Q1. What does OTP stand for in digital financial tools?
a) Online Transaction Password
b) One Time Password
c) Operational Transaction Password
d) Open Transfer Password
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Correct Answer: b) One Time Password
Explanation: OTP stands for One Time Password, which is a security feature used to authenticate transactions or logins by providing a unique password valid for a single session or transaction.
Q2. What is the primary function of a QR Code?
a) Encrypt data
b) Store contact information
c) Provide a quick response link to information
d) Manage online transactions
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Correct Answer: c) Provide a quick response link to information
Explanation: QR Codes (Quick Response Codes) are used to quickly access information through a scan, often linking to websites or specific data, enhancing convenience and efficiency.
Q3. What does UPI stand for in the context of digital payments?
a) Universal Payment Interface
b) Unified Payment Interface
c) Unique Payment Interface
d) User Payment Interface
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Correct Answer: b) Unified Payment Interface
Explanation: UPI stands for Unified Payment Interface, which is a digital payment system that allows users to link multiple bank accounts to a single mobile application for seamless transactions.
Q4. Which system uses Aadhaar numbers to facilitate transactions?
a) UPI
b) NEFT
c) AEPS
d) RTGS
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Correct Answer: c) AEPS
Explanation: AEPS (Aadhaar Enabled Payment System) uses Aadhaar numbers to authenticate transactions and provide banking services, allowing people to perform transactions without a bank account.
Q5. What does USSD stand for in mobile financial services?
a) Universal Supplementary Service Data
b) Unstructured Supplementary Service Data
c) Unified Supplementary Service Data
d) Universal Secure Service Data
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Correct Answer: b) Unstructured Supplementary Service Data
Explanation: USSD (Unstructured Supplementary Service Data) is a communication protocol used by mobile phones to interact with the bank or service provider for transactions and information.
Q6. Which of the following is NOT a type of card used in digital financial transactions?
a) Debit Card
b) Credit Card
c) Gift Card
d) Mobile Card
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Correct Answer: d) Mobile Card
Explanation: Debit Cards, Credit Cards, and Gift Cards are common types of payment cards, while a “Mobile Card” is not a standard financial instrument.
Q7. What is an e-Wallet used for?
a) Storing physical cash
b) Managing cryptocurrencies
c) Digitally storing and using payment methods
d) Tracking offline purchases
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Correct Answer: c) Digitally storing and using payment methods
Explanation: An e-Wallet is a digital tool used to store payment information, allowing users to make transactions electronically without needing physical cards or cash.
Q8. What does PoS stand for in the context of payment systems?
a) Point of Sale
b) Payment of Service
c) Product of Sale
d) Process of Sale
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Correct Answer: a) Point of Sale
Explanation: PoS (Point of Sale) refers to the location or system where a transaction takes place, typically involving the use of a terminal or register to process payments.
Q9. Which banking service allows real-time settlement of transactions?
a) NEFT
b) RTGS
c) IMPS
d) USSD
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Correct Answer: b) RTGS
Explanation: RTGS (Real Time Gross Settlement) enables the real-time settlement of transactions, meaning funds are transferred immediately and directly from one bank account to another.
Q10. What is the main difference between NEFT and IMPS?
a) NEFT is faster than IMPS
b) IMPS operates in real-time, NEFT does not
c) NEFT supports international transfers, IMPS does not
d) IMPS is used for bulk payments, NEFT is for individual transactions
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Correct Answer: b) IMPS operates in real-time, NEFT does not
Explanation: IMPS (Immediate Payment Service) offers real-time transaction processing, whereas NEFT (National Electronic Fund Transfer) processes transactions in batches and may take longer.