Batch Transaction Processing

1. Batch Transaction Processing Option 1: Transaction Processing Systems

2. Batch Transaction Processing • Batch Transaction processing separate data collection from the actual transaction processing operations. This means that transactions processing is delayed to a time when the system is quiet (at night) or until sufficient data exists eg. Generating bills in batches of 100. • In all cases the data required for many individual transactions of the same type is collected over time and then at a later stage all transactions are processed together. • Common examples of batch include clearance of cheques, bulk generation of bills and payroll processing. Batch is common where required data is collected on paper forms.

3. Batch Transaction Processing • Commonly the collected data for each individual transaction is added to a transaction file. When the time comes for batch processing to occur the transaction file is submitted for processing. • Historically batch processing was the first type of transaction processing eg. Punch cards as input into early computer systems.Today batch processes are generally performed in parallel with other processes. As a consequence ACID properties must be observed during most batch jobs – particularly the isolation property. For example the same credit card number may form part of batch transactions in locations across many countries – if these transactions overlap then without ACID (isolation) data integrity problems will result. • We will now look at clearing cheques, bill generation and credit card transactions.

4. Batch Transaction Processing Cheque clearance • Cheques are a paper based system that were the primary method of exchanging funds prior to EFTPOS and credit card. A cheque is a promise by a payer to pay the payee some amount of money. The payer can be an individual or an organisation and the payee is the receiver of a cheque. Cheque clearance refers to the process of securely transferring funds between accounts via bank networks. Problems with cheques include: insufficient funds, forgery, lost or stolen cheques. Cheques clearance processes have some safeguards for this.

5. Batch Transaction Processing Example of Cheque clearance: • Payee Marty receives a cheque in the mail from Chris. Marty deposits the cheque at his local ANZ. • ANZ teller uses MICR (Magnetic Ink Character Recognition) to determine details from cheque. (account # and Bank Service Branch) • Funds are credited to Marty as unavailable funds. • ANZ uses high speed MICR readers to read account details from a “batch” of cheques. Bank cheques are bundled according to BSB. • Bundles of cheques are transported to a central cheques cleaning house. • Cheques are transported to the central processing of each bank. • Cheques commence batch processing: • Value of cheque using MICR • Check of sufficient funds in payer account • Authenticity of cheque • Payment fulfilled

6. Batch Transaction Processing Cheque clearance • In the past cheques were sorted into individual branch bundles and physically transported to branches for final processing. Today account details and images of account holder signatures are available online there verification can now take place centrally via secure communication links. This removes the need to physically transport cheques back to their branch of origin – reducing clearance times from 5 days to 3.

7. Batch Transaction Processing Bill Generation • In many systems the generation of bills or invoices is well suited to batch processing. Bills are often generated during times when the system is not being used – commonly at night. Additionally, considering household bills, data is stored within an organisation’s database until the end of the month where batch processing is used to generate a monthly phone bill. Come to page 404 of the text for further detail on this.

8. Batch Transaction Processing Credit Card Transactions (Real time or batch?) • As a customer it would appear that a credit card payment takes place in real time. The customer presents their card, pays through an EFTPOS terminal and has the customer either sign a receipt or verify with a pin. On the web customers enter their credit card details into a secure web page and within seconds the transaction is approved. • In reality most credit card transactions are batch processed during the evening following the sale – whilst some take place almost in real time. It is important to note that a credit card transaction is not complete until the funds have moved into the merchants account. Come to page 406 of your text for a further explanation of this.