Practice Test Geeks(CFP) Certified Fintech Practitioner Practice Test
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Digital Payments & Financial Services Flashcards

7 cards from real CFP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Digital Payments & Financial Services flashcards as text

  1. Which open banking standard is most widely mandated in the European Union for third-party payment access?

    Answer: PSD2 (Payment Services Directive 2)

    PSD2 mandates that EU banks provide open APIs allowing licensed third-party providers (TPPs) to access customer account data and initiate payments with consent.

  2. A consumer's credit card number is replaced with a unique token for online transactions. Where is the actual card number stored?

    Answer: In the payment gateway's token vault

    Tokenization replaces real card numbers with surrogate tokens; the actual PAN is stored securely in the payment gateway's or network's token vault.

  3. What is the main advantage of using ISO 20022 messaging over legacy formats like ISO 8583 for payment communications?

    Answer: Richer, structured data enabling better compliance and straight-through processing

    ISO 20022's XML/JSON structure carries far more granular data (remittance info, purpose codes), improving AML screening, reconciliation, and STP rates.

  4. Which fraud type involves criminals manipulating victims via phone or text into authorizing bank transfers to fraudster-controlled accounts?

    Answer: Authorized push payment (APP) fraud

    APP fraud occurs when a victim is socially engineered into willingly sending a payment to a fraudster, making recovery difficult since the transfer was technically authorized.

  5. A fintech operating as a money transmitter in the US must maintain what financial safeguard to protect customer funds?

    Answer: Surety bond or permissible investments equal to outstanding liabilities

    State money transmitter laws typically require licensees to hold surety bonds or liquid permissible investments sufficient to cover all outstanding customer balances.

  6. In digital lending, what does 'alternative data' refer to when used in credit underwriting?

    Answer: Non-traditional data sources like utility payments, rent history, and cash flow patterns

    Alternative data includes non-traditional sources (utility bills, rent, bank cash flow, telecom) that help assess creditworthiness of thin-file or credit-invisible consumers.

  7. Which component of 3-D Secure 2 (3DS2) most significantly improves the checkout experience compared to 3DS1?

    Answer: Risk-based authentication allowing frictionless flow for low-risk transactions

    3DS2 introduces a frictionless flow where the issuer uses risk signals to silently authenticate low-risk transactions without challenging the customer.