• Transaction: what is it?

    We often hear a term like a transaction. What does this concept mean? As a rule, it refers to the transfer of funds, but there are other interpretations of this definition.

    Consider the areas in which the concept of a transaction can be used.

    Transaction concept

    In computer science

    In computer science, a transaction is a group of operations that is viewed and processed simultaneously. In this case, this procedure is needed to compile a DBMS in which a transaction allows you to execute commands at the same time, for example, an error mark followed by its entry in the database, which is essentially automatic recording of actions.

    In physics

    In physics, a transaction is a key concept of quantum mechanics within the framework of interpretation, which was proposed by John Kramer and is an explanation of quantum interactions under standing wave conditions.

    In psychology

    In this area, a transaction is a fact of information transfer between two persons. That is, a dialogue or an established communicative contact.

    In economics

    In economics, when speaking of transactions, they usually mean banking. By banking transaction is called a kind of contract, which implies a transaction relating to the customer’s account. At the moment, transactions are divided into offline and online types. Consider this type of transaction in more detail.

    Banking transaction

    A transaction can be initiated using a written order or by using an electronic order using internet banking. A transaction has two states: completed or not executed.

    As a rule, a bank transaction is carried out using a payment card. To make a transaction, a payment terminal is required, payment can occur both independently and with the help of an employee. A terminal that has a retail outlet or a company that provides commercial services must be registered with an acquiring bank that will service the terminal.

    During the transaction, the data is read from the payment card and transferred to the operations center. Data reading occurs in the payment system in which the acquiring bank and the participant bank are identified, whose client is the card holder.The most common payment systems are now Visa and MasterCard.

    How does a bank transaction occur?

    1. The payment system needs to check the card number, namely, scan it in order to find out if it is in the stop list.
    2. After receiving a positive request, the payment system sends the request to the issuing bank that issued the card.
    3. The issuing bank forwards this request to the authorization center, where the card will be checked for legality of the transaction. This is done to prevent fraud and to check for breach of the terms of the service contract.
    4. After that, the PIN-code entered by the cardholder is checked, as well as checking the balance of funds in the account or, if the card is a credit, payment limit.
    5. If all stages of the check have been completed successfully, the issuing bank sends a request through the payment system directly to the point of sale.
    6. Next, the issuer bank settles with the acquiring bank, which is the holder of the terminal: the payment system receives a fee for its use.
    7. Next, the funds are debited from the client's payment card.This completes the transaction.

    Offline transaction

    Now consider how an offline transaction occurs.

    1. Offline transaction occurs without recourse to the acquiring bank.
    2. The money simply remains on the account of the terminal, which is held by an acquiring bank.
    3. The funds are debited from the client’s account instantly, and the money from the terminal is transferred to the account of the acquiring bank after the terminal is connected to the communication channel for transmitting information. An example of such an offline system is the Sbercard payment system.
    4. The advantages of such a system are that it eliminates delays when applying to the acquiring bank, which, in fact, does not occur, unlike in the case of an online transaction.
    5. Thus, the cardholder who carries out an offline transaction minimizes the risk of losing time and receiving a refusal from an acquiring bank, the cause of which may not be in his card, but in the failure of the serving terminal system.

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