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Transaction Processing System

A Transaction Processing System (TPS) is an information system that manages business transactions by collecting, storing, modifying, and retrieving data to ensure efficient and accurate processing. TPS is crucial in various industries, exemplified by retail POS systems, ATMs, and airline reservation systems, and consists of key components such as inputs, processing, outputs, and databases. While TPS enhances data integrity and customer service, it also requires skilled maintenance and is susceptible to security risks and system overloads.

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11 views13 pages

Transaction Processing System

A Transaction Processing System (TPS) is an information system that manages business transactions by collecting, storing, modifying, and retrieving data to ensure efficient and accurate processing. TPS is crucial in various industries, exemplified by retail POS systems, ATMs, and airline reservation systems, and consists of key components such as inputs, processing, outputs, and databases. While TPS enhances data integrity and customer service, it also requires skilled maintenance and is susceptible to security risks and system overloads.

Uploaded by

helariaabraham97
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Transaction

processing
system
(TPS)
BY: By: Metarakuje Makari(2025058559),
Marius Shikwambi(2025060744), Gaseb
Tiaan(2025060663), Rinounogo
Kaangundue, Sikaki Malakia, Vikapita
Kavirembo(2025062780).

1
A Transaction Processing System (TPS) is an information
system that collects, stores, modifies, and retrieves all of a
Definition company's business transactions, aiming to provide
predictable response times.

Transaction processing systems are essential for businesses,


handling daily financial transactions.

TPS is integrated across various industries to ensure efficient,


accurate, and real-time processing of transactions to support
business operations.

2
Here are some real-world transaction processing
examples of TPS that one may encounter:

Retail

Point-of-Sale systems (POS): When you swipe your card


at any store to purchase an item or a service, that is a TPS in
action. The system captures your purchase information,
updates inventory levels, and finalizes the transaction using
your bank card.

Examples Banking

of a TPS ATMs: Withdrawing cash or checking your balance at an


ATM involves a TPS. It verifies your identity, retrieves your
account information, updates your balance, and finally
allows for cash withdrawal.

Airline system reservation

Airline reservation systems: Booking a flight online


involves a TPS. The system checks seat availability, verifies
your payment information, and generates your ticket and
confirmation email.
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Key components of a
TPS
A well-functioning transaction processing system
(TPS) relies on four main components working
together to handle business transactions
effectively:
Inputs
 This is the starting point of any transaction. It
refers to the data or instructions that enter the
TPS, typically initiated by a user or an external
system. Inputs can take various forms, including:
1. Customer orders
2. Payment information
3. Inventory updates

4
Key components
continued…
Processing
 Once the TPS receives the input, the processing unit
takes over. This component interprets the data,
validates its accuracy, and performs the necessary
actions based on the type of transaction.
Here are some typical processing tasks:

1. Calculating order totals and discounts


2. Verifying customer information and credit card
details
3. Updating inventory levels
4. Generating invoices and receipts
5
Outputs

Key components  After processing the input, the TPS


generates an output, which is the result of
continued… the transaction.

Outputs can be delivered in various


ways, such as:

1. Displaying a confirmation message on a


screen (e.g., order confirmation)
2. Printing receipts or invoices
3. Updating customer accounts or databases
4. Sending email notifications (e.g., proof of
purchase)

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Database

key components  This includes storing all the crucial data


related to business transactions. The
continued… database can include information on:

1.Customers (names, addresses, purchase


history, documents)
2. Products (descriptions, prices, stock levels)
3. Employees (payroll details, work schedules)
4. Financial transactions (sales records,
payments received)

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Functions of TPS

Updating data: TPS updates the


Recording transactions: TPS
company’s database with the
records all financial transactions,
latest transaction information,
including sales, purchases, and
ensuring that the data stays
payments.
current.

Maintaining data integrity: TPS


Generating reports: TPS can
adheres to data integrity rules to
produce reports summarizing
prevent errors and inconsistencies
transactions and providing
from entering the system, thus
valuable insights into the
ensuring the accuracy of the
company’s performance.
information within the database.

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Types of TPS
There are two main types of transaction
processing systems that differ based on how
they handle transactions:

Real-time processing
This type of system processes transactions as
they occur, providing immediate updates and
responses. This is what you experience when
you buy something online and receive instant
confirmation of your order.

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Types of TPS
continued…
Batch processing
Batch processing is mainly for transactions that
are grouped and processed periodically, in
batches. This is often used for tasks that are not
time-sensitive and can be accumulated over a
while, such as:

1. Payroll processing
2. Generating reports  CPU stands for "Central
Processing Unit” AKA the main
3. Sending out invoices brain of the computer .

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POSITIVE EFFECTS
 The use of TPS in businesses minimizes the occurrence

Effects of TPS of error during data transactions.


 A TPS allows for the user/customer to have a level of
reliability and confidence during transactions.
 The TPS keeps a stable database and reduces risk of loss
of user information in the occurrence of terminal or
network failure.
 The use of TPS in organizations is a key feature in
improving customer service and satisfaction.

NEGATIVE EFFECTS
 Maintenance of a TPS requires the use of skilled and
specialized personnel.
 Third party interference may occur in real time (such as
hackers and theft of identity ) due to its online nature.
 Requests may overload system which may lead to
crashing of websites and loss of information in real time.
 User may need a good internet connection to access its
service

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 Transaction Processing Systems (TPS)
have a significant influence on computer
TPS influence on usage by automating and streamlining the
computer usage processing of numerous, often repetitive,
transactions, leading to increased efficiency,
reduced errors, and improved data
management for businesses.

In conclusion
In summary, transaction processing systems
are the backbone of a company’s financial
operations, ensuring efficient transaction
processing, maintaining data accuracy, and
generating insightful reports.

12
THANK YOU
FOR YOUR
TIME.!

13

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