Podcast
Questions and Answers
What is a common method for transferring money between different bank accounts?
What is a common method for transferring money between different bank accounts?
- Mobile payment apps
- Email transfers
- Electronic Fund Transfer (EFT) (correct)
- Direct debit
Which component is essential for ensuring data integrity and confidentiality in electronic transactions?
Which component is essential for ensuring data integrity and confidentiality in electronic transactions?
- Encryption algorithm
- Transaction history log
- Public-key infrastructure (PKI) (correct)
- Digital wallet
What security feature is commonly used to prevent fraud in credit card transactions?
What security feature is commonly used to prevent fraud in credit card transactions?
- Card verification number (CVN) (correct)
- Two-factor authentication
- Biometric signatures
- Customer service hotline
What happens when a customer initiates an EFT to a different bank?
What happens when a customer initiates an EFT to a different bank?
Which of these is a disadvantage of accepting credit cards for online payment?
Which of these is a disadvantage of accepting credit cards for online payment?
What technology is used to safeguard transactions conducted over public networks?
What technology is used to safeguard transactions conducted over public networks?
Which of the following is an emerging trend in fund transfer methods?
Which of the following is an emerging trend in fund transfer methods?
Which factor contributes to the risk of identity theft in online banking?
Which factor contributes to the risk of identity theft in online banking?
What is the main use of a debit card compared to a credit card?
What is the main use of a debit card compared to a credit card?
Which actor in the credit card system is responsible for issuing the card to the consumer?
Which actor in the credit card system is responsible for issuing the card to the consumer?
What is a key feature of smart cards that differentiates them from regular credit or debit cards?
What is a key feature of smart cards that differentiates them from regular credit or debit cards?
What defines an e-money transaction?
What defines an e-money transaction?
Why is a debit card commonly perceived as a way to control spending?
Why is a debit card commonly perceived as a way to control spending?
What is a significant disadvantage of debit cards compared to credit cards?
What is a significant disadvantage of debit cards compared to credit cards?
Which of these is an example of a smart card?
Which of these is an example of a smart card?
In an e-cash transaction, what is required from both customer and merchant?
In an e-cash transaction, what is required from both customer and merchant?
Flashcards
Credit Card Sales
Credit Card Sales
Activities leading to selling goods using a credit card.
Debit Card
Debit Card
A card linked to a bank account that deducts funds instantly.
Debit Card vs Credit Card
Debit Card vs Credit Card
Debit cards deduct funds immediately from your account, credit cards don't.
Smart Card
Smart Card
A card with a chip storing data, used for transactions and access control.
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E-Money Transactions
E-Money Transactions
Funds transferred between financial bodies over a network (no middleman).
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E-Cash
E-Cash
A type of e-money where both parties need to register with a company.
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Credit Card Payment Cycle
Credit Card Payment Cycle
The monthly period for paying credit card bills.
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Card Holder
Card Holder
The customer who possesses the credit or debit card.
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EFT (Electronic Fund Transfer)
EFT (Electronic Fund Transfer)
A popular method for transferring money between bank accounts electronically.
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ACH (Automated Clearing House)
ACH (Automated Clearing House)
A system used to transfer funds between accounts in different banks.
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Cryptocurrency (e.g., Bitcoin)
Cryptocurrency (e.g., Bitcoin)
An example of digital money, often used for transferring value.
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Public-Key Infrastructure (PKI)
Public-Key Infrastructure (PKI)
A system for verifying the identity of parties.
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Transport Layer Security (TLS)
Transport Layer Security (TLS)
A security protocol used for communication over the internet.
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Card Verification Number (CVN)
Card Verification Number (CVN)
A code used to verify a credit card.
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Credit Card Transaction Fees
Credit Card Transaction Fees
Fees paid by a merchant for accepting credit card payments.
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Payment Systems
- Sales: All activities leading to selling goods, often tied to credit card payment cycles.
Credit Card System Actors
- Card Holder: Customer
- Merchant: Seller accepting credit card payments
- Card Issuer Bank: Cardholder's bank
- Acquirer Bank: Merchant's bank
- Card Brand: Visa, Mastercard, etc.
Debit Cards
- Mechanism: Payment immediately deducted from linked bank account; requires sufficient funds.
- Benefits: Eliminates carrying cash/checks; readily accepted by merchants; spending limits.
Smart Cards
- Characteristics: Small microprocessor chip, stores work/personal information, used for transactions.
- Security: Access through personal identification number (PIN); encrypted data storage.
- Examples: Mondex, Visa Cash.
E-Money
- Mechanism: Electronic payment transfers between financial entities without intermediaries.
- Types: Online payments using credit cards, debit cards, smart cards, e-cash, and cryptocurrencies like Bitcoin.
- Convenience: Fast, convenient, and time-saving.
Electronic Fund Transfer (EFT)
- Purpose: Transferring funds between bank accounts (same or different banks).
- Methods: Automated Teller Machines (ATMs), computers, and increasingly, internet-based transfers.
- Internet EFT: Customer logs in, requests transfer, bank transfers funds (same/different bank, using ACH for transfers to other banks.)
Online Payment Security
- Authentication: Financial institutions on receiving end must obtain certificates from authorized certification authorities (CAs).
- Data Integrity & Confidentiality: Public-key infrastructure (PKI) used.
- Website Security: Customer-facing websites need careful coding to prevent credential leaks and identity theft.
- Transport Layer Security (TLS): Protects transactions over public networks.
Credit Card Security in Specific Countries
- Concerns: Countries like China and India face challenges with credit card security.
- Security Enhancements: Card verification number (CVN) – compares verification number with cardholder’s bank information.
Credit Card vs Debit Card
- Cost: Debit cards are often cheaper for merchants than credit cards due to lower transaction fees.
- Security: Similar security measures exist but cost varies.
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