Q1. What does OTP stand for in digital financial transactions?
a) Online Transaction Protocol
b) One Time Password
c) Open Transfer Procedure
d) Offline Transfer Protocol
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Correct Answer: b) One Time Password
Explanation: OTP stands for One Time Password, a security feature used to authenticate users for online transactions by providing a unique code valid for a single session.
Q2. What is the primary use of a QR code in digital payments?
a) To encrypt data
b) To store large amounts of data
c) To quickly transfer payment information
d) To verify the identity of the user
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Correct Answer: c) To quickly transfer payment information
Explanation: QR codes are used to quickly transfer payment information by scanning, which simplifies the payment process in digital transactions.
Q3. What does UPI stand for in digital financial transactions?
a) Unified Payment Interface
b) Universal Payment Identifier
c) Unique Payment Integration
d) User Payment Interface
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Correct Answer: a) Unified Payment Interface
Explanation: UPI stands for Unified Payment Interface, a digital payment system that allows users to make transactions through their mobile devices seamlessly.
Q4. AEPS stands for:
a) Automated Electronic Payment System
b) Aadhaar Enabled Payment System
c) Advanced Electronic Payment Service
d) Access Enabled Payment System
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Correct Answer: b) Aadhaar Enabled Payment System
Explanation: AEPS stands for Aadhaar Enabled Payment System, which uses the Aadhaar number for facilitating financial transactions through biometric authentication.
Q5. USSD is used primarily for:
a) Video streaming
b) Mobile banking services
c) High-speed internet
d) Wireless communication
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Correct Answer: b) Mobile banking services
Explanation: USSD (Unstructured Supplementary Service Data) is used for mobile banking services, allowing users to perform transactions and access banking information through a simple text-based menu.
Q6. What is the primary function of a credit card?
a) To provide a loan
b) To facilitate direct bank transfers
c) To make purchases and payments
d) To earn interest on deposits
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Correct Answer: c) To make purchases and payments
Explanation: A credit card is used to make purchases and payments on credit, allowing users to borrow funds up to a certain limit for transactions.
Q7. An e-Wallet is used for:
a) Storing physical cash
b) Managing digital transactions and storing payment information
c) Providing loans to users
d) Encrypting sensitive data
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Correct Answer: b) Managing digital transactions and storing payment information
Explanation: An e-Wallet is a digital tool used to manage transactions and store payment information securely, allowing users to make online payments easily.
Q8. What does PoS stand for in digital financial tools?
a) Point of Sale
b) Payment on System
c) Processor of Sales
d) Payment of Services
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Correct Answer: a) Point of Sale
Explanation: PoS stands for Point of Sale, which refers to the hardware and software used to process sales transactions in retail and service environments.
Q9. What is the purpose of NEFT in internet banking?
a) Real-time payment processing
b) Immediate payment service
c) Electronic transfer of funds
d) Global payment service
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Correct Answer: c) Electronic transfer of funds
Explanation: NEFT (National Electronic Fund Transfer) is used for the electronic transfer of funds between banks, facilitating domestic money transfers.
Q10. RTGS is best suited for:
a) Small value transactions
b) Large value transactions
c) Online bill payments
d) Mobile recharge
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Correct Answer: b) Large value transactions
Explanation: RTGS (Real Time Gross Settlement) is designed for large value transactions that need to be processed in real-time and settled immediately.