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.
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This page was last updated on January 3, 2023.
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