Transaction Processing Systems: Application & Examples

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  • 0:00 Order in Our Lives
  • 0:37 Transaction Processing Systems
  • 1:31 Significance
  • 2:11 Applications and Examples
  • 3:37 Lesson Summary
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Lesson Transcript
Instructor: David Gloag

David has over 40 years of industry experience in software development and information technology and a bachelor of computer science

In this lesson, we'll take a look at transaction processing systems, what they are, why transactions are significant, some applications, and examples of transactions.

Order in Our Lives

We live in a world where order is important. If you don't agree, just think about the last time you stood in line for tickets to a show at your favorite theater, waited to give your blood at your local hospital, or waited to pay for your groceries. As a people, we generally believe in fairness and orchestrate access to shared resources in a first-in-first-out fashion. It stands to reason that we would extend this idea to business dealings as well. This is where the idea of a transaction and transaction processing system come into play.

Transaction Processing Systems

A transaction is an exchange of goods, services, and/or communication between two sides that has an effect on each side. In the simplest case, a conversation between you and a friend is a transaction. You exchange information, and both of you are affected by the exchange. A transaction processing system is a system that repeatedly processes various transactions. Unlike the conversation example, a transaction processing system tends to be more rigid and has the following characteristics:

  • Performance - Transactions are performed as fast as possible.
  • Reliability - Transaction performance occurs like clockwork.
  • Consistency - Transactions are performed in the same way each and every time.
  • Atomic - Transactions are indivisible; once started, transactions are performed to completion.


Transaction processing is also known as real-time processing. With the characteristics previously mentioned, transactions and transaction processing are significant because they ensure a couple of key things:

  • The system is up to date - It doesn't matter when you examine it, it is as current as possible.
  • Preserve the order of occurrence - No matter when a transaction occurs, it is processed in the order it was initiated.
  • Handle multiple input sources - Even geographically diverse sources can be addressed in this fashion.

As you might imagine, this can be useful in some situations, which we'll talk about more in the next section.

Applications and Examples

Transaction processing is used in a number of applications. Most exist behind-the-scenes, so you may not be familiar with them, but there are a couple that are closer to home. These include:

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