What type of transaction can a cardholder make?

The correct choice indicates that a cardholder can engage in both card-present and card-not-present transactions. This reflects the versatility of payment methods available to cardholders.

In a card-present transaction, the cardholder physically presents their payment card at a point of sale, such as in a retail store or restaurant. This type of transaction is typically secured through various means, including chip technology and encrypted communication between the card and the terminal, which helps in preventing fraudulent activities.

On the other hand, card-not-present transactions occur in scenarios where the cardholder conducts a purchase without the physical card being presented. Examples include online shopping, phone orders, or transactions via mobile apps. These transactions utilize different security protocols, like tokenization and secure payment gateways, to mitigate the risks of fraud associated with the absence of a physical card.

Understanding that cardholders can perform both types of transactions is essential for grasping the complete landscape of payment processing and security measures needed for each type. This insight into transactional capabilities aids in evaluating risk management and security protocols in various payment scenarios.