Accredited ACH Professional (AAP) Practice Exam

In card payment systems, who is considered the Cardholder?

1. A person who issues credit cards

2. A financial institution that processes payments

3. A consumer who uses the card to make purchases

4. A merchant selling goods and services

The correct answer is: A consumer who uses the card to make purchases

The correct response indicates that the cardholder is a consumer who uses the card to make purchases. This designation is critical in understanding the dynamics of card payment systems. The cardholder is the individual who possesses the card and utilizes it to access their account for transactions, thus engaging with the payment system directly. This role typically involves making purchases, whether in physical stores or online, and represents the end-user perspective in the payment processing ecosystem. In contrast, the other choices highlight different roles within the card payment infrastructure. A person who issues credit cards represents the issuer or financial institution that provides the card to consumers, but they do not engage in the purchasing process as a cardholder. A financial institution that processes payments refers to entities like banks or credit unions that facilitate the transaction process but are not directly involved in the purchasing action made through the card. Lastly, a merchant selling goods and services is the party that accepts card payments but, again, does not fulfill the role of the cardholder, as they are the sellers in the transaction. Understanding these distinctions clarifies the pivotal role the cardholder plays in the card payment system.