Transaction processing is a computer-based group of logical operations that must succeed or fail as a group. Transactions must pass ACID tests, be atomic, consistent, isolated, and durable. Transaction processing systems have been around since the 1970s and are used by nearly every business.
Transaction processing is a computer-based group of logical operations. For this to work, all operations must succeed or fail as a group. A simple example of transaction processing is paying a bill from your bank account. The process of paying an invoice from your account is to debit your account, for example, 100 US dollars (USD) and credit your service provider’s account.
It may seem like a simple transaction, but it can actually consist of several sub-operations. If the $100 charge was successful, but the credit was not credited to the utility provider’s account, the transaction would have failed. Your 100 USD would be lost somewhere in the transaction. The transaction processing system allows you to group all operations into a single transaction to avoid consistency issues.
Systems capable of processing transactions must pass atomicity, consistency, isolation, and durability tests, otherwise known as ACID tests. Transactions are known as atomic which means whether the transaction will happen or not. If one account is debited, another account must be credited.
The transaction processing system must always be consistent with its rules. If there are errors in the transaction on both sides, the transaction will fail. Transaction isolation means that other processes never see the information during the transaction. They can see the information before or after the transaction, but not during the transaction. For example, if two people book the last seat in the theater at the same time, both can see the seat before booking, but only one person will be able to book that seat.
Transactions must be durable. This means that when the last seat in the room has been booked and you have received notification that the seat is yours, it is permanently registered. No matter what problems occur in the system, there are backups in the transaction processing system to ensure that the record remains permanent.
Transaction processing systems have been around since the 1970s and nearly every business uses them. The advent of the internet saw a boom in these systems and software. Over the years, the cost of purchasing and implementing the necessary software has decreased so much that most companies can apply it profitably.
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