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Definition: transaction processing


Updating the appropriate databases as soon as an order, payment or other transaction is made. Transaction processing enables anyone in the organization to obtain an account balance, inventory balance or current value of a financial portfolio.

Also called "online transaction processing" (OLTP), the OLTP market is demanding, requiring 24x7 operation and reliable computers and networks. As transaction processing in the 1970s and 1980s began to proliferate, computer reliability was a huge issue.

A Manual Example
A manual equivalent to transaction processing would be adding the amount to a running total every time a purchase is made. Contrast with "batch processing," whereby all receipts are saved in a drawer and added up at the end of the year. See two-phase commit, mission critical, industrial strength and fault tolerant.