Association for Financial Professionals (AFP) Practice Exam

What is the most common method for consumer-to-business (C2B) payments in developed countries?

1. Cash payments

2. Check payments

3. Electronic payments

4. Virtual currencies

The correct answer is: Electronic payments

In developed countries, electronic payments have become the most common method for consumer-to-business (C2B) transactions due to their efficiency, convenience, and speed. This form of payment includes various methods such as credit and debit card transactions, online banking transfers, and mobile payment systems, which are widely accepted by businesses. Consumers prefer electronic payments because they often reduce the time and hassle associated with handling cash or checks, allowing for quick transactions. Moreover, the rise of e-commerce and digital platforms has further established electronic payment systems as the standard for transactions. Businesses also benefit from electronic payments, as they streamline accounting processes, reduce the risk of theft or loss associated with cash, and facilitate easier reconciliation of accounts. Cash and check payments, while still utilized in some contexts, are less common in fast-paced transactions typical of developed markets. Virtual currencies are emerging but do not yet have the same level of integration in everyday consumer business transactions compared to established electronic payment methods.