Virtual money and online payment
The functions of money and its forms, then online card payment: the actors, authorisation, strong authentication, clearing and settlement, fees and disputed payments.
- 30 cards
- 6 topics
- Free
The outline, topic by topic
Each topic is weighted the way the exam weighs it.
- Concepts
- Questions
- Sort and link
- The numbers
- On the diagram
- Scenarios
A few cards from the deck
Virtual currency: what is it?
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A digital unit of value without legal tender status, not issued by a bank, used within a community: video-game gold, loyalty points.
It must not be confused with electronic money: that is real money, issued by a licensed institution and redeemable at face value.
A merchant obtained authorisation for a card payment on Monday. When does the money actually move from the cardholder's bank to the merchant's bank?
- At settlement, after clearing
- At authorisation, which immediately debits the cardholder's account
- At clearing, which is the exact moment funds are transferred
- When the site sends the order confirmation to the customer
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At settlement, after clearing
Authorisation only checks and reserves the amount; clearing works out what each bank owes the others; settlement finally moves the funds. Hence the gap between the order shown and the money the merchant receives.
Money fulfils three functions: …, … and ….
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Money fulfils three functions: unit of account, medium of exchange and store of value.
An asset whose value swings sharply from one day to the next fails first as a store of value and as a unit of account: nobody sets prices in a unit that can lose a tenth of its value in a week.