Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is an Open System Stored Value Card?

1. A prepaid card for local transactions only

2. A debit card connected to a personal bank account

3. A prepaid card linked to a global funds network

4. A credit card with a high withdrawal limit

The correct answer is: A prepaid card linked to a global funds network

An Open System Stored Value Card is accurately defined as a prepaid card linked to a global funds network. This type of card allows users to load money onto the card and use it for transactions at various merchants, both locally and internationally, as long as those merchants accept the cards within that global network. The key characteristic of an open system is its flexibility and wide acceptance across various locations and platforms. This makes it distinct from other types of stored value cards, which may be restricted to specific merchants or regions. In contrast, the other options do not encapsulate this broad functionality. A prepaid card intended for local transactions only is indicative of a closed system, limiting where the card can be used. A debit card connected to a personal bank account has different operational mechanics, relying on direct withdrawals from the account balance rather than preloaded funds. Lastly, a credit card with a high withdrawal limit refers to credit instruments that do not operate on the prepaid model, instead drawing on credit lines extended by financial institutions. Understanding these distinctions underlines why the classification of an Open System Stored Value Card as one linked to a global funds network is appropriate.