Q1. What does OTP stand for in digital financial transactions?
a) One Time Password
b) Online Transaction Password
c) Open Transaction Protocol
d) Over The Phone
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Correct Answer: a) One Time Password
Explanation: OTP stands for One Time Password, which is a security feature used to verify transactions by generating a unique code for each session, enhancing security.
Q2. What is the primary use of a QR Code in digital transactions?
a) To store large amounts of data
b) To initiate a payment by scanning the code
c) To encrypt emails
d) To create a secure password
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Correct Answer: b) To initiate a payment by scanning the code
Explanation: QR Codes (Quick Response Codes) are used to facilitate payments and transactions by allowing users to scan the code with their mobile devices for quick processing.
Q3. What does UPI stand for in digital financial services?
a) Universal Payment Interface
b) Unified Payment Interface
c) Unique Payment Interface
d) User Payment Integration
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Correct Answer: b) Unified Payment Interface
Explanation: UPI stands for Unified Payment Interface, which is a digital payment system allowing seamless transactions between banks and payment systems through a single platform.
Q4. Which of the following is true about AEPS?
a) It requires an internet connection for transactions
b) It uses biometric authentication linked to Aadhaar
c) It is only available for international transactions
d) It uses a physical card for transactions
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Correct Answer: b) It uses biometric authentication linked to Aadhaar
Explanation: AEPS (Aadhaar Enabled Payment System) uses biometric authentication linked to the Aadhaar number, enabling secure and easy transactions through fingerprint recognition.
Q5. What does USSD stand for in financial services?
a) Unified Supplementary Service Data
b) Unstructured Supplementary Service Data
c) Universal Secure Service Data
d) Unique Supplementary Service Data
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Correct Answer: b) Unstructured Supplementary Service Data
Explanation: USSD (Unstructured Supplementary Service Data) is a protocol used for mobile banking services, allowing transactions and information access without needing internet connectivity.
Q6. What is a primary feature of a credit card?
a) Allows borrowing up to a certain limit
b) Requires immediate payment of funds
c) Is linked directly to a bank savings account
d) Offers cashback on every purchase
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Correct Answer: a) Allows borrowing up to a certain limit
Explanation: A credit card allows users to borrow funds up to a pre-set limit, which they must repay, usually with interest, if not paid in full by the due date.
Q7. What is the main advantage of using an e-Wallet?
a) It provides a physical card for transactions
b) It allows for quick and secure digital transactions
c) It offers high interest rates on stored funds
d) It requires regular physical visits to the bank
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Correct Answer: b) It allows for quick and secure digital transactions
Explanation: An e-Wallet allows users to store funds digitally and make quick, secure transactions online without needing physical cash or cards.
Q8. What does PoS stand for in the context of digital payments?
a) Point of Sale
b) Payment of Service
c) Place of Sale
d) Product of Sale
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Correct Answer: a) Point of Sale
Explanation: PoS (Point of Sale) refers to the system or terminal where a transaction occurs, allowing for the processing of payments via cards or other digital methods.
Q9. Which of the following is NOT a method of internet banking?
a) NEFT
b) RTGS
c) IMPS
d) USSD
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Correct Answer: d) USSD
Explanation: USSD is used for mobile banking rather than internet banking. NEFT, RTGS, and IMPS are methods of transferring funds online through internet banking.
Q10. What is NEFT used for?
a) Electronic payments in real-time
b) Immediate payment service
c) National Electronic Funds Transfer
d) Online payment of utility bills
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Correct Answer: c) National Electronic Funds Transfer
Explanation: NEFT (National Electronic Funds Transfer) is used for transferring funds electronically between banks in India, with transactions processed in batches.