What does a cardholder-activated terminal (CAT) do?

A cardholder-activated terminal (CAT) is designed to be initiated by the cardholder rather than by a merchant. This unique feature allows cardholders to directly engage with the terminal for various transactions, providing them with control over the process. CATs are commonly found in environments such as retail locations and even at some financial institutions, where the user interacts directly with the terminal to perform functions like processing payments, checking balances, or accessing account information.

By contrast, the other options involve capabilities or functionalities that are not inherent to CATs. Although authenticator features are important in various payment systems, they are not the primary purpose of these terminals. Additionally, while CATs may offer cash withdrawal functions, they are not limited to processing only cash transactions. Generating automatic statements is also not a feature typically associated with CATs; statements are usually provided through different systems or devices.

Overall, option C clearly encapsulates the defining characteristic of cardholder-activated terminals by highlighting that they are initiated by the cardholder's actions, thereby emphasizing user autonomy and convenience in financial transactions.