ETA CPP Study Guide with Verified Answers
100% Correct| Grade A+
NABU, APF and FANF - ✔✔MasterCard implemented a new fee, the Network Access and Brand Usage
fee (NABU). And following right on the heels of the MasterCard announcement, on July 1, 2009 Visa
implemented their U.S. Acquirer Processing Fee (APF).
Card brand dues and assessments - ✔✔In addition to Interchange, each card brand includes additional
fees based on the transaction amount and per transaction. These fees are called dues and assessments
and typically range from 0.105% - 0.45% on the transaction amount [ $0.0025 - $0.04.] Like
interchange, assessments are exactly the same for all credit card processors and no processor can give
you a lower rate or a better deal on assessments.
AVS and switch fees - ✔✔The fee is charged when your business utilizes the Address Verification
Service to check that the address provided by a cardholder matches the address on file with the credit
card company.
Authorization fee - ✔✔The voice authorization fee applies when you use a telephone dial-up service for
transaction authorization. A fee is charged for each call that is made. Voice authorization is useful in the
event your terminal or software malfunctions or your internet connection isn't working.
Batch fee - ✔✔A fee that is charged when you settle your daily transactions (also known as the batch)
with your credit card processor. If you have no credit card transactions to settle on a particular day, you
are not charged this fee.
Clearing and settlement fees - ✔✔clearing denotes all activities from the time a commitment is made
for a transaction until it is settled.
Chargeback and representment fees - ✔✔In short, a chargeback is a reversal of funds transferred.
Statement or reporting fees - ✔✔Fees that are charged for receiving statements or reports.
,Rewards Cards - ✔✔A cashback reward program is an incentive program operated by credit card
companies where a percentage of the amount spent is paid back to the card holder.
Card Not Present transactions - ✔✔A card not present transaction (CNP, MO/TO, Mail Order /
Telephone Order, MOTOEC) is a payment card transaction made where the cardholder does not or
cannot physically present the card for a merchant's visual examination at the time that an order is given
and payment effected.
Quick Service Restaurants (QSR) - ✔✔a specific type of restaurant that serves fast food cuisine and has
minimal table service.
Emerging Markets - ✔✔countries in the process of rapid growth & industrialization
Level 1 Data - ✔✔Level I purchasing card data includes the same information captured during a
traditional credit card purchase transaction. This includes: total purchase amount, date, merchant
category code and supplier/retailer name.
Level 2 Data - ✔✔Level II purchasing card data includes the same information captured at Level I, plus
the following: sales tax amount, customer's accounting code, merchant's tax ID number, applicable
minority - and women-owned business status and sales outlet ZIP code.
Level 3 Data - ✔✔Level III purchasing card data includes the same information captured at Levels I and
II, plus the following: quantities, product codes, product descriptions, ship to ZIP, freight amount, duty
amount, order/ticket number, unit of measure, extended item amount, discount indicator, discount
amount, net/gross indicator, tax rate applied, tax type applied, debit or credit indicator and alternate tax
identifier.
Discount Rate (Credit/Debit) - ✔✔The discount rate is the fee paid by merchants to credit card
processors as a fee associated with accepting general-use credit cards (such as Visa, MasterCard,
American Express and Discover). Typically this fee runs between 1 percent and 3 percent, depending on
the nature of the transaction.
Daily or monthly discount - ✔✔With monthly discount, your processor deducts fees from your account
in one lump sum once a month. With daily discount, your processor charges fees daily throughout the
month as well as at the end of the month.
,Surcharge - ✔✔A charge added to the usual cost
Billback - ✔✔Billback or bill back is an accounting service and/or suite of software that is used for cost
recovery.
ERR Rates - ✔✔Enhanced Rate Recovery Pricing. As a merchant business with an ERR rate of 1.69%
for your merchant account, you will be charged 1.69% for any transaction that qualifies on The
Interchange Table at 1.69% or below.
Interchange Plus - ✔✔Interchange Plus pricing gets its name based on the fact that the rate charged for
the transaction comes straight from the Interchange table "plus" a surcharge amount.
Tiered - ✔✔Tiered pricing gets its name from the fact that there are multiple tiers set up to determine the
price associated with the transaction.
Sales Volume - ✔✔The quantity or number of goods sold or services sold in the normal operations of a
company in a specified period.
Transaction Counts - ✔✔the total number of transactions that are processed within a merchant account.
Average Ticket - ✔✔Average ticket is a metric that provides details on the average amount of sales by a
given customer. It is used by a range of businesses when analyzing business performance and sales
activity.
Authorization Fees - ✔✔The amount of money that is charged directly to an individual merchant
account each time communication is made between credit card processing software (when the sale
transaction is processed online, etc.) or point of sale (POS) terminal (when the sale transaction is
processed physically in person) and the authorizing network.
Effective rate - ✔✔The effective rate of a credit card processing statement is the total processing fees
divided by total sales volume.
, Batches - ✔✔Batch credit card processing is the practice of a merchant processing all of its authorized
credit card transactions for the day after the close of business or at a time determined by the credit card
processor.
Chargeback Activity - ✔✔A chargeback is a transaction reversal meant to serve as a form of consumer
protection from fraudulent activity committed by both merchants and individuals.
PCI Compliance - ✔✔The Payment Card Industry Data Security Standard (PCI DSS) is a set of
security standards designed to ensure that ALL companies that accept, process, store or transmit
credit card information maintain a secure environment.
Internet Gateways - ✔✔a merchant service provided by an e-commerce application service provider
that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and
clicks, or traditional brick and mortar. The payment gateway may be provided by a bank to its
customers, but can be provided by a specialized financial service provider as a separate service, such as
a payment service provider.
Virtual Terminals - ✔✔the web version of a physical credit card terminal or Point-of-Sale (POS) machine
Dial-up POS System - ✔✔Uses a dial-up connection to process payments
Gift and/or Loyalty cards - ✔✔Loyalty programs are structured marketing strategies designed by
merchants to encourage customers to continue to shop at or use the services of businesses associated
with each program.
Check conversion - ✔✔Check conversion is a reformatting service offered by banking merchants. Check
conversion allows banks to convert paper checks into electronic ones and then send them to the
appropriate receiving bank. The electronic check is forwarded on via the automated clearing house
(ACH).
Cash advances - ✔✔A cash advance allows you to use your credit card to get a short-term cash loan at a
bank or ATM. Unlike a cash withdrawal from a bank account, a cash advance has to be paid back —
just
100% Correct| Grade A+
NABU, APF and FANF - ✔✔MasterCard implemented a new fee, the Network Access and Brand Usage
fee (NABU). And following right on the heels of the MasterCard announcement, on July 1, 2009 Visa
implemented their U.S. Acquirer Processing Fee (APF).
Card brand dues and assessments - ✔✔In addition to Interchange, each card brand includes additional
fees based on the transaction amount and per transaction. These fees are called dues and assessments
and typically range from 0.105% - 0.45% on the transaction amount [ $0.0025 - $0.04.] Like
interchange, assessments are exactly the same for all credit card processors and no processor can give
you a lower rate or a better deal on assessments.
AVS and switch fees - ✔✔The fee is charged when your business utilizes the Address Verification
Service to check that the address provided by a cardholder matches the address on file with the credit
card company.
Authorization fee - ✔✔The voice authorization fee applies when you use a telephone dial-up service for
transaction authorization. A fee is charged for each call that is made. Voice authorization is useful in the
event your terminal or software malfunctions or your internet connection isn't working.
Batch fee - ✔✔A fee that is charged when you settle your daily transactions (also known as the batch)
with your credit card processor. If you have no credit card transactions to settle on a particular day, you
are not charged this fee.
Clearing and settlement fees - ✔✔clearing denotes all activities from the time a commitment is made
for a transaction until it is settled.
Chargeback and representment fees - ✔✔In short, a chargeback is a reversal of funds transferred.
Statement or reporting fees - ✔✔Fees that are charged for receiving statements or reports.
,Rewards Cards - ✔✔A cashback reward program is an incentive program operated by credit card
companies where a percentage of the amount spent is paid back to the card holder.
Card Not Present transactions - ✔✔A card not present transaction (CNP, MO/TO, Mail Order /
Telephone Order, MOTOEC) is a payment card transaction made where the cardholder does not or
cannot physically present the card for a merchant's visual examination at the time that an order is given
and payment effected.
Quick Service Restaurants (QSR) - ✔✔a specific type of restaurant that serves fast food cuisine and has
minimal table service.
Emerging Markets - ✔✔countries in the process of rapid growth & industrialization
Level 1 Data - ✔✔Level I purchasing card data includes the same information captured during a
traditional credit card purchase transaction. This includes: total purchase amount, date, merchant
category code and supplier/retailer name.
Level 2 Data - ✔✔Level II purchasing card data includes the same information captured at Level I, plus
the following: sales tax amount, customer's accounting code, merchant's tax ID number, applicable
minority - and women-owned business status and sales outlet ZIP code.
Level 3 Data - ✔✔Level III purchasing card data includes the same information captured at Levels I and
II, plus the following: quantities, product codes, product descriptions, ship to ZIP, freight amount, duty
amount, order/ticket number, unit of measure, extended item amount, discount indicator, discount
amount, net/gross indicator, tax rate applied, tax type applied, debit or credit indicator and alternate tax
identifier.
Discount Rate (Credit/Debit) - ✔✔The discount rate is the fee paid by merchants to credit card
processors as a fee associated with accepting general-use credit cards (such as Visa, MasterCard,
American Express and Discover). Typically this fee runs between 1 percent and 3 percent, depending on
the nature of the transaction.
Daily or monthly discount - ✔✔With monthly discount, your processor deducts fees from your account
in one lump sum once a month. With daily discount, your processor charges fees daily throughout the
month as well as at the end of the month.
,Surcharge - ✔✔A charge added to the usual cost
Billback - ✔✔Billback or bill back is an accounting service and/or suite of software that is used for cost
recovery.
ERR Rates - ✔✔Enhanced Rate Recovery Pricing. As a merchant business with an ERR rate of 1.69%
for your merchant account, you will be charged 1.69% for any transaction that qualifies on The
Interchange Table at 1.69% or below.
Interchange Plus - ✔✔Interchange Plus pricing gets its name based on the fact that the rate charged for
the transaction comes straight from the Interchange table "plus" a surcharge amount.
Tiered - ✔✔Tiered pricing gets its name from the fact that there are multiple tiers set up to determine the
price associated with the transaction.
Sales Volume - ✔✔The quantity or number of goods sold or services sold in the normal operations of a
company in a specified period.
Transaction Counts - ✔✔the total number of transactions that are processed within a merchant account.
Average Ticket - ✔✔Average ticket is a metric that provides details on the average amount of sales by a
given customer. It is used by a range of businesses when analyzing business performance and sales
activity.
Authorization Fees - ✔✔The amount of money that is charged directly to an individual merchant
account each time communication is made between credit card processing software (when the sale
transaction is processed online, etc.) or point of sale (POS) terminal (when the sale transaction is
processed physically in person) and the authorizing network.
Effective rate - ✔✔The effective rate of a credit card processing statement is the total processing fees
divided by total sales volume.
, Batches - ✔✔Batch credit card processing is the practice of a merchant processing all of its authorized
credit card transactions for the day after the close of business or at a time determined by the credit card
processor.
Chargeback Activity - ✔✔A chargeback is a transaction reversal meant to serve as a form of consumer
protection from fraudulent activity committed by both merchants and individuals.
PCI Compliance - ✔✔The Payment Card Industry Data Security Standard (PCI DSS) is a set of
security standards designed to ensure that ALL companies that accept, process, store or transmit
credit card information maintain a secure environment.
Internet Gateways - ✔✔a merchant service provided by an e-commerce application service provider
that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and
clicks, or traditional brick and mortar. The payment gateway may be provided by a bank to its
customers, but can be provided by a specialized financial service provider as a separate service, such as
a payment service provider.
Virtual Terminals - ✔✔the web version of a physical credit card terminal or Point-of-Sale (POS) machine
Dial-up POS System - ✔✔Uses a dial-up connection to process payments
Gift and/or Loyalty cards - ✔✔Loyalty programs are structured marketing strategies designed by
merchants to encourage customers to continue to shop at or use the services of businesses associated
with each program.
Check conversion - ✔✔Check conversion is a reformatting service offered by banking merchants. Check
conversion allows banks to convert paper checks into electronic ones and then send them to the
appropriate receiving bank. The electronic check is forwarded on via the automated clearing house
(ACH).
Cash advances - ✔✔A cash advance allows you to use your credit card to get a short-term cash loan at a
bank or ATM. Unlike a cash withdrawal from a bank account, a cash advance has to be paid back —
just
