Businesses in the digital landscape are prone to fraudsters in order to transfer illegal money while dodging the legal system. However, according to a recent report, the transaction monitoring market has grown to $16.8 by 2023 with the integration of transaction monitoring and KYC compliance. Read the article to understand the concept of transaction processing and its classification, along with the perks it offers to businesses.
Prominent Aspects
- What is transaction screening and its workflow?
- What are the two types of TPS?
- Explore the benefits of transaction processing system
What is Transaction Screening? A Quick Recap
The term TPS stands for Transaction Processing System. Primarily, a TPS collects, stores, adjusts, and fetches data transactions in a company. It generally possesses particular elements, such as inputs, storage, processing, and output. It is also referred to as a business tool that contains automated hardware and software hosting the application to execute the firm’s transactions. The payment screening process comprises three essential elements: entities, software, and hardware.
How Does Transaction Processing System Work?
The procedure works by enrolling the consumer details and implementing processing techniques that analyze, evaluate, and convert input to something meaningful. The result ensures that every transaction executed is stored, analyzed, and sent successfully. The primary operation of a standard TPS includes:
- Data collected
- Stored,
- Analyzed
- Sent
Classifications of Transaction Processing System
Transaction processing ensures the completion of payments while keeping track of those money dealings. Its major components include taking the invoices, bills, and expenses while in the processing, including the analysis that ensures easy accessibility and integration into the existing systems. Moreover, there are two primary types of TPS addressed below in detail:
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Batch Processing
With batch processing, the transaction processing interprets sets, or batches, of data by systematizing items based on resemblance. Batch processing can delay time because it examines numerous data sets simultaneously, which requires time and more manual work. The results are provided instantly. However, it is a time-consuming process
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Real-time Processing
Real-time processing refers to a method of processing the transactions as they appear. This assists businesses in preventing delays in transaction screening and offers a more accurate result. Real-time processing is executed with the incorporation of automated tools and software, making it an efficient and cost-effective approach
Gains of Transaction Monitoring Process
Transaction monitoring is crucial in businesses. However, digital screening has made the process seamless while streamlining payment methods. Let’s discuss some of the benefits transaction screening offers to the companies.
Enhance Transaction Speeds
Transaction process systems are automated, assisting businesses in effectively increasing the speed of every money dealing to minimize customer waiting times. TPS systems execute the transactions in real time, while other methods collect transaction details during a set period and then implement processing methods later, usually after business hours.
Automated Handling
The digital process of payment screening automates a lot of the company’s internal resources and revenue management. With the increase in cybernetics, entities can spend little time examining the high risk transactions. Automated management serves as an integral part of expanding a company’s profitability. Also, it gives businesses more time to focus on engaging tasks requiring critical thinking.
Improve Business Performance
The transaction processing cycle is a fast-performing tool with an instant response time. Its rapid working is critical, and the payment processing systems are usually estimated by the number of transactions they can process in a given period of time. However, the efficiency of TPS has helped the companies to expand while providing security and business growth
Cost Efficient
It is a cost-effective approach that can potentially carry out and organize thousands of everyday transactions. Automated TPS can save a business’s expenditures by reducing the need to upgrade or use multiple systems to meet requirements.
Enhances Business Credibility
Incorporating TPS can ensure that the process of customer transactions is instant and accurate. A reliable transaction method can also help the organization save money while improving the company’s reliability. It is a potential problem-solving and multi-functioning system that helps increase conversion rates and customer satisfaction.
Real-time Backup
The fast and automated processing of payment methods includes real-time backup that is useful in the future in case any mishap occurs. Proper backups prevent the loss of data and assist the business in storing the data safely in the back offices and databases.
Final Statement
Taking into consideration all the concepts of transaction processing, it is concluded that automated payment methods are faster, more efficient, and more accurate than batch processing and manual methods. Payment screening and data storage provide businesses with real-time results while implementing the KYC check methods and AML regulations. The robust TPS also adheres to the regulatory requirements, making it a successful approach that companies need to incorporate in their structures.