Question 1

The processing of card payments has two major phases: identification and settlement.

Accepted Answer

The two major phases in the processing of card payments are authorization and settlement. Authorization involves verifying the card details and checking funds availability, while settlement is the actual transfer of funds from the buyer's to the seller's account.

Question 2

E-payment systems that require the payer to install specialized security software have proven more likely to succeed.

Accepted Answer

E-payment systems that prioritize ease of use and accessibility, typically not requiring users to install specialized security software, have shown greater success and adoption rates.

Question 3

In most cases,smart cards are more secure than credit cards and can be extended with other payment services.In the retail arena,many of these services are aimed at those establishments where payments are usually made in cash and speed and convenience are important.

Accepted Answer

Smart cards typically have stronger security features than credit cards, such as encryption and personal identification numbers. Additionally, smart cards can be programmed with multiple payment services, making them more versatile than traditional credit cards. In the retail industry, additional payment services offered on smart cards are often targeted towards establishments that traditionally deal in cash, such as fast food restaurants or convenience stores.

Question 4

The success of an e-payment method depends on its interoperability with existing enterprise systems and applications.

Accepted Answer

Interoperability with existing enterprise systems and applications is crucial for e-payment methods to be successful. This enables seamless integration and communication between different systems, allowing for efficient and secure transactions. Without interoperability, e-payment methods may face difficulties in adoption and usage.

Question 5

Because of their visibility and large sales volumes,larger firms are more susceptible to fraud than smaller firms.

Accepted Answer

Larger firms often have more resources and systems in place to detect and prevent fraud, whereas smaller firms may lack such controls, making them potentially more vulnerable to fraud.

Question 6

To succeed,special e-payment methods,such as e-cash,have to maintain anonymity.

Accepted Answer

Anonymity is important for the success of e-payment methods such as e-cash to ensure security and privacy for users.

Question 7

E-payment methods that can address the lower or higher end of the price continuum are unlikely to be widely accepted because of cost and security issues.

Accepted Answer

E-payment methods that address the lower or higher end of the price continuum can be widely accepted if they have adequate cost and security measures in place.

Question 8

Over 80 percent of all merchants use the manual review method,which relies on staff to manually review suspicious orders.

Accepted Answer

While many merchants do use manual review methods to some extent, the statement that over 80 percent of all merchants use manual review as their primary method for reviewing suspicious orders is not accurate. Many merchants also rely on automated systems and tools for fraud detection and prevention.

Question 9

With a debit card,the money for a purchased item comes directly out of the holder's checking account with the actual transfer of funds from the holder's account to the merchant's taking place within one to two days.

Accepted Answer

When a debit card is used for a purchase, the money is immediately deducted from the holder's checking account and transferred to the merchant's account in one to two days. This is because debit cards work on the basis of the amount of funds available in the holder's account, rather than on credit.

Question 10

Recent surveys by CyberSource indicate that fraudulent card transactions are a growing problem for online merchants in spite of their increasing efforts to combat fraud despite improved anti-fraud measures.

Accepted Answer

The statement indicates that fraudulent card transactions are a growing problem for online merchants despite their efforts to combat fraud, which suggests that the statement is true.

Question 11

CyberSource is a payment processing service that provides connectivity among merchants,customers,and financial networks that enable authorization and payments.

Accepted Answer

CyberSource is a payment processing service that provides connectivity among merchants, customers, and financial networks that enable authorization and payments.

Question 12

In the settlement process,the systems must determine whether a buyer's card is active and whether the cardholder has sufficient funds available for the purchase.

Accepted Answer

The answer of In the settlement process,the systems must determine...

Question 13

In the online world,merchants are not held liable for fraudulent transactions.

Accepted Answer

Merchants can be held liable for fraudulent transactions in certain circumstances, such as if they did not implement adequate security measures or if they were found to be involved in the fraud themselves. It is important for merchants to take steps to prevent fraudulent transactions and protect their customers' information.

Question 14

The barrier to selling books online,either hardcopy or electronic,is technical and not financial.

Accepted Answer

The barrier to selling books online includes both technical and financial aspects. Technical barriers involve the need for a website, e-commerce platform, and digital rights management for electronic books, while financial barriers can include costs associated with website development, maintenance, and transaction fees.

Question 15

Thirty-eight percent of all merchants use negative lists,which are files that includes a customer's information and the status of that customer.A customer's transaction is matched against this file and flagged if the customer is a known problem.

Accepted Answer

The statement is true according to the information given in the sentence.

Question 16

A number of international,federal,and state regulations govern all payment methods.

Accepted Answer

There are various regulations that govern payment methods such as anti-money laundering (AML) regulations, Know Your Customer (KYC) regulations, PCI-DSS compliance, and various consumer protection laws at the federal and state levels. International regulations such as the Financial Action Task Force (FATF) recommendations also impact payment methods.

Question 17

In the authorization process,the system determines whether a buyer's card is active and the customer has sufficient available credit line or funds.

Accepted Answer

This is the primary purpose of the authorization process in payment systems.

Question 18

Card verification number (CVN)methods are useless against a fraudster who possesses the stolen credit cards.

Accepted Answer

A fraudster who possesses stolen credit cards can easily use the CVN to complete unauthorized transactions. Therefore, the CVN method is ineffective in preventing fraud in such situations.

Question 19

For a given type of payment card and processing system,the processes and participants are essentially the same for offline (card present)and online (card not present)purchases.

Accepted Answer

The processes and participants involved in offline and online purchases are essentially the same for a given type of payment card and processing system. The primary difference is that in card present transactions, the card is physically present and swiped or inserted into a payment terminal, while in card not present transactions, the card information is manually entered or transmitted electronically.

Question 20

One problem with the Address Verification System (AVS)for fraud prevention is the number of false positives,meaning that the merchant rejects a valid order.One reason for these rejects is simply that cardholders make mistakes in inputting their addresses or zip codes.

Accepted Answer

The statement correctly identifies one problem with the Address Verification System (AVS) for fraud prevention.

Quiz 11: Electronic Commerce Payment Systems