Transaction Processing Systems

What is a TPS?

A transaction processing system is a system that performs and processes transactions. The word 'transaction' is usually referred to any kind of exchange between two parties.

A TPS is one of the earliest computer based systems to ever exist.

There are three components to a TPS:

1- Data (input): This is the information that is required for the transaction to be performed

2- Analysis: This is where the input is examined and analyzed

3- Output: This is the final result of the previous analysis

Transactions mainly involve money being exchanged in one way or another. Therefore, it is very important for the data and information to be confined and taken care of accordingly to avoid any possible mishaps.

An example of a TPS is the ATM machine.

An ATM machine is a machine that is primarily used to either deposit or withdraw money into or out of your bank account among many other transactions.

As shown in the figure above, there is the computer's bank that is connected to a host computer that is also connected to the actual ATM that we use.

At the ATM, the input in this case is your ATM card or your debit card. The information on that card such as your name, account number and so on, is the data that needs to be processed by the machine.

After entering the very important piece of information which is your pin code, you are able to choose the transaction you would like to proceed with. The ATM will process your request and give you your final result in return.

ATMs have become an essential addition to any business, especially banks for example. There