What is An Electronic Transaction?

Read the whitepaper titled, “Enhancing the End-to-End Customer Experience with Real-time Data.”

What is an electronic transaction? 

Answer: A simple action by a customer that quickly becomes very complex to execute.

The term “transaction” is used by most people to describe everything from a stock trade to the transfer of money or goods involving people, businesses, accounts, or applications such as ATMs and POS terminals. These transactions are bound by well defined business processes or contractual starting point and ending points, such as terms of time and activity.

But when the word transaction is used by IT operations, fraud and channel managers, it takes on a more complex meaning. In application performance monitoring (APM) terms, drilling deeper into what appears to be a seamless transaction on the surface usually reveals a number of messages and distinct operations being correlated and performed beneath it. The number of related interactions making up the transaction is dependent on the number of applications and services actually “touched” along the transaction’s end-to-end path.

A diagram displaying how a transaction moves from channels and devices, through the network, to applications and back.

Let’s consider a simple transaction example, such as paying for your coffee at a corner café with a credit card. The result of your placed order is a transfer of money to the merchant and a transfer of hot coffee into your mug. Although this sounds pretty simple, diving deeper into this purchase process would actually reveal a sequence of sub-transactions, moving from the POS application, to the acquiring bank’s processing switch, to the back-end credit authorization connections, and all the way back to the POS application to deliver final approval. Add in support for a third party loyalty program and fraud detection analysis system, and you have even more data exchanges and application complexities to consider in order for this single transaction to successfully complete.

The result is that an electronic transaction can fail for any number of reasons. You will not get your caffeine jolt and the merchant loses business due to your card being refused, or the EFT network being down, or a processing switch failing due to being over capacity. Each one of these sub-transactions represents an important link in the end-to-end chain. Understanding where, when, and why failures occur in this chain is critically important if your job is maintaining the integrity and performance of a transactional system.

Banks, retailers, IADs and payment processors using INETCO Insight real-time fraud alerts to improve customer experience

Using transaction monitoring tools that capture and correlate both application and network information for each sub-transaction, you can re-assemble all these bits and bytes into business transactions, and make sense of the end-to-end delivery chain. Ideally this is done without deploying application agents or subjecting application components (like your payments switch) to extra load.

So is drilling into this level of transaction detail really necessary? It is if your goal is to optimize the consumer experience and maintain consistent performance across all critical, revenue generating applications.

Read INETCO whitepapers to learn more about how banks, payment processors and retailers are able to increase transaction completion rates, lower the cost-to-serve and drive more business value from customer transaction data: