Third-Party Transaction

AAA

DEFINITION of 'Third-Party Transaction'

A third-party transaction is a business deal involving a buyer, a seller and a third party. The third party's involvement varies with the type of business transaction. For example, an online payment portal, such as PayPal, acts as a third party in a retail transaction. A seller offers a good or service, and a buyer uses a credit card entered through the PayPal payment service. The payment is run through a third party, and is therefore a third-party transaction.

INVESTOPEDIA EXPLAINS 'Third-Party Transaction'

Third-party transactions are important for various accounting policies and occur in a variety of situations. Importantly, the third party is not affiliated with the other two participants in the transaction. For example , if Firm A sells inventory to its subsidiary, Firm B, a third-party transaction occurs when Firm B sells those final goods to Firm C.


RELATED TERMS
  1. Third Party

    An individual or entity that is involved in a transaction but ...
  2. Qualifying Transaction

    A type of transaction that occurs when a company issues public ...
  3. Joint Venture - JV

    A business arrangement in which two or more parties agree to ...
  4. Underwriting

    1. The process by which investment bankers raise investment capital ...
  5. Partnership

    A business organization in which two or more individuals manage ...
  6. Business

    1. An organization or enterprising entity engaged in commercial, ...
Related Articles
  1. Profit From Mortgage Debt With MBS
    Bonds & Fixed Income

    Profit From Mortgage Debt With MBS

  2. The Lucrative World Of Third-Party Marketing
    Professionals

    The Lucrative World Of Third-Party Marketing

  3. The Risks Of Mortgage-Backed Securities
    Bonds & Fixed Income

    The Risks Of Mortgage-Backed Securities

  4. Payback Period
    Investing

    Payback Period

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center