In the context of banking and payments, a nested transaction refers to a transaction that involves multiple transfers of funds between different accounts or entities. Nested transactions can be complex and involve multiple steps, with each step being a separate transaction that is dependent on the outcome of the previous step.
Here is an example of a nested transaction in the context of a bank transfer:
- Customer A initiates a transfer of funds from their account at Bank A to their account at Bank B.
- Bank A receives the transfer request and verifies that Customer A has sufficient funds in their account to complete the transfer.
- If Customer A has sufficient funds, Bank A debits the funds from Customer A’s account and initiates a transfer to Bank B.
- Bank B receives the transfer and credits the funds to Customer A’s account at their bank.
In this example, the transfer of funds from Bank A to Bank B is a nested transaction, as it involves multiple steps and is dependent on the outcome of the previous step (verifying that Customer A has sufficient funds).
Nested transactions can also involve multiple parties and involve the transfer of goods or services in addition to funds. For example, a nested transaction could involve a customer purchasing goods from a merchant, with the payment being made through a third-party payment processor. In this case, the transaction would involve multiple steps, including verifying the customer’s payment information, processing the payment, and transferring the funds to the merchant’s account.
This page was last updated on January 3, 2023.