A transaction is made up of data and processes that update (make a single change) to the data held on the system. Each transaction must be completed before the next transaction is begun.
Examples of a single transaction include booking an airline ticket, transferring money between bank accounts, ordering. Usually there are multiple users of a transaction processing system.
Data to be input to a batch processing system is collected together (over a set period of time or until a certain batch size is reached) and then processed as a single operation. Batch processing systems don't require any human interaction whilst a batch is being processed.
Examples of batch processing include payroll systems where many staff are paid at the same time, utility billing where many bills are produced in a single operation.
Interactive processing provides for a dialogue between the user and the system.
There are 'immediate' responses from the system.
Transaction processing and interactive processing are often combined in one single system.
Examples of interactive/transaction processing include Internet banking, online booking of train tickets.