A domestic transaction involves which of the following?

A domestic transaction is characterized by the involvement of both the issuer and the acquirer being located within the same country. This means that the entire transaction process, from the consumer's bank (issuer) to the merchant's bank (acquirer), occurs within the same country’s financial infrastructure. This allows for adherence to local laws, regulations, and currency, simplifying the transaction process significantly.

In contrast, transactions involving different currencies, cross-border sales, or those processed on international platforms involve two or more countries, which categorizes them as international or cross-border in nature. Thus, answer B correctly defines the parameters of a domestic transaction. It's crucial for those in the payments industry to understand these distinctions as they affect compliance, currency exchange, fees, and regulatory issues.