Definition: transaction processing

Updating the appropriate database records as soon as a transaction (order, payment, etc.) is entered into the computer. It may also imply that confirmations are sent at the same time.

Transaction processing systems are the backbone of an organization because they update constantly. At any given moment, someone may need an inventory balance, an account balance or the total current value of a financial portfolio. Also called "online transaction processing" (OLTP), the OLTP market is a demanding one, often requiring 24x7 operation and the most reliable computers and networks.

A manual example of transaction processing would be that every time you purchased an item, you added the amount paid to a running total. Contrast with "batch processing," which means that you save all receipts in a drawer and add them up at the end of the year for taxes. See two-phase commit, mission critical, industrial strength and fault tolerant.