Transaction

A transaction is a business deal in which goods, services, or money are transferred from one person or account to another.

This could mean a simple transfer of money in exchange for goods and services.

For example, buying a book from a bookstore, ordering a meal at a restaurant, or buying groceries at the supermarket are all examples of transactions that you do every day. People, companies, and even nations perform transactions, where something is given (usually money) and something is received in return.

It could also mean the transfer of money from one account to another. Transferring a sum of money from your regular account to your savings account is also a form of transaction.

Types of transactions

ATM and Debit card transactions - When you withdraw cash from a bank's ATM, the withdrawal is recorded in your account as a debit transaction.

Bank transactions - These transactions can include payments, withdrawals, or other types of transfers from and to different bank accounts.

Cash transactions - when physical money is being exchanged, then this is a cash transaction. This is the most traditional form of transaction.

Credit transactions - when the payment is delayed, then you probably have a credit transaction. In such a scenario, you receive the goods or services now, in the present, and you agree to pay on a later date. When you make a transaction with a credit card, this is a credit transaction.

Mobile transactions - The most popular form of digital transactions is mobile - with people paying with their phones in physical stores or online, using e-wallet apps such as Apple Pay or Google Pay. Mobile apps such as Wise, Venmo, or Cash App are also used to make transactions between people easily.

Online transactions - in online transactions the payment or the transfer of money is digital and happens electronically. Online banking or online shopping is the most typical example of an online transaction.

Cryptocurrency transactions - cryptocurrency transactions can be separated into three stages - creating, broadcasting, and confirmation. To initiate a transaction, you must create and sign a transaction with a crypto wallet. The wallet then broadcasts the transaction details to the blockchain network. After it is validated by the network of computers on the blockchain it is confirmed by the miners as a permanent piece of the blockchain. The main difference between all other forms of transactions is the decentralized form of organization of the transaction - there isn't a bank to conduct the transfer - it all happens on the blockchain with the support of the other participants/miners.

Microtransactions

You may find the term in and around video games, virtual reality, or mobile apps. This is a business model, where the user can purchase a virtual currency with real money and trade it for virtual goods and services.