What’s Online Transaction Processing?

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Online transaction processing is a collective term used to describe a classification of systems that process each stage of a transaction in an online environment. Sometimes known as OLTP, this processing typically involves entering data, retrieving information from some type of database or source, and proceeding logically upon completion of a transaction. While many tend to think that OLTP is related to processing financial transactions in an online environment, the term can also be applied to other types of transactions, such as the transfer of electronically signed documents through a server for point-to-point transmission.

The underlying function of online transaction processing is to allow users to initiate some type of online transaction by connecting to the appropriate servers and data sources to complete the transaction successfully. For example, an online money transfer service allows users to identify a payment recipient, using an account number or email address associated with the recipient’s account, enter the amount to be paid, schedule payment for immediate or delayed delivery, then execute the transaction. As part of the process, the software used by the service provider verifies the availability of funds from a designated source, approves the transaction, then carries out the transmission according to the parameters set by the sender. Many services of this type return a confirmation number to document the transmission, while deducting the transfer amount from the funding source.

At the end of the transaction, the online transaction processing process delivers the transmitted funds to the recipient’s account. Typically, a notification is generated and sent to the account holder, notifying them of the receipt of funds. If the transaction cannot be completed for some reason, the originator is notified of the status, making it possible to cancel the transaction or instruct the system to try again.

Along with money transfers between accounts, online transaction processing can also involve transferring data between points. For example, electronic copies of documents such as contracts can be sent, approved, electronically signed, then distributed to one or more parties. In a broad sense, online transaction processing occurs whenever a consumer places an order with an online retailer, an employee logs into work using web-based watch software, or even when debit cards are used to pay for purchases. in a supermarket . In each scenario, a transaction is initiated that uses the Internet to process and complete an order to the mutual satisfaction of both parties involved in the transaction.

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