A transaction is a money transfer from a payer to a payee. Person A gives person B an agreed amount of money for a product/service. The transaction, though, can also take place between private individuals. For example, you are sending money to a relative/friend. 

Examples of transactions in daily life:

  • You pay for lunch at a Chinese restaurant. Once you swipe a credit card at POS, the transaction happens.
  • You send money to your French tutor for her service via your mobile banking app.
  • You pay an electricity bill via your mobile banking app.
  • You purchase clothing online and enter your credit card details to accomplish the payment. 
  • An external transaction is an exchange between the company and another entity. 

Transaction fees for merchants

Merchants who sell their products/services online face the transaction fees. Per-transaction fees vary. For example, PayPal merchants pay 2.9% per transaction + a fixed fee based on currency, while PaySpacelv merchants pay 1.2% per transaction. That is to say; whenever someone buys a product/service from a merchant’s website, he is obligated to pay a fee.

Transaction fees for individuals

Individuals also face transaction fees. Usually, they appear when you send money overseas. Fees are also being implied when transferring money to a person who holds a credit card from a different bank than yours.