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ETA CPP Exam Study Guide Questions with Complete Answers
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ETA CPP Exam Study Guide Questionswith Complete Answers
Wireless terminal - ANSWER-provides the ideal solution for businesses seeking the
most effective way to complete credit card transactions off-site. Most wireless credit
card terminals support credit and debit transactions and are equipped with an
internal PIN pad. Wireless terminals can be used on the countertop or in a mobile
environment.
Sale - ANSWER-for a sale, swipe the customer card or manually enter the credit
card number, input sale amount, then press enter. The terminal will then transmit
information through the network for approval, and a merchant receipt will be printed.
Mobile solution - ANSWER-allows a merchant to accept credit cards using a cell
phone with or without a card swipe mechanism.
Internet solution - ANSWER-a processing method using a secure web server that
provides an interface for merchant websites and shopping carts that require real-time
transaction processing. Depending on the merchant's software they can connect to a
frontend via either an SSL server or payment gateway to get a real-time credit card
authorization.
PIN pad - ANSWER-an electronic device used in a debit or smart card-based
transaction to input and encrypt the cardholder's PIN (personal identification
number). The PIN pad is required so that the customer's card can be accessed and
the PIN can be securely entered and encrypted before it is sent to the transaction
manager of the switch or the bank.
Check reader - ANSWER-a payment automation device that reads the MICR
(Magnetic Ink Character Recognition) information on checks.
Contactless reader - ANSWER-any pocket-sized card with embedded integrated
circuits that can process and store data and communicate with a terminal via radio
waves.
Void Last Sale - ANSWER-to void the last sale, press the screen button next to void,
choose last, verify transaction information on the display screen, then press enter.
The transaction will be voided and a receipt showing the void will be printed.
Credit / refund - ANSWER-to credit a refund, press the screen button next to refund,
swipe the customer card, input return amount, press enter, and print merchant
receipt.
Header Information - ANSWER-merchant's business information
Deposit Information - ANSWER-daily account of the month's transaction information
Deposit Item Summary - ANSWER-a summary of the month's transactions
,Settlement/Discount - ANSWER-the month's transactions sorted by card type and
fees associated
Surcharges - ANSWER-downgraded transactions
EBT - ANSWER-electronic acceptance of government benefits (e.g., food stamps
and/or cash). These cards are generally accepted at grocery stores.
Debit - ANSWER-an ATM bankcard, also known as a check card, that allows a
merchant to deduct money directly from a consumer's bank account. The use of a
true debit card requires the cardholder to enter a PIN to complete the transaction.
Gift card/loyalty programs - ANSWER-a magnetic-stripe or smart (chip) card that
replaces traditional paper gift certificates. The program is based on gift card usage
that generates points in exchange for products and services.
Split Funding - ANSWER-A merchant may receive a capital advance from a third
party and direct the processor to repay the third party with a % of their daily
credit/debit card processing deposited into the third party's bank account and the
remainder deposited into the merchants bank account.
Checks - ANSWER-a negotiable paper document drawn against deposited funds
exchanged with a merchant for payment of products or services.
Check Guarantee - ANSWER-this is 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.
Check Verification - ANSWER-this is the process of issuing verification codes for
check acceptance for merchants. With Check Verifica- tion, 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.
Check 21 - ANSWER-this is the process of capturing a check at the point of entry
(can be point of sale scanner or a picture on a mobile phone). The check image is
transmitted to the issuer and paid through the settlement process.
ACH Debit - ANSWER-this is the process whereby the consumer gives a pre-
approval to have funds debited from either their checking or savings account. This is
not a real-time transaction and can be subject to non-sufficient funds rejection.
cardholder - ANSWER-an end user or consumercard issuer is any banking institution
that provides credit or debit cards to a consumer. Examples of card issuers include
Chase, Capital One, Bank of America and credit unions.
,acquiring bank (or acquirer) - ANSWER-the bank or financial institution that
processes credit and/or debit card payments for a mer- chant. Examples of acquirers
include HSBC and Wells Fargo.
payments processor - ANSWER-a company (often a third party) appointed by a
merchant to handle payment card transactions for acquiring banks. There are two
types of processors: front-end and back-end. Front-end processors have
connections to various card issuers and supply authorization and capture services to
the acquiring banks' merchants. Back-end processors accept settle- ments from
front-end processors and, via The Federal Reserve Bank, move the money from the
issuing bank to the merchant bank. Examples of payments processors include
Global Payments, First Data, Chase Paymentech, TSYS, and Elavon.
merchant - ANSWER-any business that accepts credit or debit cards for payment in
exchange for goods or services. Examples include Amazon, Target and Best Buy.
card brand - ANSWER-a network of issuing banks and acquiring banks that
processes brand-specific payments. The best known card brands are Visa,
MasterCard, American Express, Discover, JCB and China UnionPay.
Independent Sales Organization (ISO) - ANSWER-an organization or individual
registered with a card brand (Visa or MasterCard), and has a payment card
relationship with an acquirer or issuer to perform functions on behalf of the acquirer
or issuer (i.e., the ISO soliciting merchant accounts, arranging for terminal purchases
or leases, providing customer service, and soliciting cardholders). Examples of ISOs
include Total Merchant Services and North American Bankcard.
service provider, more commonly known as a merchant service provider (MSP) -
ANSWER-a company or organization that provides transaction processing solutions
to merchants; any sales office that offers payment services to merchants.
debit car - ANSWER-provides the cardholder electronic access to his or her bank
account(s) at a financial institution.
credit card - ANSWER-allows the cardholder to buy goods and services based on
the cardholder's promise to pay for these goods and ser- vices at a later date
Point of Sale (POS) terminal - ANSWER-a device that processes transactions with a
debit or a credit card, via a telephone line or Internet connection, typically powered
by a power cord.
wireless terminal - ANSWER-a device that processes transactions with a debit or a
credit card via a cellular (wireless) data network, typi- cally powered by battery pack.
mobile payment solution - ANSWER-consists of a device and software application
(typically a smart phone application and card reader) that process transactions with a
debit or a credit card via a cellular (wireless) data network. Examples include
Payment Jack and Square.
, virtual terminal - ANSWER-a payment gateway service provider allowing merchants
to accept credit card and electronic check pay- ments through their website over an
IP (Internet Protocol) connection.
PIN Pads / PIN Entry Devices (PEDs) - ANSWER-electronic devices used in debit or
smart card-based transactions to input and encrypt the cardholder's Personal
Identification Number (PIN)
Authorization - ANSWER-The cardholder presents the card as payment to the
merchant; merchant submits the transaction to the acquirer (acquiring bank) through
the payment processor. The acquirer verifies the credit card number, the transaction
type and the amount with the issuer (card-issuing bank) and reserves that amount of
the cardholder's credit limit for the merchant by use of an authoriza- tion code. An
authorization will generate an approval code, which follows the life of the transaction
through the processing systems.
Batching - ANSWER-Authorized transactions are stored in batches, either in the
terminal or on the processor's host, which are sent to the acquiring clearing
processor on a predetermined schedule, also know as "auto batch". If a transaction
is not submitted in the batch, the authorization will stay valid for a period of time,
determined by the issuer, after which the held amount will be returned to the
cardholder's available credit (see authorization hold). Some transactions may be
submitted in the batch without prior authorizations; these are typically seen where
the authorization was unsuccessful but the merchant still attempts to force the
transaction through. (Such may be the case when the cardholder is not present but
owes the merchant additional money, such as a hotel stay extension or car rental.)
Clearing and Settlement - ANSWER-The acquirer sends the batch transactions
through the card brand, which debits/credits (if charge- backs and returns exceed
sales for the day) the issuer for payment and credits/debits the acquirer. Essentially,
the issuer pays the acquirer for the transaction.
Funding - ANSWER-Once the acquirer has been paid, the acquirer pays the
merchant. The merchant receives the amount totaling the funds in the batch in total
or less the discount fees charged.
Chargeback - ANSWER-A chargeback is an event in which money in a merchant
account is held due to a dispute relating to the transaction. Chargebacks are initiated
by the cardholder or the issuing bank. In the event of a chargeback, the issuer
returns the transaction to the acquirer for resolution. The acquirer then forwards the
chargeback to the merchant, who must either accept the chargeback or contest it.
Maximum ticket - ANSWER-risk systems must monitor the average ticket and a
maximum ticket. Transactions above the maximum ticket may be an indicator of
misinformation during the application process, a change in the merchant product,
cardholder fraud, a bust-out scheme, or perhaps collusion and should be reviewed
and possible investigated.
Average ticket of the merchant - ANSWER-if the application shows a $30 average
ticket and you see an average ticket of $400, you should investigate to ensure they
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