How does batch processing differ from real-time processing?

Batch processing is characterized by the grouping of multiple transactions or data items together for processing as a single unit. This approach is particularly effective for handling large volumes of data since it allows for efficiency and improved resource management. By collecting transactions throughout a specified time period, such as daily or weekly, and then processing them all at once, organizations can streamline operations, reduce processing costs, and make better use of system resources.

While it is not required to process batched items at the end of the day, it is common for batch processing to occur at scheduled intervals, which may or may not align with a particular time of day. This leads to the flexibility of processing during non-peak hours, ensuring minimal disruption to ongoing activities.

In contrast, real-time processing involves immediate processing of transactions as they occur, which demands continuous system availability and immediate user interaction. This distinction is significant as it affects the performance, responsiveness, and resource requirements of the system being utilized. Understanding this difference is crucial for professionals in managing payment systems and optimizing the operational efficiency of financial services.