APRP Vocab Already Graded A+
ACH (Automated Clearing House) and Related Concepts
- ACH: Automated Clearing House.
- ACH Network: The backbone for electronic money movement and data processing, facilitating
distribution and settlement of electronic credits, debits, and non-monetary entries among financial
institutions.
- ACH Operator: Central facility for clearing that receives entries from Originating Depository Financial
Institutions (ODFIs) and distributes them to Receiving Depository Financial Institutions (RDFIs).
- ACH Policy: A financial institution's outlined goals and objectives for its ACH program, requiring board
approval. It includes compliance with NACHA rules, the types of products offered, internal controls for
risk management, and third-party sender relationships.
Transaction Handling and Risk Management
- Addressing: Automated routing of a transaction using a data set through a directory service.
- Alternate Channel Confirmations: A fraud detection method involving customer notifications of high-
risk activities via multiple communication channels to increase confidence.
- AML (Anti-Money Laundering): Regulations and practices to prevent money laundering activities.
- Ancillary Risk: Consequences resulting from unmanaged risks such as credit, operational, fraud,
systemic, or compliance risks.
Digital Payments
- Android Pay: A Google-developed digital wallet platform enabling in-app and tap-to-pay purchases on
mobile devices, functioning as an open loop system.
- Apple Pay: A mobile payment and digital wallet service by Apple Inc., allowing payments via iPhone,
Apple Watch, iPad, or Mac within an open loop system.
Data and Security
- Anomaly Detection: Technique to identify deviations from established legitimate behavior patterns.
- API: Application Program Interface, a set of specifications for programs to exchange information.
- Authentication: Instructions provided by the payer to the payee regarding transaction details (timing,
amount, payee, source of funds).
,Verification and Compliance
- Address Verification System (AVS): Tool to validate a cardholder's billing address and other information
for transactions conducted by mail, telephone, or online.
- Audit Policy: A financial institution's policy detailing audit objectives, scope, authority, standards, and
external auditor restrictions.
Regulatory Compliance
- Basel III Regulatory Capital: Comprehensive reforms by the Basel Committee on Banking Supervision to
enhance banking sector regulations, supervision, risk management, as well as liquidity and capital
requirements.
Business Continuity
- Business Continuity Planning (BCP): Developing, implementing, and testing disaster recovery strategies
to maintain acceptable service levels for retail payment-related operations.
Business Impact Analysis (BIA) ✔️A flow analysis that involves an assessment and prioritization of those
business functions and processes that must be recovered. should also consider the impact of legal and
regulatory requirements. should also estimate the maximum allowable downtime for critical business
functions and processes and the acceptable level of losses (data, operations, financial, reputation, and
market share) associated with this estimated downtime
Biometrics ✔️Methods include voice scanning and iris and retinal imagingfinger scan linked to his or
her personal identification information.
Capital adequacy ✔️Refers to the amount of capital a financial institution has to hold as required by its
regulator
Card Products ✔️Credit cards, Debit cards and Prepaid cards
CDD ✔️Customer Due Diligence
, Consumer Financial Protection Bureau (CFPB) ✔️Rule-making authority and, with respect to entities
within its jurisdiction, enforcement authority to prevent unfair, deceptive, or abusive acts or practices in
connection with any transaction with a consumer for a consumer financial product or service, or the
offering of a consumer financial product or service
Challenge Questions ✔️Used as a backup in the event that primary logon authentication technique
becomes inoperable or presents an unexpected characteristic. Can include "out-of-wallet' questions,
which are questions that a user only knows and a fraudster cannot obtain just with stolen identity.
Change Control Policy ✔️Addresses potential changes to the operating environment
Charge-backs ✔️A demand by a credit-card provider for a retailer to make good the loss on a
fraudulent or disputed transaction
Check/Remote Deposit Capture (RDC) Policy ✔️Sets forth policies and procedures adopted by the FI in
regards to risks associated with its offering of RDC services to its accountholders
CIP ✔️Customer Identification Program
Closed Loop Network ✔️Provides payment services directly to merchants and cardholders by the
owner of the network without involving financial institutions as intermediaries. American Express and
Discover are two examples.
Compliance Risk ✔️Party to a transaction fails to comply, either knowingly or inadvertently with
payment system rules and policies, regulations and applicable U.S. and state law
Compliance risk management ✔️Be aware of all payment system rules, policies, regulations and
applicable U.S. and state law
Contactless cards ✔️Have an embedded computer chip with financial and personal information used
for payment transactions, and they employ RFID technology for payment transmission. They include a
microcontroller (or equivalent intelligence) and internal memory and have the ability to secure, store,
and provide access to data on the card.
