Definition:
Transaction monitoring is the process of continuously analyzing payment transactions to detect and report suspicious activity.

Contextual Explanation:
Regulators require financial institutions and payment processors to implement transaction monitoring systems to identify potential money laundering or fraud. Paycompliance provides insights into best practices for compliance.

Why It Matters:
Effective transaction monitoring helps prevent financial crimes, ensures regulatory compliance, and protects businesses from legal repercussions.

Example:
A bank flags a series of high-value transactions from multiple accounts as potentially fraudulent and reports them to the regulator.