| Course | FI310 FinTech Principles and Concepts |
|---|---|
| Unit | Unit 3 |
| Paper type | Payments analysis |
| Length | About 600 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Finance |
| Updated | October 2026 |
Free sample paper for FI310 Unit 3
One $48.60 Tap, Followed End to End: A Unit 3 Payments Analysis From Phone to Merchant Account
[Student Name]
Purdue University Global
FI310: FinTech Principles and Concepts
Unit 3 Payments Analysis
[Instructor Name]
[Date]
The bike shop, its customer and every figure are composite; fee rates are illustrative; the articles and book cited are real.
The Purchase
A customer buys a tire and a tube at the bike shop and pays $48.60 by holding her phone near the terminal. She sees the payment approved in about two seconds. The shop sees $47.11 arrive in its bank account the next morning. This analysis follows the $48.60 and accounts for the $1.49 difference.
Step 1: The Tap and the Token
The phone does not send the card number. When the card was added to the phone's wallet, the card network issued a device token, a substitute number tied to that phone, and each payment also carries a one-time cryptographic code. If a thief copied the token from this transaction, it would be useless on any other device and without a fresh code. That is the main security gain over swiping a card, which sends the real number.
Step 2: Authorization
The terminal sends the token and code to the shop's payment processor, which forwards them to the card network. The network swaps the token back for the real account number, checks the code, and sends the request to the bank that issued the card. The issuer checks the balance or credit line and its fraud models, approves, and the approval travels back the same path. All of this happens in about two seconds, but no money has moved yet.
Step 3: Clearing and Settlement
At the end of the day the processor sends the shop's batch of approved transactions to the network for clearing. Overnight, the issuer pays the network, and the network pays the processor, minus fees. The processor deposits the shop's money the next business day.
Step 4: Who Takes What
Of the $48.60, the issuer keeps the largest share as interchange, here about $0.98, set by the network's published rates and paid to the issuer for carrying the risk and funding the transaction. Card networks are two-sided platforms, and they set these fees to keep both cardholders and merchants on board, which is why merchants pay most of the cost (Rochet & Tirole, 2003). The network charges an assessment of about $0.07. The processor adds its own markup, $0.44 on this sale under its blended rate. Together, $1.49, about 3.1 percent, which is typical for a small shop on a flat-rate plan.
The phone made the payment safer and the checkout faster, but it did not make it cheaper for the shop, because the fees are set by the card rails underneath, which are the same whether the card is swiped, tapped or held in a phone.
Who Bears the Risk
If the customer disputes the charge, the shop may face a chargeback, losing the $48.60 and paying a fee unless it can show the sale was valid. Tokenized wallet payments carry stronger authentication, which shifts fraud liability away from the merchant in most cases (Chishti & Barberis, 2016).
What the Analysis Shows
FinTech often improves the front end of a payment while the economics stay with incumbent networks, a pattern economists have noted in finance more broadly, where unit costs have fallen less than technology would suggest (Philippon, 2016). For the bike shop, the practical lessons are to compare processors' markups and consider an interchange-plus plan as volume grows.
References
Chishti, S., & Barberis, J. (2016). The FinTech book: The financial technology handbook for investors, entrepreneurs and visionaries. Wiley.
Philippon, T. (2016). The FinTech opportunity (NBER Working Paper No. 22476). National Bureau of Economic Research. https://doi.org/10.3386/w22476
Rochet, J.-C., & Tirole, J. (2003). Platform competition in two-sided markets. Journal of the European Economic Association, 1(4), 990-1029. https://doi.org/10.1162/154247603322493212
The Purdue Global FI310 Unit 3 instructions
Unit 3 of FI310 asks you to analyze how a payment moves and who is paid along the way. Start with a single transaction, its amount and what the merchant finally receives. Then follow it in order: what the device sends, how authorization works, when clearing and settlement happen and when funds reach the merchant. At each step, name the party involved and what it does. Break the total cost into its parts, showing which party keeps each one and why. Discuss who bears fraud and dispute risk. End with what the technology improved and what it left the same, plus practical advice for the merchant. State the basis of every fee figure, and cite research on two-sided card markets together with a course text in APA 7.
Inside the FI310 Unit 3 example
The sample opens with a tire and tube bought for $48.60 by phone and $47.11 deposited the next morning, then sets out to explain the $1.49 gap. Step one shows the phone sending a device token and a one-time code instead of the card number. Authorization runs from terminal to processor to network to issuer and back in about two seconds, though no money has moved. Clearing happens in the evening batch and settlement overnight. The fee split gives the issuer about $0.98 in interchange, the network $0.07 and the processor $0.44, roughly 3.1 percent. The highlighted sentence explains why the phone made checkout safer but not cheaper, and the close suggests comparing processor markups and interchange-plus pricing.
Where the points sit in the FI310 Unit 3 rubric
Payments analyses in FI310 earn points for accurate sequence and complete accounting. Graders check that authorization, clearing and settlement are kept distinct, that each fee is assigned to the party that keeps it, and that the parts add up to the total the merchant lost. The rubric rewards explaining why fees are set where they are, such as the two-sided pricing of card networks, and it values a clear account of chargeback and fraud liability. Analyses that treat a tap as moving money instantly, lump all fees together or confuse the issuer with the processor lose points. Practical recommendations for the merchant and a labeled basis for every rate show the analysis can be used.
FI310 Unit 3 help: mistakes that cost points
Weak Unit 3 analyses say a payment is "processed" without saying by whom, so the parties blur together. Others treat the approval at the terminal as the moment money moves. Fee breakdowns often stop at a single percentage and never reach interchange, network assessments and processor markup. Tokenization is described as encryption, which misses why a copied token is useless. Few papers explain chargebacks or who carries fraud losses. When your prompt uses a debit card, an online checkout or an account-to-account transfer, a writer can trace that payment's own rails and fees, step by step, for the merchant in your scenario.
Get an FI310 Unit 3 example written to your instructions
Paste the transaction your Unit 3 prompt describes, or name a purchase you made recently and how you paid, along with the FI310 instructions and rubric. Every stage of that payment is traced and every fee split out in the sample. A first one costs nothing, and 24-48h is the usual wait. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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- FI310 Unit 1: Discussion Post on Mobile Deposit
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- FI310 Unit 4: Digital Lending Case Study
- FI310 Unit 5: Platform Business Analysis
- FI310 Unit 6: Seminar Reflection
- FI310 Unit 7: Risk Assessment Memo
- FI310 Unit 8: Technology Adoption Brief
- FI310 Unit 9: Financial Inclusion Analysis
- FI310 Unit 10: Sector Outlook Report
FI310 Unit 3 questions, answered
My prompt uses a debit card or an instant bank transfer. Does the structure change?
The timeline stays and the parties change. A debit purchase runs over similar card rails, though interchange is often lower and, for issuers above a size threshold, capped by federal rule. An instant account-to-account payment removes the card network entirely and settles in seconds, which shifts the analysis toward irrevocability and fraud. The sample's three questions at each stage still apply.
Where do the fee percentages come from?
They are illustrative, chosen to resemble published interchange schedules for a rewards credit card at a small merchant, and the sample labels them that way. Card networks publish their interchange tables, and processors disclose their own pricing to merchants. If your prompt supplies rates, the analysis uses those. Stating the basis for each figure matters more to graders than hitting a particular number.
Where can I find a free FI310 Unit 3 sample paper?
This page holds a full FI310 Unit 3 payments analysis of a $48.60 phone-wallet purchase at a composite bike shop, with every step, a fee breakdown to the cent and APA 7 references.
What is a device token?
A substitute number issued when a card is added to a phone's wallet. It works only from that device and with a fresh one-time code, so a thief who copies it from a transaction cannot reuse it elsewhere, unlike a swiped card number.
Why does the shop still pay about 3 percent when the phone is safer?
Because the fees come from the card rails underneath, not from the phone. Interchange, network assessments and processor markup apply whether a card is swiped, tapped or held in a wallet, so the shop gains security and speed but not lower costs.