Identify the payment model from description presented below:

A users write an electronic check, which is digitally signed with instruction to pay. This is transferred to another user, who then deposits the electronic check with the issuer. The issuer will verify payers signature on the payment and transfer the fund from the payers account to the payees account.

A. Electronic Money Model

B. Electronics Checks model

C. Electronic transfer model

D. Electronic withdraw model

Electronic check system model real-world checks quite well and thus relatively simple to understand and implement. A users write an electronic check, which is digitally signed instruction to pay. This is transferred to another user, who then deposits the electronic check with the issuer. The issuer will verify payers signature on the payment and transfer the fund from the payers account to the payees account.

For CISA exam you should know below information about payment systems

There are two types of parties involved in all payment systems – the issuer and the user. An issuer is an entity that operates the payment service. An issuer holds the items that the payment represent. The user of the payment service performs two main functions- making payments and receiving payments – and therefore can be described as a payer or payee receptively.

Electronic Money Model -The objective of electronic money systems is emulating physical cash. An issuer attempts to do this by creating digital certificates, which are then purchased by users who redeem them with the issuer at a later date. In the interim, certificates can be transferred among users to trade for goods or services. For the certificate to take on some of the attributes of physical cash, certain techniques are used so that when a certificate is deposited, the issuer can not determine the original withdrawer of the certificate. This provides an electronic certificate with unconditional uncertainty.

Electronic Check Model -Electronic check system model real-world checks quite well and thus relatively simple to understand and implement. A users write an electronic check, which is digitally signed instruction to pay. This is transferred to another user, who then deposits the electronic check with the issuer. The issuer will verify payers signature on the payment and transfer the fund from the payers account to the payees account.

Electronic Transfer Model -Electronic systems are simplest of three payment models. The payer simply creates a payment transfer instructions, sign it digitally and send it to issuer. The issuer then verifies the signature on the request and performs the transfer. This type of systems requires payer to be on-line and not payee.

The following were incorrect answers:

Electronic Money Model -The objective of electronic money systems is emulating physical cash. An issuer attempts to do this by creating digital certificates, which are then purchased by users who redeem them with the issuer at a later date. In the interim, certificates can be transferred among users to trade for goods or services. For the certificate to take on some of the attributes of physical cash, certain techniques are used so that when a certificate is deposited, the issuer can not determine the original withdrawer of the certificate. This provides an electronic certificate with unconditional uncertainty.

Electronic Transfer Model -Electronic systems are simplest of three payment models. The payer simply creates a payment transfer instructions, sign it digitally and send it to issuer. The issuer then verifies the signature on the request and performs the transfer. This type of systems requires payer to be on-line and not payee.

Electronic Withdraw Model – Not a valid type of payment system.

The following reference(s) were/was used to create this question:

CISA review manual 2014 Page number 183