when a buyer and seller enter into a business deal they may decide to use the services of an intermediary or third party that manages the transaction between both parties the role of the third party can vary it may include designing the particulars of the deal in question providing a specific service for a company that is slightly outside its wheelhouse serving as the middleman that connects two parties or serving as the means of receiving payment from the buyer and forwarding that payment to the seller 
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 example of a third party transactionmany kinds of transactions involve third parties and they take place on a day to day basis across a variety of industries for example in the insurance industry insurance brokers are third party agents that market insurance products to insurance shoppers the client goes through the broker to secure a good insurance contract that has reasonable rates and terms while the insurance company works through the broker to bring in a new client if the broker is successful in bringing a new client to an insurance provider it is paid a commission by the insurer in the same light a mortgage broker is considered a facilitator in third party transactions as they will attempt to match the needs of a potential homebuyer with the loan programs offered by a lender through digital platforms a buyer can make a payment for the purchase of a good or service bought from a third party special considerationsas technology evolves and changes the way interactions are handled in the digital era more people and businesses are participating in third party transactions through online payment platforms through digital platforms a buyer can make a payment for the purchase of a good or service bought from another party that third party provider receives the payment from the buyer verifies that the funds are available and debits the buyer s account the money is then forwarded to the seller s account typically on the same online portal the seller s account may be credited in minutes or days but the funds may be withdrawn to a bank account or used to conduct other transactions once the deposit has been made in the account paypal is one good example of an online payment portal that 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 paypal and is thus a third party transaction 