credit card transactions do you
process per hour? |
|
|
Term
3. Which of the following is part of the process for training/
educating a merchant on the use of a terminal?
a. Test the terminal and provide merchant with technical
support number (usually an 800 number)
b. Read the terminal user guide to the merchant
c. Include a DIY (do it yourself ) guide in the box with the
terminal
d. Provide the merchant with the terminal manufacturer
phone number |
|
Definition
| b. Read the terminal user guide to the merchant |
|
|
Term
4. What is the first step that leads into the discussion of
payment mechanisms, ancillary solutions required by the
merchant, and any additional data exchange as part of the
payment process or apart from the payment process?
a. Gift card processing, including support for an existing
gift card program
b. Determine merchant need or desire to accept primary
payment brands
c. Need for purchasing card support, including level 2 or
level 3 data
d. Check verification, guarantee, or Check 21 |
|
Definition
b. Determine merchant need or desire to accept primary
payment brands |
|
|
Term
5. What does “No Line” mean when displayed on the POS
device?
a. No lines will print on the receipt
b. No waiting in line
c. No dial tone detected
d. No power |
|
Definition
|
|
Term
6. A chip card performs which of the following functions?
a. Encrypts the magnetic stripe for transmission over the
telecom lines
b. Encrypts the magnetic stripe prior to passing it into the
terminal
c. Utilizes an algorithm to send to the issuer instead of
track data
d. Utilizes an algorithm to encrypt data off of the magnetic
stripe |
|
Definition
c. Utilizes an algorithm to send to the issuer instead of
track data |
|
|
Term
7. End-to-End encryption is best described as:
a. Card data encrypted within the magnetic stripe reader
environment and remaining encrypted all the way to the
processor’s host or card brand
b. Card data encrypted in the terminal by software, just
prior to passing the card data onto the network to the
gateway
c. Card data encrypted within the magnetic stripe reader
and within the keypad (for key entered transactions) and
remaining encrypted all the way to the processor’s host
or card brand
d. A mandate by the card brands that all equipment and
processors must support |
|
Definition
c. Card data encrypted within the magnetic stripe reader
and within the keypad (for key entered transactions) and
remaining encrypted all the way to the processor’s host
or card brand |
|
|
Term
8. Tokenization is best described as:
a. Encrypting card data for recurring billing purposes
b. Providing a merchant or system with a value that corresponds to card data for use in transaction processing
c. Providing a user with encrypted card data for use in
transaction processing
d. Something that the merchant does with their database
prior to sending to the card issuers |
|
Definition
| b. Providing a merchant or system with a value that corresponds to card data for use in transaction processing |
|
|
Term
8. Tokenization is best described as:
a. Encrypting card data for recurring billing purposes
b. Providing a merchant or system with a value that corresponds to card data for use in transaction processing
c. Providing a user with encrypted card data for use in
transaction processing
d. Something that the merchant does with their database
prior to sending to the card issuers |
|
Definition
| b. Providing a merchant or system with a value that corresponds to card data for use in transaction processing |
|
|
Term
9. How many tracks of data are encoded on a standard credit card?
a. 1
b. 2
c. 3
d. 4 |
|
Definition
|
|
Term
10. Which of the following is applicable to a gateway provider?
a. They always connect directly to the card brands
b. They connect to the payments processors
c. They are not regulated by the card brands
d. They must support all card types and brands |
|
Definition
| d. They must support all card types and brands |
|
|
Term
1. Which of the following merchant types would be placed
under Allowed? (Some merchant types could fit under more
than one category)
a. Adult content
b. “Knock off” goods
c. Lingerie sales
d. Gambling |
|
Definition
|
|
Term
2. Which of the following merchant types would be placed under
Restricted or Prohibited? (Some merchant types could
fit under more than one category)
a. Makeup sales
b. Tobacco
c. Neutraceuticals
d. Pawn shop sales |
|
Definition
|
|
Term
3. According to the MasterCard and Visa rules, which of the
following types of merchants would be considered in the
high risk category?
a. Online legal prescription drugs
b. Drug stores and pharmacies
c. Drugs, drug proprietaries, and druggist sundries
d. Illegal prescription drugs |
|
Definition
| a. Online legal prescription drugs |
|
|
Term
4. What is the purpose of AVS?
a. To assist in the verification of the cardholder both on and
offline
b. To guarantee the transaction
c. A decline code
d. To verify the mag stripe |
|
Definition
a. To assist in the verification of the cardholder both on and
offline |
|
|
Term
8. Which of the following IS NOT a card present best practice?
a. Swipe the card
b. Ignore the card expiration date
c. Check authorization response
d. Obtain a signature |
|
Definition
| b. Ignore the card expiration date |
|
|
Term
9. Which of the following IS NOT a card present warning sign?
a. Purchases for groceries and standard household items
b. Cardholders making large ticket purchases
c. Purchases at unusual hours
d. Purchases of large quantities of items |
|
Definition
| a. Purchases for groceries and standard household items |
|
|
Term
10. Which of the following is NOT a warning sign of
e-commerce (Card Not Present) fraud?
a. Orders on multiple credit cards
b. Shipping to an international address
c. Multiple transactions on one card over a short period of
time
d. Repeat customer with good history |
|
Definition
| d. Repeat customer with good history |
|
|
Term
11. Which of the following is NOT a merchant initiated type of
payment card fraud?
a. Bust out
b. Collusion
c. Shipping goods when CVV doesn’t match
d. Factoring |
|
Definition
| c. Shipping goods when CVV doesn’t match |
|
|
Term
12. Which of the following is NOT a trigger that will place a
merchant on a Card Brand Chargeback Monitoring Program?
a. Chargeback rates less than 1%
b. Number of chargebacks is equal to the number of sales
in one day
c. Chargeback rates greater than 1%
d. Chargeback is 50% greater than average ticket |
|
Definition
| a. Chargeback rates less than 1% |
|
|
Term
1. Credit card track data stored on a hard disk drive is
considered:
a. In-flight
b. Out of scope
c. At-rest
d. Encrypted |
|
Definition
|
|
Term
2. An auditor can accept all of the following forms of evidence
to prove compliance EXCEPT:
a. Employee’s word
b. Configuration files
c. Official company policies
d. Screenshots |
|
Definition
|
|
Term
3. PCI Compliance is mandatory for merchants accepting what
volume of credit card transactions annually?
a. Less than 1 million transactions annually
b. From 1 million to 6 million transactions annually
c. More than 6 million transactions annually
d. All merchants regardless of size must be compliant if
they accept credit cards |
|
Definition
d. All merchants regardless of size must be compliant if
they accept credit cards |
|
|
Term
4. Sarbanes Oxley applies ONLY to:
a. Companies with over 1000 employees
b. SEC registrant companies
c. Companies accepting credit or debit cards for purchases
d. Health care organizations |
|
Definition
| b. SEC registrant companies |
|
|
Term
5. In PCI DSS an SAQ is a:
a. Single Account Quota
b. Self Assessment Questionnaire
c. Security Assessment Questionnaire
d. Security Applicability Quiz |
|
Definition
| b. Self Assessment Questionnaire |
|
|
Term
6. VISA, MasterCard, American Express, Discover and JCB are
referred to as:
a. Payments processors
b. Payment card brands
c. Merchants
d. PCI SSC |
|
Definition
|
|
Term
7. PCI Compliance merchant levels are generally determined
by a merchant’s:
a. Number of employees
b. Processing amount, annually, in dollars
c. Processing transaction volume annually
d. Previous year’s merchant level |
|
Definition
| c. Processing transaction volume annually |
|
|
Term
8. Payment card security is concerned with protecting all of
the following types of data EXCEPT:
a. Primary Account Number (PAN)
b. Sensitive Authentication Data (SAD) like CVV
c. Card Track Data
d. Social Security Number |
|
Definition
| d. Social Security Number |
|
|
Term
9. An annual Self-Assessment Questionnaire, and scanning if
applicable, in lieu of an onsite audit, is acceptable for all of
the following merchant levels EXCEPT:
a. Level 1
b. Level 2
c. Level 3
d. Level 4 |
|
Definition
|
|
Term
10. In the case of a PCI-related incident the merchant is required to:
a. Follow their incident response plan
b. Immediately email the card brands
c. Print out a list of all cards that may have been compromised.
d. Call the local FBI office |
|
Definition
| a. Follow their incident response plan |
|
|
Term
| The two primary pricing methodologies employed in the industry today: |
|
Definition
Tiered pricing and cost plus (often
referred to as interchange plus) |
|
|
Term
| Information that can be used to satisfy site survey requirements (4): |
|
Definition
A business license,
fictitious business name filing (DBA), seller’s permit, and articles of incorporation or tax privilege license |
|
|
Term
|
Definition
The process of issuing approval codes for check acceptance for merchants. With Check guarantee, if
a check is returned to a merchant for any reason and they followed the proper acceptance procedures, they are automatically credited for the ‘bad’ check and collection efforts are pursued directly with the check writer. While this process is better than regular check verification, the cost is higher. |
|
|
Term
|
Definition
The process of issuing verification codes for check acceptance for merchants. With Check verification,
if a check is returned to a merchant, they are typically not reimbursed by the processor. Collection efforts will be made on behalf of the merchant at an additional cost, however there is no ‘guarantee’ of payment on uncollected items. Therefore, this service is less expensive than Check guarantee. |
|
|
Term
| 7 merchant types prohibited by VS & MC: |
|
Definition
- Illegal prescription drugs
- Illegal tobacco sales
- Deceptive marketing practices
- Counterfeit and copyright infringing merchandise
- Child pornography
- Illicit websites depicting violence and extreme sexual violence
- Bestiality
|
|
|
Term
| 7 high-risk merchants as defined by VS: |
|
Definition
- Direct Marketing – Inbound Teleservices Merchant (adult content)
- Direct Marketing – Outbound Telemarketing Merchant
- Direct Marketing – Travel-Related Arrangement Services
- Betting, including lottery Tickets, Casino gaming, Off-Track Betting and Race Tracks
- Drugs, Drug Proprietaries and Druggist Sundries
- Drug Stores and Pharmacies
|
|
|
Term
Key items to monitor against fraudulent processing:
|
|
Definition
- Average ticket
- Monthly volume
- large dollar or excessive credits
- Chargebacks
- Percentage keyed vs. swiped
- Repeat or excessive authorizations
- Merchant information changes
- Maximum ticket
|
|
|
Term
| Risks to an acquirer when signing retail merchants (4): |
|
Definition
- financial strength of the business
- future delivery
- Pin debit transactions
- data security
|
|
|
Term
Use of Verified by Visa or MasterCard Secure Code to authenticate the user at the time of the transaction
shifts the liability for most disputes directly to the _____. |
|
Definition
|
|
Term
| Excessive Chargeback Merchant (ECM): |
|
Definition
If, in each of two consecutive calendar months, the merchant exceeds the predetermined rations. This designation is maintained until the merchant is below the predetermined ratio for a set
period of time. |
|
|
Term
| Excessive Chargeback Program (ECP): |
|
Definition
Sets the rules that all acquiring banks must comply within their efforts to monitor the chargeback performance of their merchants and to determine when a merchant has exceeded or is likely to exceed
monthly chargeback thresholds. |
|
|
Term
| Merchant Chargeback Monitoring Program (MCMP): |
|
Definition
| Monitors chargeback levels for all processing banks and merchants on a monthly basis. |
|
|
Term
| While compliance regulations are a good place to start with regard to securing payment channels, they are generally considered ______ ______. |
|
Definition
|
|
Term
| Transaction volume per year of PCI Level 1: |
|
Definition
| 6 million VS/MC transactions, or any merchant the card brands deem a Level 1. |
|
|
Term
| Transaction volume per year of PCI Level 2: |
|
Definition
| 1-6 million VS/MC transactions |
|
|
Term
| Transaction volume per year of PCI Level 3: |
|
Definition
| 20k - 1 million VS/MC transactions |
|
|
Term
| Transaction volume per year of PCI Level 4: |
|
Definition
| less than 20k VS/MC transactions |
|
|
Term
| PCI self-assessment questionnaire is not required for level _ merchants |
|
Definition
|
|
Term
| PCI network vulnerability scans are required _ times/year |
|
Definition
|
|
Term
| PCI on-site assessments are only required for level _ merchants |
|
Definition
|
|
Term
| PCI SAQ A is used in the merchant processing environment of: |
|
Definition
| Card-not-present (e-commerce or mail/telephone-order) merchants, with all cardholder data functions outsourced to a third party service provider |
|
|
Term
| PCI SAQ B is used in the merchant processing environment of: |
|
Definition
| Imprint-only merchants with no electronic cardholder data storage, or standalone, dial out terminal merchants with no electronic cardholder data storage. |
|
|
Term
| PCI SAQ C-VT is used in the merchant processing environment of: |
|
Definition
| Merchants using only web-based virtual terminals, with no electronic cardholder data storage. |
|
|
Term
| PCI SAQ C is used in the merchant processing environment of: |
|
Definition
| Merchants with payment application systems connected to the Internet, and no electronic cardholder data storage – SCAN Required. |
|
|
Term
| PCI SAQ D is used in the merchant processing environment of: |
|
Definition
| All other merchants not included in descriptions for SAQ types A through C – SCAN Required. |
|
|
Term
| Track 1 encoding includes: |
|
Definition
| PAN, Name, Exp Date, CVV-CVC |
|
|
Term
| Track 2 encoding includes: |
|
Definition
|
|
Term
| Track 3 encoding includes: |
|
Definition
PAN, Exp Date, Service Code, Currency Code, discretionary
data |
|
|
Term
| Common downgrade reasons (6): |
|
Definition
-Key entered face-to-face Visa transaction and AVS is not attempted
-Rewards Card (Visa or MasterCard)
-Authoriza&on does not match settlement
amount when using Visa Check Card (Exception with certain MCC Codes - 20% variance
-Merchant does not batch out the terminal each day
-Business Card, Corporate, Purchasing Card, World Elite
transac&on
-MCC Code errors |
|
|
Term
What is the hardest objection for a sales professional to overcome?
- Price
- Contract Term
- The objections you never hear
- objections you dont know the answer to
|
|
Definition
| The objections you never hear |
|
|
Term
This entity recieves the interchange:
- Merchant
- Bank
- Acquirer
- Network or Association
|
|
Definition
|
|
Term
The following best describes a retrieval request
- The preliminary request for transaction clarification prompted by the card holder from the issuer.
- A Step within the chargeback process.
- When a disputed transacation is resolved and funds are deposited in the consumers account.
- The action the card issuer forwards to the Acquirer.
|
|
Definition
| The preliminary request for transaction clarification prompted by the card holder from the issuer. |
|
|
Term
Which of the following is part of the process for training/educating a merchant on the use of a terminal?
|
A. Test the terminal and provide merchant with technical support number ( usually 800 number)
B. Read the terminal user guide to the merchant
C. Include a DIY guide in the box with the terminal
D. Provide the merchant with the terminal manufacturer number.
|
|
|
Definition
| Read the terminal user guide to the merchant |
|
|
Term
This number is required for a merchant to accept EBT transactions;
|
|
Definition
|
|
Term
|
What is host capture?
A. Authorized transactions are captured on approval and settled on processors system
B. The definition for an internet gateway used by e-commerce merchants
C. How ATM debit and EBT transactions are processed
D. terminal stores approved transaction in batch for settlement at days end
|
|
|
Definition
| Authorized transactions are captured on approval and settled on processors system |
|
|
Term
In the United States, which organization is responsible for creation and administration of the merchant contract?
A. The card brands
B. The acquiring bank
C. The ISO
D. The sales agent |
|
Definition
|
|
Term
What type of agreement makes an entity liable for the entity's own obligations and signifies that the lender can lay claim to the borrower's assets in case of default?
A. Merchant Agreement
B. Personal Guarentee Agreement
C. Sales Partner Agreement
D. Acquirer Agreement. |
|
Definition
| Personal Guarentee Agreement |
|
|
Term
The following party is responsible for the chargeback if the merchant cannot produce a receipt;
-
Acquirer
-
Card Issuer
-
Card Brand
- Consumer
|
|
Definition
|
|
Term
What is the correct term for a number used to identify the merchant during processing of daily transactions, rejects, adjustments, chargebacks, and end of month processing fees?
A. Terminal Identification Number
B. Automated Clearing House Number
C. Merchant Identification Number
D. Demand Deposit Account Number |
|
Definition
| Merchant Identification Number |
|
|
Term
What is the most efficient way for a merchant to process other than via a phone line?
A. A laptop
B. Ip Or ethernet
C. Fax
D. Voice Authorization |
|
Definition
|
|
Term
What ultimately determines pricing for a merchant’s credit card transaction?
a. Batch timeliness
b. Card brand (Visa/MC/Discover)
c. Card swiped or key-entered?
d. All of the above |
|
Definition
|
|
Term
What is the role of the back end processor?
|
|
Definition
|
|
Term
When a merchant processes a mail order/telephone order or e-commerce transaction, what action should be implemented to combat fraud?
A. Contact the cardholder’s processing provider and ask for validation of transaction, and then force the transaction through the machine with the approval code provided.
B. Fax the purchase receipt printed at the terminal to the cardholder and have him/her approve, sign, and fax the information back to the merchant. Deliver the products to the address provided by the cardholder.
C. Obtain a signed authorization from the cardholder stating that he/she permits the transaction. Process the transaction normally and deliver to address listed by cardholder.
D. Obtain authorization form with cardholder information, address, and security code verification completed at terminal level and deliver the product to the same matching address with a shipping company who provides tracking and proof of delivery |
|
Definition
| D. Obtain authorization form with cardholder information, address, and security code verification completed at terminal level and deliver the product to the same matching address with a shipping company who provides tracking and proof of delivery |
|
|
Term
Which of the following are the standard types of merchant accounts?
A. Retail, Moto, Internet gambling
B. Retail, Moto, Ecommerce
C. Retail, Restaurant, MOTO, Supermarket, Lodging
D. None of the above |
|
Definition
C. Retail, Restaurant, MOTO, Supermarket, Lodging |
|
|
Term
What is the check guarentee conversion limit allowed by NACHA?
|
|
Definition
|
|
Term
Which of the following peripheral devices would be the best to sell your merchant with a terminal?
A. Check Reader
B. Pin Pad
C. Laptop
D. Mobile Device |
|
Definition
|
|
Term
Which of the following are the most typical months to have updates in the interchange rates?
-
April and September
-
May and August
-
January and October
- April and October
|
|
Definition
|
|
Term
Which of the below time frames is typical for your merchant to recieve their funds from their check guarantee deposits?
A. 24 hours
B.24-48 Hours
C. 48-72 Hours
D. After 72 hours |
|
Definition
|
|
Term
How many requirements are included in the data security standard for PCI compliance?
A. 4
B. 8
C. 10
D. 12 |
|
Definition
|
|
Term
Which of the folllowing peripheral devices reads pocket-sized cards with embedded integrated curcuits that can process and store data, and communicate with terminal via radio waves?
A. Landline Terminal
B. Pin Pad
C. Contactless Reader
D. Check reader |
|
Definition
|
|
Term
What types of questions should the payments professional ask during the information gathering phase to better qualify and or understand a merchant’s payment needs?
A. Ask the merchant about current payment services offered, business type,demographics, client base, pain points and overall inefficiencies.
B. Ask the merchant for credit card statements and begin to calculate the savings the merchant would receive if switching providers.
C. Ask the merchant what type of equipment they have and offer a low cost or free terminal option.
D. Interview the merchant’s employees to determine which services would allow them to better perform their jobs. |
|
Definition
| A. Ask the merchant about current payment services offered, business type,demographics, client base, pain points and overall inefficiencies. |
|
|
Term
The following party sets the interchange rates;
-
Card issuers
-
Networks or Associations
-
Merchants
- Aquirer
|
|
Definition
|
|
Term
A merchant has never accepted credit cards before and will be operating a retail bricks and morter location. The best solution for them would be;
A. Virtual terminal
B. A POS terminal with a Pin Pad
C. Dial Pay
D. An imprinter |
|
Definition
B. A POS terminal with a Pin Pad |
|
|
Term
Which entity typically intiates a chargeback?
A. Acquirer
B. Card Issuer
C. Card Holder
D. Merchant Bank |
|
Definition
|
|
Term
The best known card brands are;
A. Vantiv and First Data
B. Capital One, Chase, and Bank of America
C. Visa, masterCard, AmEx, and Discover
D. ISO's |
|
Definition
| C. Visa, masterCard, AmEx, and Discover |
|
|
Term
One of your merchants calls you and lets you know that are not going to fill out their annual SAQ because they are using dial pay. The BEST action would be to;
A. Agree with them and let them know they dont have to fill this out.
B. Call the police
C. Let them know that they still must comply and fill out the survey because they accept cards regardless of the fact they use dial pay.
D. tell them to contact the Risk department |
|
Definition
C. Let them know that they still must comply and fill out the survey because they accept cards regardless of the fact they use dial pay. |
|
|
Term
What factors will contribute to helping a Payments Professional to determine what the optimal product solution will be?
a. Years in business
b. Products or services they are selling
c. How cards are accepted (face-to-face, MOTO), number of transactions, ability to pass level 2 or 3 data
d. Number of employees |
|
Definition
c. How cards are accepted (face-to-face, MOTO), number of transactions, ability to pass level 2 or 3 data |
|
|
Term
A merchant contacts its sales rep because the merchant received a Chargeback notification letter from their Processor and wants clarification and direction. How should the a payments professional advise the merchant to proceed?
a. Ignore the letter but contact the consumer directly and attempt to work it out w/ the consumer directly
b. Call the Card Issuer and demand a reversal
c. File a claim w/ the local Small Claims Court
d. Call the processor/acquirer listed on the letter and ask for further information |
|
Definition
| d. Call the processor/acquirer listed on the letter and ask for further information |
|
|
Term
A merchant mentions he wants to run credit card transactions under a false or another business name to avoid showing income for a particular business. A payment professional should?
a. Thank the merchant for their time and report the merchant to the Security Department at the corporate office
b. Go ahead and sign the agreement and board it as usual
c. Explain to the customer that this is illegal and call the police from the appointment |
|
Definition
a. Thank the merchant for their time and report the merchant to the Security Department at the corporate office |
|
|
Term
Domain 6 - 12. Which one below is not PII?
a. Social Security Number
b. Driver’s License Number
c. Home Address
d. Latitude and Longitude |
|
Definition
| d. Latitude and Longitude |
|
|
Term
Domain 5 - 9. Which of the following is a trigger that will place a merchant on a Card Brand Chargeback Monitoring Program?
a. Chargeback rates less than 1%
b. Number of chargebacks is equal to the number of sales in one day
c. Chargeback rates greater than 1.5%
d. Chargeback is 50% greater than average ticket |
|
Definition
| c. Chargeback rates greater than 1.5% |
|
|
Term
Domain 5 - 10. Which of the following represents a balanced portfolio?
a. A portfolio that does not cause losses
b. A portfolio that is not reliant on any one segment or a small set of merchants.
c. A portfolio that is approved by the acquirer
d. A shared BIN portfolio |
|
Definition
| b. A portfolio that is not reliant on any one segment or a small set of merchants. |
|
|
Term
Domain 5 - 11. Which regulatory agency is NOT currently a factor in
acquiring?
a. DOJ
b. FTC
c. OSHA
d. CFPB |
|
Definition
|
|
Term
Domain 5 - 12. In which situation below is the merchant liable?
a. Mag stripe only card swiped at the point of sale cardholder
claims fraud.
b. Chip card dipped in the terminal and the cardholder claims fraud.
c. Chip card not dipped and it is counterfeit fraud.
d. Visa chip card swiped and not dipped cardholder claims lost or stolen. |
|
Definition
| c. Chip card not dipped and it is counterfeit fraud. |
|
|
Term
Domain 5 - 13. Merchants with chargeback problems tend to be:
a. Ok because there is a fee earned by the provider for each chargeback
b. Ok if reserves are in place to cover them
c. Ok as long as the merchant is educated about the chargeback process
d. Exhaustive of resources and causes additional exposure for acquirers |
|
Definition
| d. Exhaustive of resources and causes additional exposure for acquirers |
|
|
Term
Domain 5 - 14. In a CNP environment the following is-NOT a protective
measure for the merchant:
a. Engage the services of a third party threat validation
company to validate identities.
b. Obtain a signed authorization form in place of nonmatching
AVS.
c. Display a click to agree with e-mail confirmation for
online exchange and return policies.
d. Enable delivery confirmation of shipped goods. |
|
Definition
b. Obtain a signed authorization form in place of nonmatching
AVS. |
|
|
Term
Domain 5 - 15. Future delivery of goods and services provided by a
merchant:
a. Allows merchants to obtain funds up front to purchase
product.
b. Only matters when the merchant goes out of business.
c. Only matters if the merchant is CNP.
d. Extends the chargeback period. |
|
Definition
| d. Extends the chargeback period. |
|
|
Term
Domain 5 - 16. What data elements won’t be able to help you ascertain the risk balance of a portfolio?
a. MCC concentrations
b. % of registered high risk
c. CNP ratio to CP
d. Terminal type |
|
Definition
|
|
Term
Domain 5 - 17. Which answer is not true: Repeat or excessive auths could be a sign of:
a. Technical issues
b. Customer confusion/excitement
c. Auth testing
d. A sale |
|
Definition
|
|
Term
Domain 5 - 18. When is it permissible to change the MCC
a. When the merchants primary line of business changes
b. When changing it will enable more authorizations to clear
c. After the merchant complains about down grades
d. To evade registration requirements |
|
Definition
| a. When the merchants primary line of business changes |
|
|
Term
Domain 5 - 19. How soon after you get notified about a problematic
chargeback merchant should you close the account and open up a new one?
a. 15 days
b. 20 days
c. Immediately
d. Never |
|
Definition
|
|
Term
Domain 5 - 20. When a merchant is facing challenges with chargebacks should you:
a. Increase their reserves to cover your potential fine
exposure
b. Increase their monthly volume to offset the disputes
c. Help the merchant open multiple accounts to load
balance
d. Launch a fact finding mission and tailor an education
campaign based on learnings |
|
Definition
d. Launch a fact finding mission and tailor an education
campaign based on learnings |
|
|
Term
5. The definition of MATCH is:
a. A voluntary system for assessing a merchant’s potential risk
b. A mandatory system for assessing a merchant’s potential volume
c. A mandatory system for assessing a merchant’s potential risk
d. A voluntary system for assessing a merchant’s potential volume |
|
Definition
| c. A mandatory system for assessing a merchant’s potential risk |
|
|
Term
| 6. Which of the following is another name for MATCH? a. Transaction merchant file b. Too much fraud file c. Terminated merchant file d. Terminal merchant file |
|
Definition
| c. Terminated merchant file |
|
|
Term
|
Definition
| A type of credit card fraud where an individual applies for a credit card, establishes a normal usage pattern and solid repayment history, then racks up numerous charges and maxes out the card with no intention of paying the bill. |
|
|
Term
| What are 3 type of Laundering scam? |
|
Definition
1) Money Laundering
2) Transaction Laundering
3) Job Finder Site |
|
|
Term
| What are 3 type of Collusive scams? |
|
Definition
1) Manufacturing Spending
2) Intentional Over billing
3) Force/Offline Sale |
|
|
Term
|
Definition
| UDAAP are misleading or harmful behaviors by those who offer financial products or services to consumers. Unfair, deceptive, or abusive acts and practices (UDAAP), as defined by the Dodd-Frank Act of 2010, are illegal. |
|
|
Term
| What is EMV abuse and fraud? |
|
Definition
1) Vending and Restaurants
2) Petro Card Brands
3) College Student Rings |
|
|
Term
| A good reserve policy should have what 2 things? |
|
Definition
1) Well documented
2) Protect against credit & financial risk |
|
|
Term
| What should a good Merchant Change Policy have? |
|
Definition
1) DBA, Ownership, Business Type, MCC
2) DDA
3) Descriptors, URLs
4) Phone numbers and addresses
5) QC process in place
6) Risk triggers |
|
|
Term
| Which Merchants require Enhanced Due Diligence? |
|
Definition
1) payday lending
2) Debt collection
3) money making opportunities
4) Fundraising
5) Future Delivery
6) Cyberlockers
7) Attorneys |
|
|
Term
| What are some Enhanced Website Review techniques? |
|
Definition
1) Check the website registration
2) Check the IP information
3) Check similar looking websites
4) understand the traffic
5) Check webpage hidden elemenets
6) Check that the functionality is real |
|
|
Term
|
Definition
Definition - What does Cyberlocker mean?
A cyberlocker is a third-party online service that provides file-storing and file-sharing services for various types of media files and data.
Cyberlockers are online data hosting services that provide remote storage space within a secure storage architecture. They can be accessed globally over the Internet. |
|
|
Term
A Day in the Life of a Transaction
Stage 1: Authorization |
|
Definition
|
|
Term
A Day in the Life of a Transaction
Stage 2: Authentication |
|
Definition
|
|
Term
A Day in the Life of a Transaction
Stage 3: Clearing and Settlement |
|
Definition
|
|
Term
A Day in the Life of a Transaction
Stage 4: Dispute |
|
Definition
|
|
Term
| The Credit Card Network don't the following... |
|
Definition
- Issue Cards
- Set credit limits, card fees or interest rates
- Acquire merchant contracts
- Set merchant pricing |
|
|
Term
|
Definition
- is a regulated financial institution
- pays V/MC/D dues and assessments
- pays interchange rates to issuing bank
- hold primarily liability
- extends credit and/or accepts deposits
- risk must not exceed asset size
- offers ISO/MSP sponsorship
- has a contract with the merchant
- May also be a processor |
|
|
Term
What does EMV stand for...
What is EMV used for.. |
|
Definition
EMV stands for Europay, MasterCard and Visa
EMV cards have a microprocessor chip to make it harder to steal account information. |
|
|
Term
| What the 4 different ISOs levels |
|
Definition
Level 1 - Full liability ISO
Level 2 - Shared / No Liability
Level 3 - Unregistered Organization
Level 4 - Merchant Level Saleperson |
|
|
Term
|
Definition
| Tiered pricing simplifies a huge number of processing rates into three basic tiers: qualified, mid-qualified, and non-qualified. |
|
|
Term
| what is Interchange-plus pricing? |
|
Definition
| Interchange-plus pricing works by adding a constant, flat margin on top of Interchange. So typically, Interchange-plus pricing models will also be written in the two component format, with a percentage fee and per-transaction fee above Interchange. This allows merchant service providers to price their accounts fairly, because merchants who process at higher volumes will pay more fees, but only proportionately so. |
|
|
Term
| What is the basic cost formula? |
|
Definition
Interchange
+ Dues & Assessments
+ Authorization, Capture, Settlement
+ Processor Fees
================
= Cost |
|
|
Term
|
Definition
| Apple Pay is a mobile payment and digital wallet service by Apple Inc. that lets users make payments using an iPhone, Apple Watch, iPad or Mac. |
|
|
Term
|
Definition
| Samsung Pay is a mobile payment and digital wallet service by Samsung Electronics that lets users make payments using compatible phones and other Samsung-produced devices. |
|
|
Term
|
Definition
| Android Pay is a digital wallet platform developed by Google to power in-app and tap-to-pay purchases on mobile devices, enabling users to make payments with Android phones, tablets or watches. |
|
|
Term
| What is a merchant aggregator? |
|
Definition
| A merchant aggregator, payment aggregator, or simply aggregator is a service provider that allows merchants to accept payments without having to set up a merchant account. |
|
|
Term
| What is a payments facilitator? |
|
Definition
A payments facilitator (or PayFac) allows anyone who wants to offer merchant services on a sub-merchant platform. Those sub-merchants then no longer have to get their own MID and can instead be boarded under the master MID of the PayFac who is sponsored by a bank.
This allows merchant services to be offered in a very elegant and very efficient manner. The PayFac does not have to underwrite all merchants upfront — they are instead, underwriting the merchants essentially as they continue to process transactions for them on an ongoing basis. |
|
|
Term
| Limits of a payments facilitator |
|
Definition
1) All PayFacs must report quarterly.
2) High risk PF's report monthly
3) Increased transitions requirements |
|
|
Term
| Security is driving technology needs |
|
Definition
- Encryption (P2PE)
- EMV Incentives
- Tokenization (Issurer and Acquirer)
- PCI
- Cyber security
- Mobile Payments |
|
|
Term
|
Definition
A PIN-debit transaction, also known as an online transaction, is a password-protected payment method that authorizes a transfer of funds over an electronic funds transfer (EFT).
When processed as an online transaction, the exchange of funds is completed using an EFT network, such as Star, Pulse or Interlink, depending on which EFT system your bank is associated with as a member bank. The cost of the transaction typically amounts to an interchange fee of 1% of the total purchase price, which is charged to the vendor/merchant. |
|
|
Term
| Security - Methods used in Payment Industry |
|
Definition
- Cardholder Validation Method
- Transaction Message, Mutual Authentication
- POS application "lock down"
- Secure Transportation/Storage of Data
- Receipt masking of all relevant data
- PNI entry, 3DES encrytption
- EMV offline/online PIN use |
|
|
Term
| What type of transaction security is used in the payment industry? |
|
Definition
- triple d e s
- Encryption device
- SSL
- PCI
- PCI-DSS
- PA-DSS
- encryption
- tokeization |
|
|
Term
| Encryption & tokenization- best practice |
|
Definition
Step 1: payment card is read than Merchants device
Step 2: primary account number other data are encrypted
Step 3: data is decrypted by a decryption service and a token is generated by the RSA server
Step 4: payment information is passed to the bank for authorization
Step 5: transaction authorization is given to the processor
Step 6: transaction authorization and token a return to the merchant
Step 7: Merchant and safely store the token and reuse for post-authorization activities such as returns |
|
|
Term
|
Definition
EMV is a fraud-reducing technology that can help protect issuers, merchants and consumers against losses from the use of counterfeit and lost or stolen payment cards at the point-of-sale.
- Global Standard for chip cards to facilitate electronic payment transaction
– Born out of transit payment programs in Europe
– Protects against duplicate card fraud |
|
|
Term
|
Definition
- Owns, manages, and maintains the global payment industry specifications to define interoperability requirements between chip based payment cards and acceptance terminals
- Administers the testing and approval process for both chip payment cards and chip acceptance terminals
- EMVCo is not responsible for specific card brand certifications |
|
|
Term
| What are the benfits of EMV? |
|
Definition
1) EMV allows more secure card-present transactions
2) EMV supports contact, contactless, and mobile transaction types
3) EMV is a global standard
4) EMV payment brands offer PCI relief for compliant merchants
5) EMV systems can operate in offline mode |
|
|
Term
| what is contactless payment? |
|
Definition
| Contactless payment is a secure method for consumers to purchase products or services via debit, credit or smartcards (also known as chip cards), by using RFID technology or near-field communication (NFC). |
|
|
Term
| How does EMV contactless differ from EMV contact? |
|
Definition
EMV Contact
- Inserted in the chip card reader
- Data is read from and written to the chip during the transaction
EMC Contactless
The EMV Contactless Specifications refer to transactions using proximity NFC payment devices. These devices allow transactions to be made by waving or tapping on an EMV Contactless enabled terminal. Similar to contact chip cards, they also support cryptographic functions for more secure transactions than with traditional magnetic-stripe cards. |
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Term
| What is the difference between NFC and contactless? |
|
Definition
Contactless refers to a range of technologies using RF (Radio Frequency) to communicate between a terminal and another device (often a card).
NFC (Near Field Communications) is a set of specifications published by the NFC forum, based on ISO14443 and ISO 18092 which also work at 13.56MHz but with the particularity of using the technology both ways round. So integrated into a phone NFC can be used to make the phone behave like a contactless card (called card emulation) or as a card reader. By extension many people refer to cards and terminals that can do one half (using ISO14443) as NFC Cards or NFC Readers. |
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Term
| what are the emv challenges? |
|
Definition
1) industry adoption
2) customer impacts
3) Solution time to market
4) Training and support
5) Card requirements change |
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Term
|
Definition
| A charge removed from a customers statement. |
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Term
|
Definition
| The issuer requests a receipt of the transaction |
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Term
| For the Acquirer...what is the job of Underwriting? |
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Definition
1) Underwriting serves to mitigate potenteial risk
2) Ensure applications are complete and accurate
3) Read the underwriting criteria and policies and enclose the documentation required when submitting applications |
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Term
| For the Acquirer...what is Merchant monitoring? |
|
Definition
1) deposit monitoring
---- Anticipated average ticket amount
2) Card Holder signtrure monitoring
---- Anticipated card present transations
3) Increased transtions volume
---- Anticipated / average transaction volume
4) Excessive Credits
---- Fruad Schemes
5) Repeat authorizations
---- stolen card
6) Chargebacks |
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Term
| What is the Chargeback monitoring program? |
|
Definition
100+ transactions per month
100+ Chargebacks per month
A 1% ratio chargeback two transactions
Three or more Merchants per acquirer in monitoring program for six consecutive months, audit may oocur |
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Term
| What is the Visa Risk Identification Service? |
|
Definition
ratio of suspect activity or fraud Activity to sales
Number of total value of suspect activity, fraud activity and other risk |
|
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Term
| what are retrieval requests? |
|
Definition
Request for copy of sales draft
Request for information for all transaction formation |
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Term
| What is the retrieval process? |
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Definition
- Issuer receives dispute
- Send a request to acquire
- Acquirer: automatic confirmation of retrieval request
- Acquirer gathers information and sends back to issuer = fulfillment
- Acquirer has one chance to respond |
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Term
| What can make a Chargeback occur? |
|
Definition
Customer disputes
Fraud and fraud investigations
Authorization issues
Processing Issues
Non fulfilment of retrieval request |
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Term
| 6 basic categories of a chargeback |
|
Definition
Canceled or returned
Not receiving goods or services
Fraud codes
Authorization error
Processing error
Not receiving information |
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Term
| What are substantive chargebacks? |
|
Definition
Card holder challenge
canceled or returned items
Cardholder initiates and writing (date of charge; why the charge) |
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Term
| What are procedural chargebacks? |
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Definition
| a system or information problem with the transaction |
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Term
| What is called when the Acquirer receives the charge back? |
|
Definition
|
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Term
| What is called when the Acquirer sends information back to the Issuer? |
|
Definition
|
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Term
| What is the process for Chargeback arbitration? |
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Definition
- Acquiring must initiate the appeal for arbitration for a MasterCard arbitration transaction
- Issuer must initiate the appeal for arbitration for a Visa transaction
- Prospective payment card brand will determine if they require or the issue or is responsible for the transaction
- Filing or reviewing fees assessed to the losing party
- Penalties or fines may also be assessed if I card brands
- Others May assess processing fees |
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Term
| What can Merchants do to protect themselves? |
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Definition
Retain a copy of the sales receipt
Return shipping logs
Retain invoices and documentation
Maintain a filing system by transaction date |
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|
Term
| When was the PCI security standard Council formed? |
|
Definition
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|
Term
| What data must be protected under PCI DSS? |
|
Definition
These data elements can be stored after authorization
Primary account numbers if unreadable
Cardholder name
Expiration date
These data elements cannot be stored after authorization
Full magnetic strip data
Card validation code or card validation value
Pin or pin block |
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Term
| What issues can occur as a result of non-compliance with PCI? |
|
Definition
- Breach of data systems
- Identity theft
- Potential lawsuits
- Increase Financial expense
- Financial penalties
- Negative media attention
- Reputational risk or Revenue laws |
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Term
|
Definition
| The Payment Card Industry Data Security Standard is an information security standard for organizations that handle branded credit cards from the major card schemes. |
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Term
| What does the PCI DSS require? |
|
Definition
Regularly Monitor and test networks
Build and maintain a secure network
Protection of cardholder data
Maintain information security policy
Maintain a vulnerability Management program
Implement strong Access Control measures |
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|
Term
| What does PCI DSS require of Acquirers? |
|
Definition
Responsible for ensuring compliance for their Merchants, service providers, and their Merchants service providers
Responsible for liability as a result of non-compliance
Must include a CISP compliance provision in all Merchant contracts and non-member agents
May disclose Visa transaction information only two service providers approved by Visa
Fine may be up to $500,000 per incident |
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Term
| What are the PCI DSS Merchant level? |
|
Definition
Level 1: processing over 6 million transactions annually
Level 2: processing between 1 million and 6 million transactions annually
Level 3: 20000 to 1 million transactions annually
Level 4: e-commerce processing less than 20000 annually |
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Term
| What is the pa-dss impact to acquirers? |
|
Definition
| Acquirers are responsible for ensuring that Merchants and service providers confirm the security of their payment applications using the payment applications data security standards |
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Term
| What is Payment applications data security standards? |
|
Definition
The goal: human applications must not retain the full magnetic strip data or cvv2 data and must support a merchants and service providers ability to comply with the PCI
The scope: the pa-dss applies to software vendors who develop payment applications that store, process, or transmit cardholder data as part of the authorization or settlement |
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Term
| What is the pa-dss impact to software vendors? |
|
Definition
Software vendors should validate their payment applications against recommendations outlined in PA DSS
Must provide implementation guide |
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Term
| What is PA-DSS inpact to MLS/ISO's? |
|
Definition
Mandated in Acquirers contracts
Review service providers or vendors
Must audit Merchants
Should review the list of compliance service providers |
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Term
|
Definition
In credit card processing, interchange is the money transferred from the acquiring bank to the issuing bank for each bankcard transaction for its role in the transaction process
Through the card Brands the acquirer is paid and then the MLS or ISO involve Downstream is paid |
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Term
|
Definition
#1 member Bank authorized to process by various card Brands
#2 submit transactions Into The Interchange system on behalf of the merchant either themselves or through a processor
#3 holds first responsibility for the merchants |
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Term
| What is the settlement processor? |
|
Definition
#1 has access into the card Brands systems
#2 provides for merchant statements
#3 May perform activities |
|
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Term
|
Definition
#1: sales organization
#2: register with the brands and acquirers to submit Merchant applications on behalf of the acquirer for payments card processing accounts
#3: May provide service to merchants
#4: Sells and leases transaction processing terminals or systems to merchants
#5: Must be sponsored by a financial institutions or agent bank that is a member of the card brand |
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|
Term
| What is a merchant level sales (MLS)? |
|
Definition
#1: feet on the street sales agents
#2: solicits Merchant applications
#3: trying to sell processing services
#4: contracted to work with ISO or MSP
#5: Work for up front commissions |
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Term
|
Definition
#1 Member bank providing cardholder an account
#2 Enters direct relationship with the cardholder |
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Term
| What is the role of the card brands? |
|
Definition
#1: establish a interchange rate and card acceptance fees
#2: the flow of payment between issuing Banks and acquiring Banks
#3: establish rules to support transaction |
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Term
|
Definition
#1: charge by acquirer to the merchant
#2: typically include processing fees cost and markup |
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Term
| What are interchange fees? |
|
Definition
#1: paid by Acquirer to Issuer for processing
#2: is one component of a merchant discount rate |
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|
Term
| What is the Visa qualification hierarchy? |
|
Definition
(Lowest to highest)
CPS retail debit
CPS retail credit
Rewards
CPS retail
Commercial electronic
EIRF
Standard |
|
|
Term
| What is the MasterCard qualification hierarchy? |
|
Definition
(Lowest to highest)
Merit 3 debit
Merit 3 credit
World card enhanced
Key entry
Merit 1
Corporate data
standard |
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Term
| What are common credit card downgrade reasons? |
|
Definition
#1: entered face-to-face Visa transaction and AVS is not attempted
#2: Rewards card whether Visa or Mastercard
#3: Authorization does not match settlement amount when using Visa check card
#4: Merchant does not batch out the terminal each day
#5: Corporate card, purchasing Card, World Elite transaction
#6: MCC code errors |
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|
Term
|
Definition
agent banks are affiliated with full member banks which perform the requirements of issuing and or acquiring
An agent bank is a financial institution with partial membership in visa and or MasterCard |
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|
Term
|
Definition
1-a point-of-sale terminal that interfaces with the processor for transaction processing
2-an integrated PC like system
3-Mobile card readers
4-a virtual terminal
5-a wireless handheld device |
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|
Term
|
Definition
1-connectivity too many processors in many in points
2-Common messaging format for easy communication
3-allows Merchants to change processors without difficulty
4-Value added products and services |
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Term
| What is a payment facilitator or aggregator? |
|
Definition
1- Primary Merchant of record with the card Brands
2- Sponsored and under written by an acquirer
3- Responsible for all fines or losses
4- Provide services and under rights sub merchants
5- Payment facilitator may or may not operate a gateway
6- advantages include quicker Merchant underwriting, ease of obtaining a merchant account, integration with POS platforms or other value-added services
Examples of payment facilitators include: Square, PayPal, stripe, Braintree, |
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Term
| What is magstripe technology? |
|
Definition
1-magnetic Strip Card
2-encode it with three tracks
3-cards are included with security such as longitudinal redundancy character checksum using the mod 10 algorithm |
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Term
|
Definition
1-chip contains information for processing (can be contact or contactless)
2-features of the chip: Performing processing, authentication of device and card, store information
3- Authentication of Chip
4- Digitally signs payment transaction
5- risk management parameters
6- for contactless, EMV provides increased speed at POS
7-multiple apps on the card
8-chip data is read
9- checks to ensure card is allowed to process
10- authentication of card
11- pin or signature verification
12- offline capabilities
13- cryptograph sent to issuer
14-response information return |
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Term
| What is an online (pin) debit? |
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Definition
1-swipe or pin processed as a debit card
2-funds withdrawn at the time of authorization
3-guaranteed funds
4-single message service |
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Term
| What is an offline (signature) debit? |
|
Definition
1-swipe or signature processed as a credit card
2- funds held at time of authorization semi: removed at settlement
3-reservred funds
4-two step process |
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Term
| What is the role and responsibilities of the card and debit card networks? |
|
Definition
1- Provide infrastructure for clearing, interchange and settlement
2- Set guidelines for acquirers risk
3- monitor for fraud
4- promote their brand
5- provide value-added services
6- develop new products and services |
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Term
| What is the role and responsibilities of the Acquirer? |
|
Definition
1- the card company Network member
2- Carries ultimate liability for ISO/MSP, MLS and merchant
3- May provide various levels of back office support
4- May also be a third-party processor
5- Third-party to Merchant contracts
6- Underwriting for ISO and Merchant
7- Regulated financial institution |
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Term
|
Definition
1- connects Merchant to issuers and back
-front end gets authorization from issuer
-back end gets money from issuer and pays the merchant
2- Clears and settles the transactions into interchange
3- Both provide various levels of back office and Merchant support
-Merchant statements
-helpdesk
-transaction analysis |
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Term
| What does a front-end processor do? |
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Definition
1- terminal applications
2- third-party bar certification
3- data capture
4- send files to back end processor
5- Balancing of batches
6- Technical support
7- Risk mitigation tools |
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Term
| What does a back-end processor do? |
|
Definition
1-Interfaces with front-end processors
2- clear transactions into interchange
3- Merchant ACH
4- chargeback and request for copy (RFC)
5-Merchant statements
6-risk monitoring
7-accounting |
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|
Term
| What are the seven stages of a transaction? |
|
Definition
1-authorization
2-Merchant balancing
3-capture
4-clearing
5-interchange
6-settlement
7-Merchant deposit (ACH) |
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|
Term
| What is the authorization stage? |
|
Definition
The cardholder makes a purchase with the merchant the authorization goes to the front end processor who then gets the authorization from the credit card Network who then gets the authorization from the issuer and the result comes back to the merchant
In short... the card is verified in real time for authenticity and funds are reserved for future settlement. |
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Term
| What is the merchant balancing stage? |
|
Definition
Option 1:
-transactions are stored at the merchant location
-Merchant totals transactions by card type
-Merchant initiates a transmission to the front end processor
Option 2:
-hosted system
-transactions are stored at the front-end processor
-front-end processor automatically performs host capture |
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Term
| What is the capture stage? |
|
Definition
Front-end processor:
1- Accept batch file from the merchant for submission to the settlement processor (performs Audits and validation)
2- sort files by acquiring BIN and transmits Card Capture files to back end processors for clearing and settlement (along with captured files, includes authorization details) |
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Term
| What is the clearing stage? |
|
Definition
Back in processor:
1- Performs compliance checks, data Integrity Audits and interchange calculations
2- Provides risk management tools and generates risk reports for used by acquirer, ISO/MSP, or in some instances, May perform risk management on behalf of these organizations
3- Formats the ACH deposit
4- Submits the files to card brand networks for processing to issuers |
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Term
| What is The Interchange stage (VS/MC/DS)? |
|
Definition
- interchange = files from credit card company to issuer to update credit holders account
- card company networks have picked up files from back in processor
- files are reviewed for issues, for example invalid issuing BIN /error in calculation
- approved files are sorted by acquirer and then BIN
- card brand networks stage the file for the issuer to pick up |
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Term
| What is the settlement stage? |
|
Definition
1) calculate fees and deductions (i.E. chargebacks) and then the issuer and a choir are paid
2) Settlement is between the card Brands, the issuers and the acquirers
3) determine the Daily net position of the merchant
= Sales minus
-interchange
-chargebacks
-miscellaneous adjustments
-fees and fines
4) In effect, clearing and settlement debits the issue were and credits the acquirer for the day's cleared and settled transactions
In short...When batches are sent out and the funds that were reserved during authorization are withdrawn from the cardholder's account and transferred to the merchant's account. |
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Term
| What is the merchant deposit (ACH) stage? |
|
Definition
Back end processor:
1) Major networks transfer Merchants deposit to the acquirer
2) independent networks May pay the merchant directly |
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Term
| What is the day in the life of a transaction-the short version? |
|
Definition
1) The cardholder presents the card to the merchant for payment
2) the merchant obtains authorization for sale
3) the merchant settles the batch to the processor
4) the acquirer submits the sale to the card company
5) the card brand interchanges the sale and debits the issuer and credits the acquirer
6) issuer bills the card holder
7) acquire pays the merchant |
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Term
| What are the responsibilities of the processing platform? |
|
Definition
1) Transaction-based company
2) provides connectivity for authorization, clearing and settlement
3) provides various levels of back office support
4) must be sponsored by an acquirer
5) must be registered
6) establishes certification requirements for POS and servicing |
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Term
| What are the responsibilities of the processing platform- Front-end processor? |
|
Definition
1) terminal and POS interfaces
2) authorization
3) data capture
4) address verification services
5) Merchant end-of-day batching
6) host or terminal capture
7) customer service
8) technical support 24 by 7 |
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Term
| What are the responsibilities of the processing platform-Back-end processor? |
|
Definition
1) multiple interfaces with back-end
2) uses acquirers bin for identification
3) submits transactions for interchange
4) create Merchant deposit
5) Merchant billing and statements
6) interchange accounting |
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|
Term
| What is the liability chain for EMV? |
|
Definition
1) magnetic stripe card + magnetic stripe terminal = issuer liability
2) magnetic stripe card + chip terminal = issuer liability
3) chip card + magnetic stripe terminal = merchant liability
4) chip card + chip terminal = issuer liability |
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|
Term
| What are the categories of ISOs? |
|
Definition
Tier 1 (Full liability ISO)
-sophisticated technology requirements
- high level of operational success
- in-house and underwriting
Tier 2 (Shared/No liability)
- large sales organizations
- growing capacity
- limited operational experience
Tier 3 (unregistered organizations)
- typically sales organizations
- no in-house support capability
Tier 4 (Merchant level salesperson)
- independent contractor
- the feet on the street |
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|
Term
| Industry nomenclature - an Application Fee is also called? |
|
Definition
- activation fee
- account setup fee
- conversion fee
- installation fee
- programming fee
- sign up fee |
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|
Term
| Industry nomenclature - a Discount Rate is also called? |
|
Definition
- qualified rate
- bundled or flat rate
- interchange Plus
- interchange adjustment
- pass-through
- rate Bill back |
|
|
Term
| Industry nomenclature - a Statement Fee is also called? |
|
Definition
- Customer Service Fee
- Maintenance Fee
- Monthly Service Fee
- Bank Fee
- Account Fee
- Other Fee |
|
|
Term
| Industry nomenclature - a Transaction Fee is also called? |
|
Definition
- Item rate
- Authorization fee
- 950 fee
- Capture/Settlement Fee
- Batch/Header Fee
- Wats Fee
- Local Auth Fee |
|
|
Term
| How do you convert a percentage to basis points? |
|
Definition
Move the decimal two places to the left.
1.50% = 0.0150 bps |
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|
Term
| How to convert per item fee to basis points & percentage? |
|
Definition
$X.XX divided by the average ticket = bps or %
$0.05 / $60 = 0.00083 bps or 0.083% |
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|
Term
| What is a fixed or flat rate plan? |
|
Definition
| flat pricing is a mix of rates and fees that, together, create one fixed rate regardless of card type or transaction method. Flat pricing is unregulated and often increases processing costs, especially for debit card transactions, as you can see above. |
|
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Term
| what is tiered pricing plan? |
|
Definition
| This rate plan bundles transactions into three different tiers (Qualified, Mid-Qualified and Non-Qualified) based on certain criteria. Ultimately, the tier a transaction falls into depends on the level of risk or reward associated with the card. The higher the risk or reward, the higher the cost. This plan isn’t necessarily bad because it’s simple to understand. |
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|
Term
| What is a pass through pricing plan? |
|
Definition
| Interchange pass through pricing is a form of credit card processing pricing that allows the actual cost of processing (interchange fees & assessments) to be passed directly to your business. The benefits of interchange pass through (often called interchange plus) are transparency and lower costs when compared to bundled or tiered pricing models. |
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|
Term
| What is Interchange Plus pricing? |
|
Definition
| The pricing model consists of two elements: an “interchange” and a “plus.” The interchange is the percentage of the transaction that must be paid to both the issuing bank and the credit card association. Because your processor has to pay this charge, they’ll pass it on to you. The plus is the amount over and above the interchange costs that you’ll also have to pay to your processor. It’s their markup for processing your transaction, and it’s designed to cover their costs of doing business – and also to generate a profit. |
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Term
| What is Enhanced Billback pricing? |
|
Definition
| What is Enhanced Billback? Enhanced Billback, also known as “Billback,” “Enhanced Recover Reduced,” or “Blended” pricing, is a pricing structure that charges merchants an initial flat rate on each transaction and then bills the remaining downgrade fees at a later date, usually on the next month’s statement. Enhanced billback is often criticized for unnecessarily obscuring the true transaction fees that a merchant pays, enabling sales reps to quote a simple but inaccurate “flat rate” to merchants upon signup. |
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|
Term
|
Definition
| With bundled pricing a processor pays interchange fees to banks and assessment fees to card brands on behalf of a business. The processor then charges the business based on its own set of qualified, mid-qualified and non-qualified rates. |
|
|
Term
| What is the basic cost formula? |
|
Definition
Interchange
+ Dues & Assessments
+ Authorizations, Capture, Settlement
+ Processor Fees
= Cost |
|
|
Term
| What is the merchant effective rate? |
|
Definition
Total Fee / Total Processing Volume = Effective Rate
For example....
$2989 / 89,874 = 0.0332576 bps = 3.32% |
|
|
Term
| what is the CPS Small ticket credit? |
|
Definition
| CPS Small Ticket is the Visa interchange category that is used to calculate the interchange cost for card-present transactions of $15 or less. It is not necessary to obtain the cardholder’s signature. |
|
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Term
|
Definition
| CPS Retail is the Visa interchange category that is used to calculate the interchange fee for card-present transactions when a traditional consumer credit card (instead of rewards, business or government cards) is used and the customer's signature is obtained. |
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|
Term
|
Definition
| EIRF is a Visa interchange category that indicates a downgrade. Transactions qualify for EIRF when they don't meet the criteria for categories with lower rates. For example, a transaction that is keyed-in to a terminal without address verification information instead of being swiped may fall into the EIRF category. Call your processor if you see a lot of EIRF transactions on your statement because it's a good indication that something is not being processed correctly. |
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