Payment Systems & Technology Flashcards

Which element of an EMV chip transaction makes it specifically resistant to counterfeit card fraud?

Answer: A dynamic cryptogram generated per transaction

The EMV chip generates a unique cryptogram for each transaction using keys that cannot be cloned, making stolen chip data useless for creating counterfeit cards.

In the context of ACH risk management, what does 'Unauthorized Return Rate' measure?

Answer: Rate of entries returned with return codes R05, R07, R10, R29, or R51

NACHA's unauthorized return rate tracks consumer claims of unauthorized ACH debits (specific return codes) and ODFIs must keep this below 0.5%.

A customer initiates a $500 wire transfer through online banking. The bank's system flags it for additional review because the beneficiary country is on the FATF grey list. This is an example of:

Answer: Transaction monitoring with geopolitical risk controls

Transaction monitoring systems apply risk rules based on counterparty country risk, flagging transfers to FATF-listed jurisdictions for enhanced scrutiny.

Which 3-D Secure version introduced frictionless authentication flows and risk-based authentication to reduce consumer abandonment?

Answer: 3DS 2.0 (EMV 3DS)

EMV 3DS (v2.x) allows issuers to perform risk-based authentication using rich data, enabling frictionless approval for low-risk transactions without a consumer challenge.

What distinguishes a 'push payment' from a 'pull payment' in modern payment systems?

Answer: Push payments are initiated by the payer; pull payments are initiated by the payee

In a push payment, the sender initiates and controls the transfer (e.g., Zelle, wire); in a pull payment, the payee requests funds from the payer's account (e.g., ACH debit, card charge).

Which payment rail is governed by SWIFT and primarily used for cross-border interbank fund transfers?

Answer: SWIFT GPI

SWIFT GPI (Global Payments Innovation) is SWIFT's enhanced correspondent banking service that adds speed, transparency, and end-to-end tracking to cross-border payments.

A bank notices that a newly opened business checking account has received 50 ACH credits from 50 different consumer accounts within 3 days. This pattern is most consistent with:

Answer: Money mule account collecting fraudulent ACH transfers

Rapid aggregation of small credits from many unrelated consumer accounts into a single new business account is a classic money mule pattern used in ACH fraud schemes.